C1212 Beer Manufacturing in Australia Industry Report

INDUSTRY REPORT C1212
Beer Manufacturing in Australia
Opening the tab: Easing COVID-19 restrictions for bars and pubs have aided revenue
growth
Suzy Oo | February 2022
IBISWorld.com 03 9655 3881 info@IBISWorld.com

Beer Manufacturing in Australia February 2022
Contents
Recent Developments......................................................... 3 COMPETITIVE LANDSCAPE.......................... 24
ABOUT THIS INDUSTRY.................................. 5 Market Share Concentration............................................. 24
Key Success Factors........................................................24
Industry Definition................................................................5 Cost Structure Benchmarks............................................. 25
Major Players...................................................................... 5 Basis of Competition......................................................... 26
Main Activities..................................................................... 5 Barriers to Entry............................................................... 27
Supply Chain....................................................................... 6 Industry Globalization........................................................ 29
INDUSTRY AT A GLANCE................................ 7 MAJOR COMPANIES...................................... 30

Executive Summary............................................................ 9 Major Players.................................................................... 30
Other Companies.............................................................. 32
INDUSTRY PERFORMANCE..........................10
OPERATING CONDITIONS............................ 34
Key External Drivers.........................................................10
Current Performance........................................................ 11 Capital Intensity................................................................. 34
Technology & Systems......................................................35
INDUSTRY OUTLOOK.................................... 14 Revenue Volatility..............................................................36
Regulation & Policy........................................................... 36
Outlook.............................................................................. 14 Industry Assistance........................................................... 37
Industry Life Cycle............................................................. 16
KEY STATISTICS............................................ 39
PRODUCTS & MARKETS............................... 17
Industry Data..................................................................... 39
Supply Chain..................................................................... 17 Annual Change..................................................................39
Products & Services.......................................................... 17 Key Ratios......................................................................... 39
Demand Determinants...................................................... 18
Major Markets....................................................................19 ADDITIONAL RESOURCES............................40
International Trade............................................................ 20
Business Locations........................................................... 22 Additional Resources........................................................ 40
Industry Jargon..................................................................40
Glossary............................................................................ 40
CALL PREPARATION QUESTIONS............... 42

Role Specific Questions.................................................... 42
External Impacts Questions.............................................. 43
Internal Issues Questions.................................................. 43
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Recent Russia-Ukraine conflict to benefit local grain growers

Developments
Russia and Ukraine are both significant global producers of wheat and other grains, such as barley, maize and oats.
As a result of the conflict, the gap in global supply has sharply increased demand for Australian- and New Zealand-
grown wheat and coarse grains. Domestic grain growers have benefited from the price increases, as export revenue
from the crop has risen sharply. The UN-brokered grain export deal between Russia and Ukraine has slightly
alleviated this supply gap. However, the region’s instability makes the deal’s long-term success uncertain.
Low unemployment increases labour costs and shortages for employers

The unemployment rate increased slightly to 3.5% in August 2022, but remains close to the lowest official rate since
1974. This low unemployment rate has supported real household disposable incomes and consumer sentiment
during a period of economic uncertainty. In contrast to businesses, the fall indicates a tightened labour market for
employers due to strong pressure to attract and retain employees, while labour has been scarce.
Rising food and beverage prices are squeezing profit margins

According to the ABS, food and non-alcoholic beverages’ price inflation reached 5.9% over the year through June
2022. This rise stems from strong price increases across several product segments, including fruit and vegetables
and non-alcoholic beverages. Prolonged labour shortages, soaring fuel costs, disrupted logistics due to the
COVID-19 pandemic and the Russia-Ukraine conflict, and extreme flooding on Australia’s east coast can underpin
price rises in ingredients and finished goods. Consequently, manufacturers are passing higher costs on to
consumers. This trend is likely to place downward pressure on industry demand for manufacturers.
This section last udpated November 01, 2022
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About This Industry

Industry Definition Industry operators manufacture beer, ale, stout or porter. Industry producers generally package beer in kegs, bottles
or cans, and sell it to bars, wholesalers and retailers. The industry does not include production of non-alcoholic beer.
Major Players Asahi Holdings
Lion
Main Activities The primary activities of this industry are:
Beer manufacturing, excluding non-alcoholic beer
The major products and services in this industry are:
Full-strength traditional beer
Mid-strength beer
Light beer
Premium beer
Low-carbohydrate beer
Craft beer
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Supply Chain
SIMILAR INDUSTRIES
Wine Production in Australia Spirit Manufacturing in Australia Soft Drink Manufacturing in Fruit Juice Drink Manufacturing in
Australia Australia
RELATED INTERNATIONAL INDUSTRIES
Global Beer Manufacturing Breweries in the US Craft Beer Production Beer Production in the UK
Beer Manufacturing in New Beer Production in China Breweries in Canada Beer Production in Ireland
Zealand
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Industry at a Glance
Key Statistics Key External Drivers % = 2017–22 Annual Growth
$4.9bn 4.5% -0.2%

Revenue Real household discretionary Per capita alcohol consumption
income
Annual Growth Annual Growth Annual Growth
7.0% 2.9%
2017–2022 2022–2027 2017–2027 Domestic price of coarse grains Demand from liquor retailing
0.4% 2.1% -1.9%
Demand from pubs, bars and
nightclubs
$878.2m
Profit
Industry Structure
Annual Growth Annual Growth
2017–2022 2017–2022 POSITIVE IMPACT

-0.3% Barriers to Entry Competition
High / Decreasing Low / Increasing
MIXED IMPACT
Life Cycle Revenue Volatility
17.9% Mature Medium
Profit Margin
Capital Intensity Technology Change
Annual Growth Annual Growth Medium Medium
2017–2022 2017–2022
NEGATIVE IMPACT
-0.6pp Industry Assistance Concentration
Low / Increasing High
Regulation & Policy Industry Globalization
Heavy / Increasing High / Increasing
737
Businesses
2017–2022 2022–2027 2017–2027

Key Trends
10.8% 8.2%  Per capita beer consumption has declined over the past five
years
 Drinkers have become increasingly discerning and more

willing to try different brands and styles
6,010
Employment  The craft beer segment has grown strongly over the past five
years, encouraging new entrants
 Supermarkets are forecast to continue pushing into the
2017–2022 2022–2027 2017–2027
private-label beer market
2.2% 2.1%
 Consumer demand for quality and variety is projected to
drive growth in the craft beer segment
 Internal competition is anticipated to increase over the next

$572.7m five years
Wages
 Rising demand from hospitality firms and sales through
Annual Growth Annual Growth Annual Growth brewpubs are supporting industry revenue
2017–2022 2022–2027 2017–2027
-1.4% 2.6%
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Products & Services Segmentation
Major Players SWOT
STRENGTHS
High & Decreasing Barriers to Entry

Low & Increasing Level of Assistance
Low Competition
Medium Imports
High Profit vs. Sector Average
Low Product/Service Concentration
High Revenue per Employee
WEAKNESSES
High Customer Class Concentration

High Capital Requirements
OPPORTUNITIES
High Revenue Growth (2022-2027)

High Performance Drivers
Demand from pubs, bars and nightclubs
THREATS
Low Revenue Growth (2017-2022)

Per capita alcohol consumption
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Executive Summary Opening the tab: Easing COVID-19 restrictions for bars and pubs have
aided revenue growth
Falling per capita alcohol consumption, increasing competition and changing consumer preferences have shaped
the Beer Manufacturing industry's performance over the past five years. The COVID-19 pandemic and related
lockdown measures have also disrupted demand from export markets and hospitality firms, alongside restrictions on
brewers' ability to sell through their own brewpubs. Over the past five years, consumers have increasingly moved
from traditional beers, such as Victoria Bitter, to premium and craft beers. This, combined with rising demand from
downstream liquor retailers, has benefited beer manufacturers. Industry revenue is expected to rise slightly at an
annualised 0.4% over the five years through 2021-22, to $4.9 billion. This includes an anticipated decline by 4.4% in
the current year, due to a sharp fall in demand from liquor retailers. Easing restrictions on licensed establishments
will likely disrupt at-home alcohol consumption trends over 2021-22, hindering production orders from retailers.
Meanwhile, stronger demand from liquor wholesalers and licensed venues will likely limit revenue declines in the
current year.
The industry is highly concentrated. Asahi has significantly expanded its market share through its purchase of
Carlton and United Breweries (CUB) from AB InBev in June 2020. The major players, Asahi and Lion, account for
over 70% of industry revenue in 2021-22. However, the continual entry of craft breweries has constrained growth in
market share concentration over the past five years. Major liquor retailers, Woolworths and Coles, have also
increased their private-label beer offerings over the period, intensifying price competition and putting downward
pressure on industry profitability. Meanwhile, increased demand for higher margin, specialised beers has partially
offset this trend, supporting industry profit margins over the past five years.
The ongoing premiumisation of the beverage market is forecast to boost demand for craft and fruit-infused beer over
the next five years. Growing demand from liquor retailers and rising real household discretionary income are also
projected to boost industry revenue. However, health consciousness is anticipated to continue increasing over the
next five years, contributing to an ongoing decline in per capita alcohol consumption. Industry revenue is projected
to grow at an annualised 2.1% over the five years through 2026-27, to $5.4 billion.
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Industry Performance
Key External Demand from liquor retailing

