Packaged beer the new normal for big brewers

The nation’s biggest brewers are shifting production away from kegs towards packaged beer as pubs and clubs close.

Coopers Brewery CEO Tim Cooper Picture: Kelly Barnes

The nation’s biggest brewers are shifting production away from kegs as the pubs and hotels trade collapses in the wake of shutdowns triggered by the corona­virus pandemic to pour all their beer into bottles and cans, hoping a spike in demand at liquor stores will cushion the blow of empty pubs.

Coopers Brewery, based in South Australia and with a 5 per cent national market share, is reporting a 30 per cent jump in packaged beer sales for March. At a time of the year when it is usually scaling back production, it has bolstered volumes to meet the spike in demand at liquor stores.

However, many in the $18bn brewing industry are fearful that at a time when they are pinched by regular increases in the excise tax on beer, and beer consumption is at its lowest levels since World War II, that the extended closure of pubs, hotels and clubs will eliminate a crucial segment of their sales.

Tim Cooper, the boss of the nation’s largest independent and Australian-owned brewer Coopers Brewery, told The Australian that keg production made up about 15 per cent of volumes.

But he had witnessed a lift in the sales of packaged beers, with social media full of images of some shoppers stripping liquor stores of beer in the past fortnight.

“We aren’t making any kegs. So far we have had to ramp up production for packaged beer as during March there has been more purchasing of packaged products — bottles and cans — than we budgeted for,” Dr Cooper said.

“Clearly there is a bit of buying up by people perhaps worrying restrictions could be brought in on off-licenced trade and I think that may continue in April, but then we ponder how long that will continue for because of course you have the economic impact of many people losing their jobs as well, which is very unfortunate.’’

Dr Cooper said the strong uplift in sales at bottle shops and ­liquor stores resulted in Coopers posting a 30 per cent increase in sales for March over what was ­anticipated.

Peter Filipovic, CEO of Australia’s biggest brewer, Carlton & United Breweries, said in the past few weeks it had lost all its keg sales to pubs, clubs and hospitality venues but there had been an increase in packaged beer volumes.

“We have lost all our draught beer sales. Our sales to retail outlets have naturally increased, but over a short to medium term it is not going to be enough to offset the loss of our sales to pubs,’’ Mr Filipovic said.

About 20 per cent of volumes from CUB went into pubs, clubs, and hospitality venues. When the nation’s biggest pubs and hotels chain, ALH, closed, it resulted in 8000 staff being stood down, while licenced venues across Australia remain empty.

Mr Filipovic said the issue had caused a huge shift in its brewery configuration as it stopped producing kegs and funnelled its beer into packaged products.

Lion managing director James Brindley said the No 2 brewer was working through more than 10,000 requests to credit pubs for more than 60,000 unused kegs in beer cellars across Australia as part of a returns policy.

“We acknowledge this is an extremely distressing time for everyone involved in the hospitality industry,’’ Mr Brindley said.

“At Lion, we are doing everything we can to work quickly and provide our valued on-premise customers with the support they need right now.”