Don’t cry for me

In one fell swoop, Lion has acquired three well-known indie breweries. Does this alleged 180 by Fermentum risk further eroding the integrity of independent beer?

by | Sep 10, 2021

Stone & Wood, one of the stalwarts of the indie beer movement, is now owned by a multinational brewery. The acquisition raises questions about the impact on consumer sentiment, the erosion of the integrity of ‘indie’ and the flow-on effects to independent breweries in Australia.


The Australian craft beer community is in shock.

Fermentum, parent company of Stone & Wood Brewing Co (S&W), has been acquired by Australian beverage company Lion, subject to approval by the ACCC. Lion itself is a subsidiary of Japanese beverage giant Kirin.

The atmosphere in some circles is ‘salty’. There are strong implications of hypocrisy on behalf of Fermentum’s owners, one of whom only stepped down as chair of the Independent Brewers Association in 2020. Various instances where they’ve declared their independence, asked passionate supporters to “have faith” in the wake of other buy-outs and even criticised justifications by others who’ve chosen to sell, have been highlighted on social media.

Acquisitions of independent breweries by Lion, CUB and others is nothing new. S&W’s long and fierce commitment to independence makes the sale a difficult pill to swallow, but a trifecta that includes Melbourne brewery Two Birds, which was acquired by Fermentum in January 2021, and the hop-centric brand, Fixation, which was founded in 2015 by S&W, makes it an even deeper cut.

Head them off at the pass

Stone & Wood has been a beacon of success for independent beer. Pacific Ale is one of the most successful craft beers in Australia and is frequently lauded for being a uniquely Australian style.

But despite healthy growth, capacity has been a limiting factor. In April this year they announced plans for a new 200 hectolitre brewhouse estimated at $50 million and there have been rumblings of a Fermentum IPO.

Big beer has always fought to maintain market share, but questions frequently arise about, how ethical, and even how legal, some practices are. Evidence recently emerged of a policy of excluding S&W from taps in Lion contracted venues. The specific targeting highlights the threat Lion perceived from S&W. Much like previous investigations, the suggestion that the practice could be unfair was dismissed by the ACCC.

Little Creatures, Furphy and James Squire, are some of the better-known craft beer brands in Lion’s portfolio, but are arguably less parochial, than those of Australia’s other big brewer CUB. Both are seeking variety in their portfolio of craft beer, but CUB’s strategy with Balter, 4 Pines, Pirate Life and Mountain Goat, seems to include an element of acquiring brands that also have higher appeal in their respective home states.

Fermentum’s acquisition seems a logical one for Lion. Perhaps, even preferable. In its handling of the Little Creatures brand, the company has shown some understanding of the intricacies of the craft beer market. Unlike its competitor, CUB, whose “big hands” lacked the finesse to manage such a niche product and all but destroyed the Matilda Bay brand. It’s only now been revived, perhaps somewhat tokenistically, and is unlikely to ever again be nationally distributed in any form other than Yak Ales.

Although, and it’s still early days, much has been made of the invisible impact of CUB’s acquisition of Balter. With a contract sometimes described as ‘watertight’, to date, Balter appears to have kept the beer, and the brewery’s overall strategy, free from corporate meddling.

Crush the competition

The disappointment expressed on social media is interspersed with a sentiment among some that the sale validates a waning appetite for independence.

I spoke about the erosion of integrity in my Local Luva piece. Whether intentional or not, Lion’s acquisition of Fermentum will weaken the value of independence to consumers. If even the most strident independent brewery can be bought, anyone can. Why make an impassioned choice, if you’re only going to be disappointed down the track.

One of the encouraging observations of the last two years is how attuned consumers have become to the economic impact of the global pandemic. It’s influenced many to buy local and as a result, the indie beer industry, whilst by no means healthy, is not on its knees as predicted.

The impact of the global pandemic cannot be underestimated. Thankfully, many breweries have survived to this point, but whenever Covid-19 is brought under control, it will not be the end. Its effects on small, independent breweries will last for many years to come.

The sale of Fermentum has come at a critical time. A time when small brewers are relying on support from their local communities to survive. It’s imperative that customers trust and believe that their spending is contributing to the survival of local business.

2020 GABS Hottest 100 craft beers top three

Moving on

2017 saw the sale of 4 Pines, Feral and Pirate Life in the space of three months and in 2019, Green Beacon and Balter were sold. Also in 2019, Asahi acquired CUB, lock stock and barrel.

But, there’s been a feeling of quiet amongst indie supporters. CUB appeared to have completed their set and how many brands can the multinationals have before they’re just cannibalizing their own market share?

Fermentum’s sale took many by surprise.

Today, the passion for Indie beer is palpable. However, as with most announcements like this, the conversation quietens quickly. There’s a futility to the frustration, anger and disbelief, that ultimately ends with a thought along the lines of, “well, that’s the reality of running a business, I guess.”

I found comfort in one comment on social media. “There’s still 600-odd Indies to buy beer from.” said one thoughtful and practical contributor.

This is true. Those of us that care deeply about independent beer are fortunate to have so many options. It won’t be difficult to choose an indie beer in place of a Fermentum brand.

But it will always come with a little sting. A feeling of foolishness in believing that money can’t buy everything, that our passion was exploited until it was no longer necessary and even, am I a fool to continue choosing a beer just because it’s independently owned.

My defence of S&W in the past has been ardent. I’ve been quick to point out their pioneering of Australian beer and a legacy that shouldn’t be ignored or dismissed. These things cannot be erased, but it’s going to be a struggle to push that barrow now.


A final thought

Yesterday was ‘RU OK?’ day. Passionate advocacy for indie beer is admirable, but it should not come at the expense of anyone’s mental health. If you have a mate that’s fired up by these events, check-in with them and ask if they’re OK.

A picture of many Australian craft beers
Categories: Craft Beer

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