Drivers
The Liquor Retailing industry is an important downstream market for beer manufacturers, accounting for the largest
proportion of beer sold at the consumer level in Australia. Liquor retailers sell beer for off-premises consumption.
Major supermarket chains have increasingly stocked their own private-label beer over the past five years,
constraining demand for traditional beer manufacturers' products. However, large-scale manufacturers that have
been contracted to produce private-label beer for these supermarkets have benefited from this trend. Demand from
liquor retailing is expected to fall sharply in 2021-22, as consumers shift towards licensed establishments in line with
the easing of COVID-19 lockdown restrictions.
Demand from pubs, bars and nightclubs
Pubs, bars and nightclubs are key buyers of industry products, and sell beer for consumption on-premises.
Increased demand from these businesses generally boosts revenue for the Beer Manufacturing industry. Demand
from pubs, bars and nightclubs is expected to rise sharply in 2021-22, supported by the ongoing easing of
COVID-19 restrictions. This represents an opportunity for the industry to expand.
Per capita alcohol consumption
Trends in per capita alcohol consumption can influence demand for beer. Higher alcohol consumption typically
boosts industry demand, depending on the popularity of other alcoholic beverages such as wine and spirits. Several
factors have contributed to declining per capita alcohol consumption in Australia over the past five years, including
rising health consciousness, tightening of government regulation and campaigns targeting drink driving. Per capita
alcohol consumption is expected to fall slightly in 2021-22, as a rise in health consciousness discourages alcohol
consumption among many consumers. This trend is anticipated to weigh on demand for beer in the current year,
posing a threat to industry revenue.
Real household discretionary income
Trends in household discretionary incomes can influence demand for beer. When income growth is strong,
households tend to increase spending on discretionary items such as alcohol, which usually boosts demand for
industry products. Real household discretionary income is expected to rise in 2021-22, boosting consumer spending
power on industry products.
Domestic price of coarse grains
Purchasing production inputs, such as malt and barley, is a significant cost for beer producers. Rising grain prices
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increase industry purchase costs, which brewers partly offset by passing on cost increases to consumers through
higher prices. However, many operators cannot fully pass on increases in grain costs due to price competition
among operators. As a result, increases in the domestic price of grains tend to negatively affect the industry. The
price of coarse grains is expected to decline in 2021-22, allowing industry operators to expand profit margins.
Current Operating conditions in the Beer Manufacturing industry have changed

Performance over the past five years, due to a growing trend towards premiumisation
and increasing consumer preference for heathier and more varied product
offerings.
The industry's performance relies on household discretionary incomes, per capita alcohol consumption and demand
from liquor retailers, wholesalers, pubs and other establishments. Declines in per capita consumption and a shift in
consumer drinking habits towards other alcoholic beverages such as wine have reduced demand for some
segments over the past five years. Additionally, increasing internal and external competition has constrained
demand for traditional beer brands over the period, squeezing profit margins.
Industry revenue is expected to rise slightly at an annualised 0.4% over the five years through 2021-22, to $4.9
billion. This includes an expected decline of 4.4% in the current year, due to falling demand from downstream
retailers. Easing COVID-19 restrictions on licensed establishments will likely accelerate the shift away from off-
premises consumption. As a result, a rise in demand from pubs, bars and nightclubs is anticipated to limit falls in
revenue in the current year.
COVID-19
The COVID-19 lockdown restrictions have diminished demand from pubs,

bars and nightclubs, including the inability of craft breweries to sell their
products through their own brewpubs.
Meanwhile, demand from liquor retailing has risen over the two years through 2020-21, supported by increased at
home consumption of alcoholic beverages and growing online presence of Woolworths and Coles. In March 2020,
Coles offered to purchase the remaining stock of craft beer from some of the domestic brewers that was initially
intended for restaurants, bars and clubs. Nevertheless, demand from liquor retailers is anticipated to fall sharply in
the current year, as consumers shift towards licensed establishments in line with easing COVID-19 restrictions.
Meanwhile, supply chain constraints have hindered the performance of industry exporters, with export revenue
falling by 16.2% and 33.8% in 2019-20 and 2021-22 respectively. The COVID-19 outbreak and the associated
trading restrictions have negatively affected hospitality firms around the world, weakening global demand for locally
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produced beers. These factors have also caused imports to decline by 15.8% over 2020-21. Meanwhile, rising
demand from pubs, bars and nightclubs, combined with ongoing consumer interest in premium international brands,
will likely increase the total value of imports over 2021-22.
CONSUMER PREFERENCES
Greater health awareness, increasing regulation and taxation, public

education campaigns, and rising competition from non-alcoholic
beverages have reduced per capita alcohol consumption over the past
five years.
Beer consumption, in particular, has fallen due to consumer preferences increasingly favouring perceived higher
quality alcohol. Consumer tastes have shifted from traditional full-strength beers such as Victoria Bitter and XXXX,
towards craft beer and premium foreign-label beers.
As drinkers have become increasingly discerning and more willing to try different brands and styles, the premium
beer segment has grown strongly over the past five years. The largely homogenous nature of traditional beers has
also encouraged consumers to shift towards higher value craft beers. Smaller brewers have emerged to fill niches in
the market, increasing enterprise numbers and employment in the craft beer segment over the period. Craft and
boutique brewers generally focus on European and American styles that were previously underrepresented in the
Australian market, such as pilsner, pale ale, porter, amber ale, dark ale and wheat beer. Exports have increased as
a proportion of industry revenue over the past five years, due to growing demand for Australian craft beers in Asian
markets. However, the COVID-19-related supply chain disruptions and weaker global demand have limited the
positive effects of this trend, with export revenue declining over the three years through 2021-22.
Industry imports have decreased in nominal terms over the past five years, as the depreciation of the Australian
dollar has made imported beers more expensive in the domestic market. Imports have also fallen as a share of
domestic demand over the period, due to the rising popularity of domestically produced craft beers. Despite this, the
number of international beer brands being produced and sold under licence in Australia has grown over the past five
years, partially offsetting declines in the total value of imports. Major player Lion brews Heineken and Kirin locally
under license. Other industry players also have relationships with global breweries. For example, Coopers Brewery
produces and distributes Carlsberg and Sapporo under licence.
DOWNSTREAM SUPERMARKETS
Heavy discounting in the Liquor Retailing industry has negatively affected

beer manufacturers over the past five years.
Coles and Woolworths have used their growing market power to reduce shelf space for branded products to
promote their own private labels, such as Woolworths-owned John Boston and Coles-owned Steamrail. This has
forced producers to accept lower prices through heavy discounting, putting downward pressure on beer prices.
Therefore, producers have had to reduce profit margins to retain market share. Major players Asahi and Lion have
incurred higher marketing and advertising costs while competing for market share, with the launch of new premium
brands accompanied by expensive promotional campaigns. Overall, industry profit margins have decreased over the
past five years, although rising demand for high-margin premium and craft beer has limited further declines.
ACQUISITIONS
Mergers and acquisitions have defined the Beer Manufacturing industry

over the past decade.
In October 2016, Anheuser-Busch InBev NV (AB InBev), the world's largest brewer, acquired Carton & United
Breweries' (CUB) parent company SAB Beverage Investments Pty Ltd for approximately US$105.5 billion. In July
2019, AB InBev entered into a deal to sell the Australian subsidiary to Asahi Holdings (Australia) Pty Ltd for $16.0
billion. The acquisition was finalised in June 2020, on the condition that Asahi divest some of its cider and beer
brands. Together, foreign-owned brewers Asahi and Lion are estimated to account for over 70% of industry revenue
in 2021-22.
Many small brewers have entered the market over the past five years, driven by the shift in consumer preferences
towards high-quality products. This has significantly increased industry enterprise numbers over the period. While
craft breweries make-up the majority of enterprises, they only contribute a small proportion of industry production
and revenue. In response to growing demand for craft beer, large industry operators like Lion have increased their
craft beer offerings through acquisitions and investing more in their craft brewing subsidiaries.
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Historical Performance Data

Domestic
Revenue IVA Establishments Enterprises Employment Exports Imports Wages Demand
Year ($m) ($m) (Units) (Units) (Units) ($m) ($m) ($m) ($m)
2012-13 5,528 1,382 206 189 3,889 24.7 314 388 5,818
2013-14 5,512 1,604 276 224 3,840 25.9 403 409 5,889
2014-15 5,435 1,680 317 294 4,389 26.9 432 509 5,840
2015-16 5,303 1,803 401 371 4,937 35.4 494 610 5,762
2016-17 4,816 1,662 468 441 5,391 41.1 472 615 5,247
2017-18 4,941 1,695 547 503 5,392 42.1 442 605 5,341
2018-19 5,162 1,781 629 560 6,045 40.2 451 597 5,572
2019-20 4,942 1,819 723 601 5,393 33.7 459 558 5,368
2020-21 5,134 1,689 794 696 5,961 22.3 387 607 5,498
2021-22 4,906 1,639 856 737 6,010 21.5 394 573 5,279
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Industry Outlook
Outlook The Beer Manufacturing industry is forecast to grow its revenue over the
next five years.
A projected slight decline in per capita alcohol consumption will likely be offset by growing demand for high-priced
premium and craft beers. Product premiumisation trends are projected to continue, and consequently, the industry's
major players are anticipated to progressively increase their presence in the craft beer segment. Internal and
external competition is projected to increase over the next five years due to growth in enterprise numbers and
supermarkets' private-label beer offerings. In particular, the continued shift in demand away from traditional beers
towards premium alcoholic beverages and non-alcoholic drinks, will likely increase external competition. Overall,
industry revenue is forecast to increase at an annualised 2.1% over the five years through 2026-27, to $5.4 billion.
PREMIUM AND CRAFT BEER
The premium and craft beer segments are forecast to continue

outperforming other types of beer over the next five years, with craft and
fruit-infused beer likely to grow strongly.
An appreciating Australian dollar will likely boost the competitiveness of premium foreign brands, increasing imports
in nominal terms over the period. Despite this trend, rising consumer demand for quality and variety is projected to
drive growth in the craft beer segment. This segment is anticipated to continue growing and account for an
increasing share of industry revenue over the period. Over the next five years, growth in establishment numbers is
anticipated to be slower than the past five-year period, as the beer market reaches saturation. Meanwhile,
employment numbers are forecast to continue rising over the period, in line with growth in industry participation.
SUPERMARKETS
Supermarkets are forecast to continue pushing into the private-label beer

market over the next five years.
Woolworths and Coles have capitalised on their dominance in the Liquor Retailing industry to establish favourable
distribution agreements with beer producers. Woolworths, Coles and ALDI have also introduced private-label beer
brands, which they often sell at discounts compared with branded products.
Intensifying competition is anticipated to hinder industry profitability growth over the next five years. This trend will
likely intensify as independent retailers, struggling with price competition from Woolworths, Coles and ALDI,
increasingly require discount prices from manufacturers. Increasing membership in buying groups, such as
Independent Brands Australia, will strengthen independent retailers' ability to negotiate better deals. However,
consumer preferences will likely continue shifting towards higher value premium beers, which attract higher prices
and offer larger margins. Additionally, industry firms are anticipated to produce more international brands under
contract in Australia over the period.
COMPETITION
Internal competition among boutique brewers and the industry's major
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players is anticipated to increase over the next five years.

