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Fosters Australian for killing craft beer

CHOICE says Foster’s is locking out your favourite craft brew

11 February 2015

An investigation by consumer advocacy group CHOICE has found foreign owned brewing giant SAB Miller which owns Foster’s Group (Carlton & United Breweries [CUB]) is locking out genuine Aussie craft beers from the taps at your favourite local pub.


“While it might seem like you have a huge choice when buying tap beer in your local pub the fact is most taps are controlled by one of two international brewing giants, SAB Miller or Kirin, at the expense of genuine Australian craft brewers,” says CHOICE Head of Media Tom Godfrey.

“It's not uncommon for the big brewers to offer more money, rebates or other incentives for exclusive access to 80% or even 100% of pub taps, making it hard for independent brewers to get a fair go,”[1] says Mr Godfrey.

“We know 83% of revenue in Australia flows to the big beer barons, Kirin and SABMiller.[2] If exclusive dealing cuts competitors, forecloses markets and keeps competitors out, it may well be unlawful.”[3] 

A contract for the supply of tap beer, obtained by CHOICE, demands exclusive access for the SABMiller-owned Foster's Group with terms[4] like:
  • Foster's will be the exclusive supplier of all Light Strength (<3%ABV) Draught Beer;
  • Foster's will be the exclusive supplier of all Low Carbohydrate Draught Beers;
  • Foster's will be the exclusive supplier of all Domestic Premium and Sub-Premium Draught Beers;
  • Foster's will be the exclusive supplier of all Imported Draught Beers;
  • Foster's will be the exclusive supplier of all Specialty & Craft Draught Beers;
  • Foster's will be the exclusive supplier of all Draught Spirits & Cider.
The tactics of the big brewers have caught the eye of the ACCC who are investigating the wholesale supply of beer to Australia's pub industry, to determine whether anti-competitive behaviour is locking out rival beer brands.

“This isn’t the only tactic the big brewers are using to muscle in on the growing craft beer market. For some time Kirin and SABMiller have been buying up craft beer brands and now currently control 47% of the craft beer market[5],” says Mr Godfrey.

“These big global beer barons know there’s a price premium on claiming to be craft brews and it’s now clear their ‘craft washing’ strategy extends to exclusive dealing which sees genuine Australian craft beers locked out of the market.”

“It might also come as a surprise to many consumers that their favourite ‘craft’ brews are now foreign-owned including Little Creatures (Kirin), James Squire (Kirin), Fat Yak (SABMiller) and Matilda Bay (SABMiller).”

“Even Coles and Woolworths are hopping on the ‘craft’ bandwagon with Steamrail Ale (Coles) and Sail and Anchor (Woolworths) getting in on the action.”

“It’s up to the consumer to decide what is important to them when it comes to drinking beer. If it’s a premium taste from a large brewery, that’s okay. If you want to support an Australian-owned microbrewery, find out who owns the brand you’re drinking and ask your local publican to put it on tap.”

[1]Choice.com.au/craftybeer

[2] IBISWorld "Beer Manufacturing in Australia: Market Research Report", http://www.ibisworld.com.au/industry/default.aspx?indid=116 (paywalled)

[3] Competition and Consumer Act 2010, Section 46: Misuse of Marketing Power

[4] Ibid. choice.com.au

[5] IBISWorld "Craft Beer Production in Australia: Market Research Report"http://www.ibisworld.com.au/industry/craft-beer-production.html (paywalled)


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