Tuatara Talks Tough

There is no doubt that the overall craft beer market in New Zealand is growing. That argument is supported by official figures from the Brewer’s Guild, our own sales and distribution numbers, and what we see every day in bars, restaurants, bottle stores and supermarkets around the country. In many ways, the craft beer scene is the strongest it has been in modern history.

However, Tuatara Director Sean Murrie is concerned the combination of a flat economy and the perceived ‘threat’ of craft beer could be provoking a backlash from the big breweries. Here are his comments:

“There are a growing number of bars and other outlets who have decided that diversifying into offering craft beer products is the way to go. For a while, the big brewers allowed a bit of latitude. Maybe they would allow a single tap (near the back) or some bottles (at the bottom of the fridge). In many cases, the subsequent sales of craft products were much higher than they had expected. Craft beer has become hot property with consumers and I’m sure the issue is discussed at every board meeting of the big boys.

As a result, their policy seems to have changed – in many cases to a zero-tolerance policy for any other beers on site. Some publicans have had to reluctantly accept, some have successfully fought and won, while others are quietly waiting for their contracts to expire. It is well known in the industry that there have been some pretty big arguments all over the country, including in the key market of Auckland. They certainly were not all about Tuatara but a fair number of them have been.

In my opinion, we are at a bit of a tipping point. The use of strong, binding contracts is quite heavy handed and new owners are seriously considering forgoing the money and support at start-up in order to ensure they can serve the range of beers that they want over the first couple of years. That is a really big deal to forsake those early advantages ‘just’ for beer.

The large breweries will have to change their strategy at some stage – either by being more flexible about ‘ties’, producing better beer themselves or, more likely, acquiring a brewery to do that for them. They are certainly struggling to figure out how to engage with the craft sector at the moment. In some ways the Australian and American markets are ahead of us in this area though in neither case are they particularly good models for craft beer fans.

At Tuatara, we love seeing our taps and bottles next to other craft products. It is the way we think the market should operate – offering choice so that people can pick their favourites. Some days it might be us, some days it might one of our friends in another brewery. Obviously we hope it is us quite often but ultimately we are all trying to satisfy the customer. Those customers should look for opportunities to support outlets which have given up the early monetary advantages of the ‘tie’ in order to have the freedom to offer a proper selection of beer for years to come.”

Cheers from the team at Tuatara