In July 2017, the ACCC released its findings regarding contracts between dominant brewers and pubs that allegedly
limited craft brewers' ability to get their beers on tap at Australian pubs. Although the findings stated that these
contracts were unlikely to significantly lessen competition, the ACCC will likely continue monitoring such
arrangements. Any future action would likely boost industry competition and provide boutique brewers with further
opportunities for growth. Craft and boutique brewers are projected to increasingly group together to strengthen their
contract bargaining power for taps and shelf space at major retailers and bars over the next five years.
In December 2019, the ACCC announced its concerns over the takeover of CUB by Asahi, expressing that the
buyout could reduce competition in the cider and beer markets, and raise prices. However, in March 2020, the
ACCC announced its approval, on the condition that Asahi sells its cider brands Strongbow, Bonamys and Little
Green, and its beer brands Stella Artois and Becks. The required divestments of the takeover are projected to
address competition concerns, by giving another business the opportunity to take on a competitive role in the highly
concentrated market. In January 2021, Heineken finalised the acquisition of the cider and beer brands from Asahi.
Performance Outlook Data

Revenue IVA Establishments Enterprises Employment Exports Imports Wages Domestic
Year ($m) ($m) (Units) (Units) (Units) ($m) ($m) ($m) Demand ($m)
2021-22 4,906 1,639 856 737 6,010 21.5 394 573 5,279
2022-23 5,109 1,707 963 816 6,269 23.4 405 590 5,491
2023-24 5,144 1,790 1,041 871 6,369 26.0 407 602 5,525
2024-25 5,292 1,868 1,127 954 6,474 27.0 415 621 5,680
2025-26 5,358 1,907 1,217 1,022 6,582 27.7 415 638 5,745
2026-27 5,449 1,896 1,311 1,094 6,684 28.5 426 650 5,847
2027-28 5,488 1,921 1,389 1,154 6,692 29.6 439 656 5,897
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Industry Life Cycle The life cycle stage of this industry is Mature
LIFE CYCLE REASONS
Per capita beer consumption is declining, but some segments have grown
Establishment and enterprise numbers have increased significantly
Industry value added growth is underperforming real GDP
The Beer Manufacturing industry is in the mature phase of its life cycle. Industry value added (IVA) is projected to
grow at an annualised 1.3% over the 10 years through 2026-27. This represents an underperformance relative to
the overall economy, with real GDP forecast to grow at an annualised 2.3% over the same period. Increasing IVA,
combined with a rise in industry participation, is indicative of a growing industry. However, this is largely attributable
to growth in the craft beer segment, as numerous small-scale craft breweries are increasingly entering the industry
and introducing new products into the market.
The industry's traditional beer segment is largely stable, with brands such as XXXX, Carlton Draught and Victoria
Bitter continuing their dominance. However, they are increasingly struggling to differentiate themselves from their
competitors, and rely on marketing and promotion, alongside brand reputation to compete. Meanwhile, the craft beer
segment has been expanding strongly, with industry firms continually introducing new innovative products. Craft
brewers regularly highlight the unique brewing methods and creative recipes of their beers, which appeal to variety-
seeking consumers.
The differences in market conditions for traditional beer manufacturers and craft brewers demonstrate that the
industry exhibits characteristics aligning with two life cycle stages. Overall, the industry is considered to be in the
mature stage of the life cycle. Established beer brewers, which are generally involved in the traditional beer
segment, have been rapidly acquiring successful craft breweries and increasing their production to dominate the
craft beer segment.
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Products & Markets

Supply Chain Key Buying Industries Key Selling Industries
1st Tier 1st Tier
Butter and Dairy Product Manufacturing in Australia Flour and Grain Mill Product Manufacturing in Australia
Liquor Wholesaling in Australia Paperboard Container Manufacturing in Australia
Liquor Retailing in Australia Glass and Glass Product Manufacturing in Australia
Pubs, Bars and Nightclubs in Australia Metal Drum, Can and Bin Manufacturing in Australia
Hotels and Resorts in Australia Water Supply in Australia
2nd Tier 2nd Tier
Supermarkets and Grocery Stores in Australia Grain Growing in Australia
Products & Services
Mainstream full-strength lagers have traditionally dominated the Beer

Manufacturing industry in Australia.
However, consumer preferences have been favouring quality over quantity, which has increased the premium and
craft beer segments, while greater health awareness has driven demand for low-carb beer. A fall in per capita
consumption of beer has negatively affected industry demand over the past five years. Rising health consciousness
and the popularity of non-alcoholic beverages have discouraged consumer demand for beer at the retail level. The
COVID-19 lockdown restrictions have also disrupted demand from pubs, bars and nightclubs over the past three
years, although the rise of off-premises alcohol consumption among housebound consumers has supported
production orders for industry players.
FULL-STRENGTH TRADITIONAL BEER
Full-strength traditional beer represents the largest share of industry

revenue.
This segment includes traditional and bulk lagers of between 4.0% and 5.0% alcohol by volume (ABV). This
segment has declined as a proportion of industry revenue over the past five years. Changing consumer preferences
have contributed to consumers moving away from traditional full-strength beers towards craft and premium
segments. Traditional full-strength beers include Victoria Bitter, Carlton Draught, Melbourne Bitter, Tooheys, Swan
Lager, Emu Bitter, James Boag's Draught, Cascade Draught and Foster's.
PREMIUM BEER
Premium beer is the second largest product segment.

This segment includes full-strength, premium international and domestic beers. Premium beer has increased as a
share of industry revenue over the past five years, driven by consumer preferences for quality and variety.
Consumers moving away from traditional brands have underpinned growth in this segment. Much of this growth has
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come from international brands, with local producers signing contracts with global brewers to produce and distribute
international brands in Australia. Major industry players produce leading international premium brands locally under
contract. For example, Lion brews Heineken under licence, and Coopers Brewery brews and distributes Carlsberg
and Sapporo in Australia. These contracts have proved profitable for local producers and have increased these
brands' availability in Australia.
CRAFT BEER
The definition of craft beer originally referred to brands that produced less
than 25 million litres per annum.
However, as the industry's larger players have acquired craft brewers, the difference between craft beer and
premium beer is now mostly in terms of how a brand is marketed. As a result, some brewers are moving towards
calling themselves independent brewers rather than craft brewers. Small boutique brewers continue to enter the
craft beer market.
Craft brewers have benefited from the same trends as premium beer producers over the past five years, with
drinkers looking to try new beverages with unique flavours. As a result, this segment has increased as a share of
industry revenue over the past five years. A growing interest in high-quality and locally produced beverages has
supported segment growth. Prominent craft brewers include BentSpoke and Stone & Wood Brewing Co.
MID-STRENGTH BEER
The mid-strength segment includes beer of between 3.0% and 4.0% ABV,
and has expanded as a share of revenue over the past five years.
While sales of full-strength beer have generally declined, mid-strength beer has grown in popularity, with health
awareness and the dangers of excessive alcohol consumption supporting this trend. Great Northern Super Crisp
and XXXX Gold are among the highest selling beers in this segment.
LOW-CARBOHYDRATE BEER
The low-carbohydrate beer segment includes beers marketed as low-

carbohydrate that generally contain about one gram of carbohydrates per
100 millilitres, compared with between 2.5 and 4.0 grams per 100 millilitres
for traditional beers.
Rising health awareness, strategic marketing by beer producers and consumers' desire for variety have supported
this segment's growth as a share of revenue over the past five years. Pure Blonde contains 0.5 grams of
carbohydrates per 100 millilitres, and is the segment leader. Pure Blonde's success has prompted the introduction of
several similar products, including Hahn Super Dry (Lion), Platinum Blonde (Woolworths), Maxx Dry (Coles) and
Coopers Dry (Coopers Brewery).
LIGHT BEER
The light beer segment includes beers of between 1.0% and 3.0% ABV.
This segment has declined as a proportion of industry revenue over the past five years, as drinkers have switched
from light beer to mid-strength and low-carbohydrate beers. Light beer has also suffered from the growing popularity
of other alcoholic beverages such as wine and cider, and growth in the variety of non-alcoholic beverages available
in hospitality establishments.
Demand Several factors determine demand for industry products.

Determinants
Changes in real household discretionary income, price and health consciousness all affect demand for beer. A shift
in consumer preferences has boosted demand for premium and craft beers, at the expense of traditional full-
strength beer, as consumers' beer consumption habits have favoured quality over quantity.
Discretionary income
A rise in real household discretionary income generally increases consumers' expenditure on alcoholic beverages,
such as beer. In contrast, an increase in discretionary income may allow consumers to switch to more expensive
premium and craft beers, rather than increasing the total volume of beer purchased. Rising discretionary incomes
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over the past five years have boosted consumer demand for higher margin beers.
Price
The price of beer relative to substitute alcoholic beverages, such as wine and spirits, is affected by taxation. For
beer and spirits, the excise is indexed to the consumer price index (CPI) twice a year. For wine, the wine
equalisation tax is fixed at 29.0% of the wholesale sales value. As wine prices depend on global demand and supply
conditions, they do not generally increase in line with CPI. Rises in CPI can therefore increase taxation on beer and
spirits relative to taxation on wine. A growing tax differential has contributed to wine becoming less expensive
relative to beer over the past five years, prompting consumers to substitute beer with other drinks.
Health consciousness and consumer trends
Rising health consciousness in Australia over the past five years has reduced per capita alcohol consumption. As a
result, beer consumption trends have shifted towards quality over quantity. This has boosted the premium and craft
beers segments as shares of industry revenue, at the expense of traditional full-strength beer. Health consciousness
has also supported demand for mid-strength and low-carbohydrate beer.
Marketing and beverage taste tend to influence consumer preferences, with marketing activities driving demand for
beer. Advertising expenditure by the major players can increase their respective market shares and the market's
total size by promoting overall beer expenditure. Government regulations also affect demand for beer. Regulations
affecting the industry include minimum drinking age laws, trading hour restrictions and penalties for drink-driving.
Marketing efforts by government agencies, such as the state Traffic Accident Commissions, tend to negatively affect
demand for beer. Regulations and marketing have significantly affected the amount and type of alcoholic beverages
consumed over the past decade.
Major Markets
Beer manufacturers sell to a variety of downstream markets.

While brewers are a key supplier to liquor retailers, pubs and restaurants, the Liquor Wholesaling industry is the
primary market for industry operators. However, the growing dominance of retail giants Woolworths and Coles has
given the supermarket chains significant bargaining power to negotiate directly with manufacturers, bypassing
wholesalers.
WHOLESALERS
The wholesale market reflects beer sold to downstream markets (e.g.

bottle shops, supermarkets, pubs and bars) using a wholesale distribution
function.
This segment includes industry firms such as Lion and CUB that have in-house wholesale functions. Consequently,
this market remains the Beer Manufacturing industry's largest market, accounting for almost half of industry revenue.
Many independent liquor retailers operate in Australia, and are generally serviced by wholesalers such as Metcash,
as the small-scale nature of these retailers does not allow them to deal directly with manufacturers. Wholesalers
also cater to other retail markets, such as bars and clubs, and restaurants and cafes, which cannot or are unwilling
to establish their own logistics channels. Despite an overall increase in demand from liquor wholesalers, this
segment has declined as a share of industry revenue over the past five years. Wholesalers are losing market share
to retailers, due to wholesale bypass stemming from the supermarkets' rising bargaining power.
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RETAILERS
Retailers represent the second largest market segment.

As an increasing proportion of alcohol is being sold through retail liquor outlets, this route to market is becoming
increasingly important. As a result, this segment has increased as a share of revenue over the past five years. This
segment is also becoming heavily concentrated. The two major retailers, Woolworths and Coles, are increasingly
dominating the segment through their liquor stores and online liquor subsidiaries. As Woolworths has continued to
expand its Dan Murphy's stores over the past five years, Coles has focused on extending online presence of its
Liquorland operations (e.g. including the outlets on Uber Eats). The dominance of these retailers gives them a
competitive advantage in marketing their own private-label beverages and bargaining power to negotiate with
manufacturers, bypassing wholesalers.
OTHER MARKETS
Some specialty bars, clubs and pubs also source beer directly from
manufacturers.
This market is particularly important for smaller craft breweries, which benefit from the exposure and cheaper
transport costs related to keg supply for bars. This segment is one of the fastest growing due to the increasing
number of pubs and bars in Australia.
The other markets segment includes export markets, restaurants and cafes, and online retailers that are serviced by
small independent breweries. These smaller brewers are typically craft brewers that sell their products online or
through mail orders. Other markets have declined as a share of revenue over the past five years, due to the trading
restrictions on hospitality firms and logistical constraints, in the aftermath of the COVID-19 pandemic. The total value
of exports fell sharply by 16.2% and 33.8% in 2019-20 and 2020-21, respectively, with the supply chain disruptions
causing delays in the shipment of beers and weaker global economic conditions weighing on global demand for
domestically produced beer.
International Trade Exports in this industry are Low and Decreasing
Imports in this industry are Medium and Decreasing
The Beer Manufacturing industry is exposed to a moderate level of international trade and has recorded a significant
trade deficit over the past decade. Industry players have minimal incentive to export beers to international markets.
Most local producers lack the scale to compete directly with overseas manufacturers, in terms of operating costs and
brand reputation.
Exports
Exports are expected to account for less than 0.5% of industry revenue in the current year, especially as sporadic
20 IBISWorld.com
COVID-19 lockdown restrictions across the world continue disrupting supply chains and overseas transportations.
New Zealand is the largest export destination for domestically produced beer, accounting for 46.7% of industry
exports, primarily due to the geographic proximity of the two countries. This trend is followed by Singapore, the
United Kingdom and China as other key export destinations.
However, firms have little incentive to mass export Australian-produced beers. Most beers produced in large
quantities are owned by large foreign multinational companies that have production and distribution facilities in
multiple countries. Companies like Lion find it cheaper to produce beer in the destination country to reduce
transportation costs, or in countries with lower wage costs than Australia. Exports are anticipated to decline at an
annualised 12.2% over the five years through 2021-22, to $21.5 million. This decline is largely due to the ongoing
logistical constraints and weaker global demand in the aftermath of the COVID-19 pandemic.
Imports
Imports are expected to decline at an annualised 3.5% over the five years through 2021-22, to reach $393.9 million.
The shift in consumer preferences towards high-quality, locally made craft beer has contributed to this trend. Imports
have fallen as a share of domestic demand over the period, to account for an estimated 7.5% in the current year.
Greater consumer interest in craft beers from local brewers has driven contributed to this decline.
Corona is the highest selling imported beer, which is reflected in Mexico accounting for the largest share of beer
imports into Australia. However, in April 2020, production of Corona beer was temporarily suspended in Mexico,
following the initial outbreak of COVID-19. This, combined with global supply chain disruptions, caused shortages of
Corona in the domestic market over 2020-21. The total value of imports also fell by 15.8% during the year, with the
closure of licensed establishments during the lockdown periods hindering demand for imported beer.
Other main importers include New Zealand, Italy and Germany. Many Australian manufacturers have integrated
operations covering multiple distribution channels, which makes it harder for foreign importers to enter the market.
As a result, many foreign breweries have initiated distributional partnerships with local breweries.
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Business
Locations
The geographic spread of the Beer Manufacturing industry correlates closely with the distribution of the Australian population.
Industry operators traditionally establish themselves in metropolitan areas to reduce transport costs between storage and
production facilities, and downstream markets. Hence, breweries are most concentrated in Victoria, New South Wales and
Queensland, accounting for over 70% of industry operators. However, growth in the craft beer segment has contributed to the
industry's geographic dispersal, as craft breweries often operate in regional or rural areas.
Victoria is home to prominent craft breweries including Mountain Goat, Holgate and the Mornington Peninsula Brewery. The
success of craft breweries in Victoria has been aided by Melbourne's growing small bar and pub culture, and steady demand for
quality and variety. Lion, which is based in New South Wales, brews Tooheys, Hahn and James Squire. Craft brewery Stone &
Wood operates from Byron Bay, NSW. Queensland's largest brewery is Lion's XXXX, and craft brewer Balter Brewing Company is
also based on the Gold Coast, QLD. The state's share of craft beer market is expected to grow over the next five years, as the
Queensland Government and regional craft brewers continue implementing the Queensland Craft Brewing Strategy, which was
introduced in November 2018.
Lion's Little Creatures originated in Western Australia, and the state is also home to ASX-listed brewer Gage Roads Brewing
Company. Coopers Brewery Limited, the largest Australian-owned brewery, dominates South Australian brewing. South Australia
includes several successful craft brewers that operate in regions of the state traditionally associated with wine, including Vale
Brewing and Barossa Valley Brewing. These operators have successfully used their region's reputation for producing high-quality
wine, and used existing production and distribution channels. Tasmania is home to the Lion-owned James Boag's and several
craft breweries, including Moo Brew. In September 2018, new craft brewery, Alice Springs Brewing Co, opened the first brewery in
the Northern Territory.
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Competitive Landscape
Market Share
Concentration
Concentration in this industry is High
The Beer Manufacturing industry is highly concentrated, with the two major players, Asahi and Lion, accounting for
approximately 80% of industry revenue in 2021-22. Market share concentration has increased over the past five
years, following Asahi's acquisition of Carlton & United Breweries (CUB) from AB InBev in June 2020, and Lion's
investment towards expanding in the craft beer segment. Outside of these players, many small-scale, boutique
breweries operate in the industry, primarily serving a niche market or a specific regional area. Changes in
consumers' beer drinking habits have boosted demand for higher margin product segments, allowing small, craft
breweries to enter the market over the past five years. Rising health consciousness has contributed to consumers
preferring quality over quantity in their beer drinking consumption patterns. As a result, the market shares of
premium and craft beer brewers have increased over the period.
Key Success IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:
Factors
Market research and understanding:
Due to the industry’s competitive nature, beer producers must be aware of changing consumer tastes and adjust
their products and marketing to meet demand.
Establishment of brand names:

Brand names and promotion are important, particularly in the craft beer segment, where products depend on having
a reputation for quality to justify higher prices.
Control of distribution arrangements:

Distribution arrangements with retailers, clubs and pubs are key to success, as competition for shelf space in
supermarkets and beer taps in licensed establishments is fierce.
Economies of scale:
Beer manufacturers with larger production facilities can achieve lower per-unit costs, which can enable lower pricing,
increased marketing expenditure or capital investment.
Economies of scope:
Firms that manufacture a range of products, including other beverages, can achieve greater cost efficiency in
activities such as distribution, marketing and administration.
Guaranteed supply of key inputs:

Beer manufacturers require continuous supplies of raw materials, such as malt, refined sugar and water, to ensure
consistent quality and production of beer. This can help firms establish multi-year contracts with wholesalers and
retailers.
24 IBISWorld.com
Cost Structure
Benchmarks
Profit
Industry profitability has decreased over the past five years, due to a
fall in beer consumption, stronger competition and price discounting by
liquor retailers. Rising popularity of higher margin, locally produced craft
beer has limited further declines in industry profit margins. Small-scale
breweries have introduced a range of products in the craft beer
segment, including the recent release of kombucha beer blends.
Demand from pubs, bars and nightclubs has fallen over the past five
years, due to the COVID-19 lockdown restrictions. Despite the easing
of restrictions, licensed establishments have struggled with limits on
patron numbers. Meanwhile, greater off-premises beer consumption
during the lockdown periods, has supported industry profitability over
the past three years.
Wages
Wages costs are the second largest expense for the industry and have
declined as a share of revenue over the past five years. The
automation of most production processes among large-scale producers
has reduced the need to hire highly skilled brewers on a full-time basis,
leading to a decline in the industry's average wage over the period.
Meanwhile, a significant number of labour-intensive craft brewers has
entered the industry. Many craft brewery start-ups hand-bottle their
products, with small-scale, affordable bottling machines only coming
onto the market in recent years. This trend has limited falls in wage
costs over the period.
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Purchases
Purchases are the largest cost for industry operators. Beer producers
purchase packaging materials such as glass, aluminium, cardboard and
kegs, and raw materials such as malt, refined sugar, hops and water.
Brewers also purchase preservatives and colourings. Purchases have
risen as a share of industry revenue over the past five years, due to
increases in input prices, mainly coarse grains, and paper products and
paperboard. Many manufacturers have partially passed these cost
increases on to consumers, in an attempt to boost company profit
margins.
Other Costs
Other costs include rent, utilities, advertising, research and

development, administration and distribution expenses. The industry's
high mechanisation means that depreciation costs are notable,
particularly for large beer manufacturers. Plant and equipment
upgrades have increased depreciation costs as a share of industry
revenue over the past five years. However, craft beer manufacturers
generally use less machinery, often performing tasks such as bottling
by hand. This has partially offset rising industry depreciation expenses.
Advertising plays a significant role in company costs, due to the large

number of products produced by both Asahi and Lion. Promotional
activities tend to increase over the warmer months, when beer
consumption is the highest. While utilities such as water, electricity and
gas are necessary for beer production, they account for small
proportions of industry revenue.
Basis of Competition in this industry is Low and the trend is Increasing
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Competition
The Beer Manufacturing industry exhibits a low level of competition, and
this trend has increased over the past five years.
The industry has high barriers to entry, with most of the market controlled by the two major players Asahi and Lion.
The two companies hold substantial power over beer pricing and distribution. However, margins have been under
pressure over the past five years, as Coles and Woolworths have increasingly dominated the retail sector, and the
market shares of craft beer makers have grown. The basis of competition has become less related to price, and
more driven by branding and beer consumption trends.
INTERNAL COMPETITION
Falling market volumes, caused by lower beer consumption across the

country, have intensified the rivalry between the industry's two largest
manufacturers.
The market shares of Lion and Asahi are high, and Asahi has increased its market share significantly through the
acquisition of CUB from AB InBev in mid-2020. This trend has intensified competition based on brand values,
advertising (moving consumers to higher value products) and packaging in recent years.
Industry operators generally engage in significant marketing and advertising activities, to compete for new
consumers and maintain brand loyalty. The major players have sought to maintain market share through supply
contracts with hotels, limiting the competitiveness of smaller operators. While consumers have traditionally been
loyal to particular beer brands, this has shifted over the past decade as consumers have become more willing to
switch between brands and try new beverages. This trend has benefited imports and craft beer brewers.
EXTERNAL COMPETITION
Beer brewers face heavy competition from other alcoholic beverage

manufacturers, including cider and spirit manufacturers.
However, both Asahi and Lion participate in these other beverage manufacturing industries, allowing them to benefit
from economies of scope due to their broad beverage bases. Beer manufacturers also face external competition
from imported brands, with imports accounting for 7.5% of domestic demand in the current year. However, imports
have declined both in nominal terms and as a share of domestic demand over the past five years, partly due to the
COVID-19 supply chain issues.
Barriers to Barriers to Entry in this industry are High and the trend is Decreasing
Entry
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The Beer Manufacturing industry exhibits high barriers to Barriers to Entry Checklist
entry. This is due to several factors, including the
dominance of existing players, the challenges involved in Competition Low
developing effective distribution channels and high initial
capital costs. Establishment numbers have grown Concentration High
significantly over the past five years, indicating a
decreasing level of barriers to entry. However, the
Life Cycle Stage Mature
presence of major players Asahi and Lion makes
successful entry on a large scale difficult. Firms can more
easily enter on a small scale and service a localised area, Technology Change Medium
as demonstrated by the growing number of craft brewers
entering the market. This trend has driven establishment Regulation & Policy Heavy
number growth over the past five years.
Industry Assistance Low
The industry is dominated by two major companies, Asahi
and Lion, which have substantial brand recognition,
effective distribution channels and large marketing
budgets. Both companies also own several craft beer
brands that compete with small industry operators in
niche markets. Major industry players have existing brand
loyalty and control over distribution channels. The
incumbent major brewers in Australia are significantly
diversified (importing and producing other beverages),
which has enhanced their overall distribution capabilities
and market intelligence.
The industry's barriers to entry include high sunk costs

and other ongoing capital requirements such as site costs
and cost of establishing manufacturing facilities. Transport
costs are generally high relative to the value of the final
product, resulting in establishments usually operating in
proximity to their primary market. In turn, this can incur
significant costs when establishing a new production site.
Moreover, industry companies require either significant
investment in distribution channels or the ability to
establish several sites to reduce reliance on distribution
channels. Distribution channels such as pubs and other
licensed venues are also important, where the inability to
establish long-term supply contracts may deter potential
industry operators from entering the industry. Additionally,
large-scale manufacturing facilities require substantial
investment in plant and equipment. The high cost of some
equipment has resulted in some microbreweries still
hand-bottling beers, despite having been operating in the
industry for several years.
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Industry Globalization in this industry is High and the trend is Increasing

Globalization
The Beer Manufacturing industry exhibits a high level of globalisation, and this trend has increased over the past five
years. While international trade contributes a small proportion of revenue, foreign ownership is high in the industry. The
industry's two major players, Asahi and Lion, which account for over 70% of revenue, are both foreign owned. Asahi
Holdings (Australia) Pty Ltd is owned by the Japanese multinational beverage company, Asahi Group Holdings Limited,
while Japan-based Kirin Holdings owns Lion.
Due to high transport costs relative to product value, large brewers have subsidiaries brew their beers domestically, or
enter into contracts to have their beer brewed under license or distributed by a partner in a foreign country. As a result,
industry exports are low and imports are moderate. Australian-owned Coopers Brewery has overseas customers in
Europe, the Americas and Asia. Coopers' manufacturing operations are based in South Australia, and it maintains sales
divisions in its international markets. Globalisation in the Beer Manufacturing industry is expected to increase over the
next five years, as multinational beverage giants seek to continue increasing their market shares.
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Major Companies
Major Players Asahi Holdings (Australia) Pty Ltd
Market Share: 43.3%
Brand Names Asahi Super Dry, Cricketers Arms, Grolsch,

Victoria Bitter, Carlton Drought, Crown Lager, Pure
Blonde
Asahi Holdings (Australia) Pty Ltd is the local arm of the Japanese multinational beverage company, Asahi Group
Holdings Limited. The company entered the Australian Beer Manufacturing industry in August 2011, when it
purchased Independent Distillers Group, a New Zealand-based producer and wholesaler. Asahi operates in the
industry through its local subsidiary, Asahi Premium Beverages.
The company imports and distributes Asahi Super Dry, and brews Cricketers' Arms beer at its manufacturing
facility in Laverton, Melbourne. However, most of the company's revenue is generated through importing and
distributing Asahi Super Dry. In September 2015, the company pushed further into the growing craft beer market by
acquiring the Mountain Goat brand and brewery. In 2016, the company acquired Peroni and Grolsch from
Anheuser-Busch InBev SA/NV (AB InBev).
Asahi has significantly expanded its market share through the acquisition of Carlton & United Breweries (CUB) from
AB InBev in mid-2020. In July 2019, AB InBev announced an agreement to divest its Australian subsidiary, CUB, to
Asahi Group Holdings for $16.0 billion. Despite ACCC's preliminary view that the proposed acquisition could
potentially reduce competition in cider and beer markets, and limit consumer choices, ACCC approved the
acquisition in April 2020, requiring Asahi to divest some of its cider and beer brands. The purchase was finalised in
June 2020. In January 2021, Heineken acquired the five brands Asahi had to divest for the acquisition of CUB,
which were its cider brands Strongbow, Bonamys and Little Green, and the licences for beer brands Stella Artois
and Becks.
Financial performance
Asahi's industry-specific revenue is expected to increase substantially, at an annualised 67.4%, over the five years
through December 2022, to $2.1 billion. This represents a significant outperformance of the overall industry. The
acquisition of craft beer brands and its purchase of CUB has primarily driven the company's revenue growth over
the period. The company's industry-specific profitability has also grown over the past five years, due to greater
30 IBISWorld.com
economies of scale.
Asahi Holdings (Australia) Pty Ltd - industry segment performance*

Revenue Growth
Year** ($m) (% change)
2012 59.3 N/C
2013 62.0 4.6
2014 71.4 15.1
2015 79.0 10.7
2016 94.5 19.6
2017 161.5 70.8
2018 172.4 6.7
2019 173.7 0.8
2020 639.3 268.1
2021 1,957.8 206.2
2022 2,123.0 8.4
Source: IBISWorld
Note: *Estimate **Year end December
Lion Pty Ltd
Market Share: 30.6%
Brand Names XXXX, West End Draught, James Squire,

Little Creatures, Heineken, James Boag's, Furphy, Iron
Jack
Lion Pty Ltd is a wholly owned subsidiary of Japan-based Kirin Holdings Company Limited. Lion operates across
Australia and New Zealand, producing and distributing a variety of beverages and food products including beer,
wine, spirits, fruit juice, milk, cheese and soy beverages. The subsidiary was created following Kirin's 2009 takeover
of Lion Nathan National Foods Pty Ltd, an Australasian food and beverage group.
Lion's portfolio of beer brands includes XXXX, Tooheys, Iron Jack, Furphy, Hahn, James Boag's, Emu and West End
Draught. The company also has licensing rights in Australia for a range of international beers, including Heineken,
Kirin, Guinness, Birra Moretti and Kilkenny. As part of the partnership between Lion and Heineken, Lion provides the
local brewing, marketing and distribution for Heineken in Australia.
Lion also owns craft beer brands such as the Little Creatures and White Rabbit, and cider brands Little Creatures
Pipsqueak and 5 Seeds. The company operates two Little Creatures breweries, in Geelong, VIC, and Fremantle, WA.
The Geelong brewery was built to supply east-coast markets and reduce transport costs. In early 2015, the
company consolidated its Victorian brewing operations by moving White Rabbit brand brewery from Healesville,
VIC, to Geelong, VIC. In June 2016, the company acquired Byron Bay Brewery Pty Limited for $3.0 million, and
entered into a partnership with the Imperial Hotel in Eumundi, QLD, in July, reopening the Eumundi microbrewery.
Financial performance
Lion Pty Ltd's industry-specific revenue is expected to decline at an annualised 3.4% over the five years through
December 2022, to $1.50 billion. This represents an underperformance of the overall industry over the same
period. AB InBev's acquisition of SAB Beverage in October 2016 caused Lion to lose several contracts, which
negatively affected revenue and contributed to Lion's underperformance of the industry over the period.
Additionally, the acquisition of Carlton & United Breweries by Asahi in June 2020 has placed further competitive
pressures on the company. These factors have also caused the company's profit margins to decline over the
period. Meanwhile, the company has had some positive signs over the past five years. Lion has successfully grown
its mid-strength XXXX Gold brand, and its Iron Jack and Furphy brands.
31 IBISWorld.com
Lion Pty Ltd - industry segment performance*

Revenue Growth
Year** ($b) (% change)
2011-12*** 1.90 N/C
2012-13*** 1.96 3.2
2013-14*** 1.90 -3.1
2014-15*** 1.82 -4.4
2015-16*** 1.67 -7.9
2017**** 1.78 6.4
2018 1.72 -3.3
2019 1.72 -0.3
2020 1.55 -9.7
2021 1.53 -1.4
2022 1.50 -2.0
Source: IBISWorld
Note: *Estimate **Year end December ***Year end September ****15 months to December
Other Companies While two major brewers dominate the industry, several small boutique and craft breweries also operate across the
country. According to the ABS, approximately 90% of industry operators employed fewer than 20 staff in 2019-20
(latest available data), and over 85% of total firms generated less than $2.0 million in annual revenue. This
suggests that the industry is fragmented.
Most small industry operations are coupled with a licensed establishment where beer is sold on tap, while bottled
beer is sold either directly from the brewery or online. Many of these craft beers are also sold through retail outlets.
However, smaller players' distribution of beers from such craft brewers is limited due to high transportation costs
and low brand recognition.
Coopers Brewery Limited
Market Share: 4.0%

Coopers Brewery Limited is a family-controlled company based in Adelaide. Following Kirin's acquisition of Lion,
and SAB Beverage's acquisition of Foster's, Coopers Brewery became the largest Australian-owned brewery. The
company brews a range of beers, including ales and stouts, and markets its products domestically and
internationally. Outside South Australia, Coopers distributes its beers through its subsidiary Premium Beverages.
Coopers promotes itself on the basis of its strong family brand, home-brew specialisations, long history in the
market and the uniqueness of its beers. In 2018, the company announced it was discontinuing its low-carbohydrate
product, Coopers Clear, and launching a new offering in this segment, Coopers Dry. Coopers also distributes and
markets international beers including Carlsberg, Kronenbourg, Sapporo and Mythos.
Coopers exports to more than 26 countries and continues to specialise in home-brew and craft beers. Coopers is
also a large-scale producer of malt extract, which is used in brewing, baking, confectionery, breakfast cereal, malt
beverages, dairy products and condiments. The company mainly exports its malt-extract products to the Asia-
Pacific region. Coopers is also the dominant player in the Australian home-brew market, providing ingredients and
equipment such as malt extract and fermenting vessels to consumers wishing to brew their own beer at home.
Revenue generated from these activities is not included in the industry.
Coca-Cola Amatil Limited
Market Share: 2.0%

After exiting the industry with SAB Beverage's acquisition of Pacific Beverages, Coca-Cola Amatil (CCA) re-entered
the industry in late 2013 with four new beer brands, including the localisation of US brands Coors and Blue Moon.
The Australian Beer Company is a joint venture between CCA and Casella Wines that produces the craft beer
Yenda. The venture has launched a pale ale, India pale ale, unfiltered lager and mid-strength ale, which are
distributed to pubs, bars and clubs through CCA. Due to divestments required as a result of the AB InBev takeover
of SAB Beverage in 2016, CCA acquired the Australian distribution rights to Miller Genuine Draft and Miller Chill. In
October 2017, CCA bought the WA-based Feral Brewing Company. In September 2019, CCA announced a new
organisational structure by combining its alcohol and coffee operations under the Australian Beverages business,
to generate economies of scale. In October 2021, the company released a statement regarding plans to withdraw
from the Australian beer and cider market, starting with the decision to sell Feral Brewing. In January 2022, CCA
announced that Casella Wines will fully own the Australian Beer Company as of July 2022.
Gage Roads Brewing Co Ltd
Market Share: 1.0%

Founded in 2002, Gage Roads Brewing Co Ltd is a craft brewer based in Fremantle, WA. In 2009, Woolworths
acquired a 25.0% stake in the company for $1.9 million, and has since contracted Gage Roads to produce private-
label products, including a cider brand, to sell in BWS and Dan Murphy's. Gage Roads also operates a brewery in
Palmyra, WA. Despite a strong distribution relationship with Woolworths and expanding brewing capacity, the
company has struggled to grow its market share. Intense competition in the premium beer market, and discounting
32 IBISWorld.com
at Woolworths have limited revenue growth.
In August 2016, Gage Roads announced a refocus on the growing craft beer segment, raising capital to buy back
Woolworths' 25.0% stake in the company. The buyback was completed in October 2016, and is expected to allow
for greater production of high-margin craft beers and reduce the company's reliance on revenue from contract
brewing activities. In September 2017, Gage Roads became the exclusive supplier of beer and cider to the new
60,000-seat Optus Stadium in Perth. In September 2018, the company completed the acquisition of WA-based
brewery, Matso's Broome Brewing Pty Ltd, for $13.25 million. In February 2021, the company announced the
extension of the Optus Stadium contract by additional five years.
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Operating Conditions
Capital The level of capital intensity is Medium

Intensity
The Beer Manufacturing industry has exhibited a moderate
level of capital intensity over the past five years. Most
industry operations, such as brewing and packaging, are
automated using capital-intensive machinery. The industry
is expected to invest $0.32 in capital equipment for every
dollar spent on wages in 2021-22. An increase in the
number of small craft beer brewers in the industry has
limited growth in capital intensity over the past five years.
This trend has been largely driven by the shift in consumer
preference towards high-quality, specialised products. Due
to the labour-intensive nature of these operators, minimal
investment in machinery and equipment is required.
For large brewers, little manual labour is involved in the

production process. However, labour is necessary for
product research, plant maintenance, sales, marketing and
management. As those types of roles are generally highly
paid, the industry has a high average wage. Craft
breweries, which make up the majority of establishments
but a small share of industry revenue, are generally less
capital-intensive. Manufacturers do much of the brewing by
hand, with many breweries also hand-bottling their
products.
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Technology & Potential Disruptive Innovation: Factors Driving Threat of Change

Systems
Level Factor Disruptive Description

Effect
Low Rate of Unlikely A ranked measure for the number of patents

Innovation assigned to an industry. A faster rate of new
patent additions to the industry increases the
likelihood of a disruptive innovation occurring.
Medium Innovation Potential A measure for the mix of patent classes

Concentration assigned to the industry. A greater
concentration of patents in one area increases
the likelihood of technological disruption of
incumbent operators.
Very Low Ease of Entry Very A qualitative measure of barriers to entry.

Unlikely Fewer barriers to entry increases the
likelihood that new entrants can disrupt
incumbents by putting new technologies to
use.
Very High Rate of Entry Very Likely Annualized growth in the number of
enterprises in the industry, ranked against all
other industries. A greater intensity of
companies entering an industry increases the
pool of potential disruptors.
Very Low Market Very A ranked measure of the largest core market
Concentration Unlikely for the industry. Concentrated core markets
present a low-end market or new market entry
point for disruptive technologies to capture
market share.
Low levels of innovation limit the threat to incumbent operators from new technologies disrupting their operations. However,
a low rate of growth in technology can also create exposure for incumbents as the trajectory of innovation in other markets
could lead to unforeseen competitive disadvantages.
Additionally, this industry's structure makes it difficult for new operators to enter and succeed. These barriers have the
potential to disincentivize potential disruptors. Despite these barriers, the industry is experiencing a rapid growth in the
number of companies. A difficult operating environment for new entrants combined with a large cohort of them may create a
situation where these companies may take on a disruptive trajectory in non-traditional markets.
Major market segments for industry operators are relatively diversified. The spread of market segments suggests that there
are limited entry points other than those already served my incumbent operators.
Technology disruption in the Beer Manufacturing industry has come largely in

the form of automation that has refined the production process, from milling to
bottling.
At the milling stage, new machines and software allow brewers to pre-program their machines to distinguish base malts and
specialty grains, eliminating the previous manual process of adjusting temperatures and the distance between rollers. This
has not only sped up the process but has also led to a more efficient use of grain, thereby reducing purchase costs.
Additionally, the CO2 meter, which was developed by the UK-based Pentair plc, is used by beer manufacturers. It improves
the shelf life of beer through better monitoring of oxygen levels, as it measures dissolved oxygen in liquid.
The level of technology change is Medium
The Beer Manufacturing industry exhibits moderate technological change.

Operators use computerisation to ensure product consistency by monitoring ingredient flows and ensuring that ingredients
are mixed in correct quantities at specified temperatures. Large industry operators rely heavily on automation and data
tracking in the production process to ensure product consistency. Improvements in temperature control have reduced waste
from heat-stressed fermentation, enabling brewers to reduce costs. This technology has become increasingly available to
35 IBISWorld.com
smaller players, which has helped them better compete with larger industry players. Past developments in brewing
technology include modifications in the nature and amount of raw material inputs, such as pre-gelatinised rice, hydrolysed
starch syrup, unmalted barley and hop extracts. Other developments have included new techniques and equipment, such
as high-gravity brewing, larger fermenters, unitank fermentation and storage tanks, and centrifuges, which increase
efficiency and conserve energy.
Craft brewers have historically focused on bottled products, but have increasingly introduced canning lines that
automatically package beer. Transporting canned products tends to be more cost-effective, and cans provide greater
protection against light and oxygen damage. Both of these benefits have allowed craft brewers to more effectively enter
export markets. Canning trends will likely increase capital intensity over the next five years.
The Federal Government's R&D Tax Incentive, which provides up to a 43.5% refundable tax offset for eligible R&D
activities, helps drive industry innovation. Craft brewers benefit from the incentive, and can undertake research in areas
such as improving fermentation methods, managing starch levels and custom designing storage. Manufacturers have also
been innovating production processes to reduce energy consumption.
Revenue The level of volatility is Medium

Volatility
The Beer Manufacturing industry exhibits moderate revenue volatility.

Fluctuations in demand from beer drinkers, price competition from substitute goods (such as wine and cider) and volatility in
the price of inputs (such as aluminium and barley) contribute to revenue volatility. While competing products such as wine
and cider have constrained industry revenue growth, falling beer consumption has been offset by growing demand for
higher value premium and craft beers. High price volatility for inputs such as aluminium and coarse grains has contributed
to the industry's revenue volatility. Movements in real household discretionary income and consumer sentiment also affect
demand for industry products and, therefore, revenue. In particular, industry revenue tends to increase in line with growth in
real household discretionary income, as it generally encourages consumers to either increase spending on beer or shift to
higher margin, specialised beers.
Regulation & The level of regulation is Heavy and the trend is Increasing
Policy
Similarly to many other food and beverage industries, particularly alcohol-
related industries, the Beer Manufacturing industry is affected by heavy
regulation.
This trend has increased over the past five years. Federal laws govern most of the legislation relating to beer
manufacturing, with individual states governing related policies such as drink-driving regulations.
FOOD STANDARDS AUSTRALIA AND NEW ZEALAND (FSANZ)
36 IBISWorld.com
The Australian New Zealand Food Standard 2.7.2 covers beer standards,
defining the product and additional foods that can be added to beer.
Other food standards apply to additives and processing aids that can be used in beer manufacturing. Labelling for beer and
other alcoholic products is covered by food standard 2.7.1. This covers the definition of standard drinks, and the way in
which the number of standard drinks and alcohol content should be stipulated on the packaging. FSANZ also develops
standards for food and beverage safety, maximum residue limits, primary production and processing. It also undertakes a
range of other functions, including coordinating national food surveillance and recall systems, conducting research and
assessing policies about imported food and beverages. In October 2018, the Australian and New Zealand governments
announced that warning labels highlighting the risk of alcohol for pregnant women would be made mandatory on all alcohol
products. These will be developed by FSANZ. Several industry players have voluntarily included these labels on their
products since 2011.
EXCISE COMPLIANCE
Excise regulations require producers to measure and sample alcohol content

of the beer they produce to calculate the excise payable.
Significant record keeping is required to comply with these regulations. Regulations also stipulate the way in which the
alcohol content can be measured, sampling methodology and permitted variations of the actual strength from the recorded
strength of alcohol in the beer. Producers are required to keep a raw materials register, recipe sheets and other records as
stipulated by the ATO.
OTHER REGULATIONS
State and territory regulations regarding the consumption of alcohol also

affect demand for industry products.
These regulations include minimum age requirements for the purchase of alcohol and drink-driving regulations. Retail sales
of alcohol products are heavily regulated, requiring retailers and hospitality venues to obtain licences, and to sell alcohol in
the hours stipulated under the licences. While these regulations largely apply to downstream industries, they affect demand
for beer by reducing its availability. Additionally, in December 2017, the NSW Government introduced a container deposit
scheme, whereby consumers can return empty drink containers for a 10-cent refund. As part of the scheme, manufacturers
have to provide the funds for the refund. Queensland, the Australian Capital Territory and Western Australia currently have
similar schemes, and Tasmania and Victoria have announced their scheme models, which will be coming into effect in late
2022 and 2023 respectively.
MODERN SLAVERY ACT 2018
In November 2018, the Federal Government passed the Modern Slavery Act
2018.
The act, which came into force on 1 January 2019, is a new reporting requirement for larger Australian businesses.
Companies that generate annual consolidated revenue of at least $100.0 million have to report on how they act to mitigate
the risks of modern slavery in their operations and supply chains. The NSW Government has also been considering its own
state-based version of the report, which would require businesses with consolidated annual revenue of at least $50.0
million to report. The NSW Modern Slavery Act 2018 was due to come into force on 1 July 2019, but was delayed for further
consultation on the day it was set to be implemented. The NSW Government has been attempting to introduce necessary
amendments to the NSW Act to establish greater harmonisation with the Commonwealth's Modern Slavery Act 2018. The
NSW Act commenced on 1 January 2022.
The act is expected to have a moderate effect on the Beer Manufacturing industry. In particular, this regulation will likely
affect the two major players and some of the large-scale industry operators, which report annual consolidated revenue of at
least $100.0 million. Additionally, the treatment of labour in upstream industries is relevant to beer manufacturers,
specifically those importing industry products from overseas operations.
Industry The level of industry assistance is Low and the trend is Increasing
Assistance
The Beer Manufacturing industry receives a low level of industry assistance,
and this trend has increased over the past five years.
Tariffs on beer are levied at a rate equivalent to excise, which is charged on domestically produced beers. This largely
equalises the tax treatment of imported and domestically produced beers, and puts imports on an equal price level with
37 IBISWorld.com
domestically produced beers. The highest rate of excise (and therefore tariff) applicable to beers is $52.49 per litre of
alcohol by volume for beers exceeding 3% by volume of alcohol.
The Federal Government encourages production of low-alcohol beer products by providing a tax-free threshold. The first
1.15% of alcohol content is not taxed under the excise tax regime. This drastically reduces excise tax liability for low-
strength beers. As of August 2021, a full-strength beer sold in a keg of 48 litres or more can be taxed as much as $52.49
per litre of alcohol. A keg of 48 litres or more of low-strength beer (alcohol content below 3%) may be taxed as little as
$9.01 per litre of alcohol.
The Federal Government provides some assistance to the industry through tax rebates. Small craft breweries make up the
majority of industry enterprises. These breweries initially received a 60.0% rebate on excise tax paid, up to an annual cap
of $100,000. This was revised in July 2021, where eligible brewers and distillers have since been able to apply for a full
remission of any excise they pay, up to an annual cap of $350,000. Under the 2021-22 Budget, small brewers and distillers
will also benefit from $225.0 million in tax relief, which will support more jobs and investment in the industry. In addition, the
Federal Government provides an R&D tax incentive, which provides industry operators with up to a 43.5% refundable tax
offset for eligible R&D activities. Industry operators can use the incentive to undertake research in areas including
improving fermentation methods and making custom-designed storage.
Industry firms may also receive assistance from state governments. This includes grants and changes to industry
regulation, typically provided to or aimed at small or independent breweries as a means of supporting employment growth.
For example, in February 2018, Pirate Life Brewing received a $2.0 million grant from the SA Government to redevelop its
brewery and bar in Port Adelaide. The brewery redevelopment is expected to create 80 new jobs. In November 2018, the
Queensland Government announced several proposals designed to assist craft brewers. These include changes to the
licensing system for artisanal breweries and brewpubs, along with funding for research and changes to the TAFE system.
In the run-up to the NSW Government election in March 2019, the Coalition Government announced its intention to support
craft brewers through its wider food and beverage manufacturing support plan.
38 IBISWorld.com
Key Statistics
Industry Data
Year ($m) ($m) (Units) (Units) (Units) ($m) ($m) ($m) Demand ($m)
2012-13 5,528 1,382 206 189 3,889 24.7 314 388 5,818
2013-14 5,512 1,604 276 224 3,840 25.9 403 409 5,889
2014-15 5,435 1,680 317 294 4,389 26.9 432 509 5,840
2015-16 5,303 1,803 401 371 4,937 35.4 494 610 5,762
2016-17 4,816 1,662 468 441 5,391 41.1 472 615 5,247
2017-18 4,941 1,695 547 503 5,392 42.1 442 605 5,341
2018-19 5,162 1,781 629 560 6,045 40.2 451 597 5,572
2019-20 4,942 1,819 723 601 5,393 33.7 459 558 5,368
2020-21 5,134 1,689 794 696 5,961 22.3 387 607 5,498
2021-22 4,906 1,639 856 737 6,010 21.5 394 573 5,279
2022-23 5,109 1,707 963 816 6,269 23.4 405 590 5,491
2023-24 5,144 1,790 1,041 871 6,369 26.0 407 602 5,525
2024-25 5,292 1,868 1,127 954 6,474 27.0 415 621 5,680
2025-26 5,358 1,907 1,217 1,022 6,582 27.7 415 638 5,745
2026-27 5,449 1,896 1,311 1,094 6,684 28.5 426 650 5,847
Annual Change
Year (%) (%) (%) (%) (%) (%) (%) (%) Demand (%)
2012-13 12.2 23.0 -12.7 -9.57 -6.56 -0.81 27.8 -2.86 13.0
2013-14 -0.30 16.1 34.0 18.5 -1.26 4.85 28.1 5.51 1.22
2014-15 -1.40 4.70 14.9 31.3 14.3 3.86 7.20 24.4 -0.83
2015-16 -2.44 7.35 26.5 26.2 12.5 31.6 14.5 19.7 -1.33
2016-17 -9.19 -7.85 16.7 18.9 9.19 16.1 -4.56 0.95 -8.94
2017-18 2.58 1.99 16.9 14.1 0.01 2.43 -6.28 -1.66 1.79
2018-19 4.47 5.08 15.0 11.3 12.1 -4.52 1.94 -1.36 4.33
2019-20 -4.26 2.13 14.9 7.32 -10.8 -16.2 1.90 -6.51 -3.67
2020-21 3.87 -7.14 9.82 15.8 10.5 -33.8 -15.8 8.79 2.43
2021-22 -4.43 -2.98 7.80 5.89 0.82 -3.59 1.83 -5.69 -3.99
2022-23 4.13 4.13 12.5 10.7 4.30 8.83 2.89 3.00 4.03
2023-24 0.68 4.89 8.09 6.74 1.59 11.1 0.37 1.98 0.61
2024-25 2.87 4.35 8.26 9.52 1.64 3.84 1.94 3.25 2.81
2025-26 1.23 2.10 7.98 7.12 1.66 2.59 0.07 2.62 1.15
2026-27 1.70 -0.59 7.72 7.04 1.54 2.88 2.69 1.96 1.77
Key Ratios
Imports/ Exports/ Revenue per Wages/ Employees per
IVA/Revenue Demand Revenue Employee Revenue estab.
Year (%) (%) (%) ($'000) (%) (Units) Average Wage ($)
2012-13 25.0 5.40 0.45 1,422 7.02 18.9 99,743
2013-14 29.1 6.84 0.47 1,435 7.43 13.9 106,589
2014-15 30.9 7.39 0.49 1,238 9.37 13.8 116,017
2015-16 34.0 8.58 0.67 1,074 11.5 12.3 123,456
2016-17 34.5 8.99 0.85 893 12.8 11.5 114,135
2017-18 34.3 8.28 0.85 916 12.2 9.86 112,222
2018-19 34.5 8.09 0.78 854 11.6 9.61 98,743
2019-20 36.8 8.56 0.68 916 11.3 7.46 103,486
2020-21 32.9 7.04 0.43 861 11.8 7.51 101,862
2021-22 33.4 7.46 0.44 816 11.7 7.02 95,291
2022-23 33.4 7.38 0.46 815 11.5 6.51 94,098
2023-24 34.8 7.36 0.51 808 11.7 6.12 94,458
2024-25 35.3 7.30 0.51 817 11.7 5.74 95,953
2025-26 35.6 7.22 0.52 814 11.9 5.41 96,855
2026-27 34.8 7.29 0.52 815 11.9 5.10 97,247
Figures are inflation adjusted to 2021-22
39 IBISWorld.com
Additional Resources
Additional Independent Brewers Association
Resources http://www.iba.org.au
Australian Brews News

http://www.brewsnews.com.au
Brewers Association of Australia

http://www.brewers.org.au
Industry Jargon ALCOHOL BY VOLUME (ABV)

A standard measure of how much alcohol is contained in a given volume of an alcoholic beverage.
HOPS
A plant extract from the flower of the hop vine used to impart flavour and bitterness to beer. It is also a natural
preservative.
KEG
A container commonly used to store, transport and serve beer. Keg sizes vary and therefore cannot be used as a
standard unit of measurement.
PREMIUMISATION
The shift in consumer preference towards more expensive premium and craft beers.
PRIVATE-LABEL BEER
Beer produced on contract for an entity that does not itself manufacture beer. This beer is labelled under a brand
owned by the entity.
Glossary BARRIERS TO ENTRY

High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for
new companies to enter an industry.
CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labour.
IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than
$0.333 of capital to $1 of labour; medium is $0.125 to $0.333 of capital to $1 of labour; low is less than $0.125 of
capital for every $1 of labour.
CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e.
year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving
only the 'real' growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using
the Australian Bureau of Statistics' implicit GDP price deflator.
DOMESTIC DEMAND
Spending on industry goods and services within Australia, regardless of their country of origin. It is derived by
adding imports to industry revenue, and then subtracting exports.
EMPLOYMENT
The number of permanent, part-time, temporary and casual employees, working proprietors, partners, managers
and executives within the industry.
ENTERPRISE
A division that is separately managed and keeps management accounts. Each enterprise consists of one or more
establishments that are under common ownership or control.
ESTABLISHMENT
The smallest type of accounting unit within an enterprise, an establishment is a single physical location where
business is conducted or where services or industrial operations are performed. Multiple establishments under
common control make up an enterprise.
EXPORTS
Total value of industry goods and services sold by Australian companies to customers abroad.
IMPORTS
40 IBISWorld.com
Total value of industry goods and services brought in from foreign countries to be sold in Australia.
INDUSTRY CONCENTRATION
An indicator of the dominance of the top four players in an industry. Concentration is considered high if the top
players account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY REVENUE
The total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other
operating income from outside the firm (such as commission income, repair and service income, and rent, leasing
and hiring income); and capital work done by rental or lease. Receipts from interest royalties, dividends and the sale
of fixed tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)

The market value of goods and services produced by the industry minus the cost of goods and services used in
production. IVA is also described as the industry's contribution to GDP, or profit plus wages and depreciation.
INTERNATIONAL TRADE
The level of international trade is determined by ratios of exports to revenue and imports to domestic demand. For
exports/revenue: low is less than 5%; medium is 5% to 20%; and high is more than 20%. Imports/domestic demand:
low is less than 5%; medium is 5% to 35%; and high is more than 35%.
LIFE CYCLE
All industries go through periods of growth, maturity and decline. IBISWorld determines an industry's life cycle by
considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments;
the amount of change the industry's products are undergoing; the rate of technological change; and the level of
customer acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENT
Businesses with no paid employment or payroll, also known as nonemployers. These are mostly set up by self-
employed individuals.
PROFIT
IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s profitability. It is calculated as
revenue minus expenses, excluding interest and tax.
VOLATILITY
The level of volatility is determined by averaging the absolute change in revenue in each of the past five years.
Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%;
and low volatility is less than ±3%.
WAGES
The gross total wages and salaries of all employees in the industry.
41 IBISWorld.com
Call Preparation Questions

Role Specific Sales & Marketing
Questions
How has rising health consciousness affected your sales?
Manufacturers need to be prepared for ongoing declines in per capita alcohol consumption. Firms may benefit from
developing new products to target health-conscious consumers.
How has your business sought to access export markets?
Expanding sales to export markets can improve volume growth.
Strategy & Operations
How does your business respond to input cost fluctuations?
The price of inputs, such as sugar and coarse grains, can fluctuate. Manufacturers with supply agreements in place
can better control costs.
How does your business manage inventory?
Effective inventory management systems can improve efficiency and decrease waste.
Technology
How have you reduced your company's labour requirements through automation?
Firms can reduce wage costs and improve margins by automating production, bottling and packaging.
To what extent does your business use online ordering systems?
Customer orders can be streamlined online, making the process smoother for customers and less labour-intensive
for manufacturers.
Compliance
How do you ensure that your firm meets alcohol labelling requirements?
Manufacturers are required to meet labelling standards, which cover issues such as alcohol by volume (ABV) and
the number of standard drinks.
What trade associations or interest groups does your company work with?
Industry bodies provide a range of support and advocacy services for beer manufacturers.
Finance
How does your company's profitability compare with that of competitors?
Beer manufacturers with a reputation for high-quality products can charge a premium and generate higher margins.
How has price competition affected your profitability?
Industry firms that can reduce operating expenses are better positioned to protect profit margins.
IBISWORLD.COM 42
External Impacts Impact: Per capita alcohol consumption

Questions How have declines in per capita alcohol consumption affected your sales?
Declining per capita alcohol consumption is negatively affecting revenue. However, companies can offer higher
margin premium or craft beers to offset this trend.
Impact: Domestic price of coarse grains

How have fluctuations in coarse grain prices affected your cost structure?
A rise in the price of grains, particularly barley, can increase purchase costs for industry participants. A firm's
profitability depends on its ability to pass higher purchase costs to consumers.
Impact: Demand from pubs, bars and nightclubs

How does demand from pubs, bars and nightclubs affect your sales?
Pubs, bars and nightclubs are key buyers of industry products, selling beer for consumption on-premises. Increased
demand generally boosts industry revenue.
Internal Issues Issue: Market research and understanding

Questions How does your company seek to understand its market?
Beer producers must be aware of changing consumer tastes, and adjust their product mix and marketing to meet
demand.
Issue: Establishment of brand names

What marketing initiatives has your business undertaken to promote your brand portfolio?
Firms that have a high proportion of popular premium beer brands in their portfolio can achieve higher growth rates
due to developing consumer tastes.
Issue: Economies of scale

What opportunities are available to increase the scale of your business?
Firms with large-scale operations and economies of scale can benefit from reduced per-unit production costs,
boosting profit margins.
IBISWORLD.COM 43
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C1212 Beer Manufacturing in Australia Industry Report

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C1212 Beer Manufacturing in Australia Industry Report

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INDUSTRY REPORT C1212

Beer Manufacturing in Australia

Suzy Oo | February 2022

IBISWorld.com 03 9655 3881 info@IBISWorld.com

INDUSTRY AT A GLANCE................................ 7 MAJOR COMPANIES...................................... 30

CALL PREPARATION QUESTIONS............... 42

Recent Russia-Ukraine conflict to benefit local grain growers

Low unemployment increases labour costs and shortages for employers

Rising food and beverage prices are squeezing profit margins

This section last udpated November 01, 2022

About This Industry

Major Players Asahi Holdings

Main Activities The primary activities of this industry are:

Beer manufacturing, excluding non-alcoholic beer

The major products and services in this industry are:

Full-strength traditional beer

RELATED INTERNATIONAL INDUSTRIES

$4.9bn 4.5% -0.2%

2017–2022 2017–2022 POSITIVE IMPACT

Annual Growth Annual Growth Annual Growth

2017–2022 2022–2027 2017–2027

 Drinkers have become increasingly discerning and more

 Internal competition is anticipated to increase over the next

Products & Services Segmentation

Major Players SWOT

High & Decreasing Barriers to Entry

High Customer Class Concentration

High Revenue Growth (2022-2027)

Low Revenue Growth (2017-2022)

Key External Demand from liquor retailing

Demand from pubs, bars and nightclubs

Per capita alcohol consumption

Real household discretionary income

Domestic price of coarse grains

Current Operating conditions in the Beer Manufacturing industry have changed

The COVID-19 lockdown restrictions have diminished demand from pubs,

Greater health awareness, increasing regulation and taxation, public

Heavy discounting in the Liquor Retailing industry has negatively affected

Mergers and acquisitions have defined the Beer Manufacturing industry

Historical Performance Data

PREMIUM AND CRAFT BEER

The premium and craft beer segments are forecast to continue

Supermarkets are forecast to continue pushing into the private-label beer

Internal competition among boutique brewers and the industry's major

players is anticipated to increase over the next five years.

Performance Outlook Data

Products & Markets

Liquor Wholesaling in Australia Paperboard Container Manufacturing in Australia

Liquor Retailing in Australia Glass and Glass Product Manufacturing in Australia

Hotels and Resorts in Australia Water Supply in Australia

2nd Tier 2nd Tier

Supermarkets and Grocery Stores in Australia Grain Growing in Australia

Products & Services

Mainstream full-strength lagers have traditionally dominated the Beer

FULL-STRENGTH TRADITIONAL BEER

Full-strength traditional beer represents the largest share of industry

Premium beer is the second largest product segment.

The low-carbohydrate beer segment includes beers marketed as low-

Demand Several factors determine demand for industry products.

Health consciousness and consumer trends

Beer manufacturers sell to a variety of downstream markets.

The wholesale market reflects beer sold to downstream markets (e.g.

Retailers represent the second largest market segment.

International Trade Exports in this industry are Low and Decreasing