AB InBev's deal for craft brewer Pirate Life reignites concerns over 'big beer' takeovers

By Lester Wan contact

- Last updated on GMT

Pirate Life, which carries different beer styles such as stout, IPA, pale ale, golden ale and a mosaic, is the 12th craft brewery acquisition by AB InBev in a year. ©PirateLife
Pirate Life, which carries different beer styles such as stout, IPA, pale ale, golden ale and a mosaic, is the 12th craft brewery acquisition by AB InBev in a year. ©PirateLife
AB InBev's AU$10m deal for South Australian craft brewer Pirate Life has reignited concerns over the number of independents being taken over by global powerhouses.

Pirate Life, founded just in 2015, was crowned best craft brewery at Beer Cartel’s 2017 Australian Craft Beer Survey. It carries a portfolio of different styles of beer including stout, IPA, pale ale, golden ale and a mosaic.

The firm says the acquisition, announced under subsidiary Carlton & United Breweries, has come at the right time.

“The reality is we have run out of capacity at Hindmarsh. With this partnership we’re in a fortunate position to upgrade to a new, bigger brewery while dedicating Hindmarsh to innovate and craft a whole range of new styles to make sure we keep pushing the boundaries and evolving,”​ said Jared Proudfoot, co-founder and chief brewer of Pirate Life.

The investment is said to enable further innovation for the Adelaide-based craft brewers. Apart from a new brewing facility, Pirate Life’s current brewery in Hindmarsh will be dedicated to creating new beers, including “sours, seasonal and barrel-aged products”.

This latest acquisition would make it AB InBev’s 12th acquisition of craft breweries in the past year.

Acquisitions & concerns

The Independent Brewers Association (IBA) of Australia said the latest sale was "disappointing".

“While every sale of an independent brewery to big beer is disappointing, we believe that each of them further underscores the impact the independent brewing industry is having on the traditional beer market in Australia and overseas,” ​it said in a statement.

This opinion was supported by the recent Beer Cartel survey that showed beer drinkers overwhelmingly preferred to support independent breweries over multi-national ones.

Pirate Life is the second Australian craft brewery to be acquired by AB InBev in the past two months. AB InBev's venture capital “disruption” branch ZX ventures purchased 4 Pines in September.

In June it was announced that ZX Ventures had purchased a minority investment stake in the website RateBeer, back in October 2016.

This prompted concerns and reactions from beer-lovers and the craft beer community that it could threaten the site’s independence, with the owner of Dogfish Head Craft Brewery requesting his beers be removed from the site.

There are more than 430 other Australian independent brewing businesses, according to the IBA.

“We will be doing all we can to help them take advantage of the opportunities created by ownership changes, such as launching an independence seal in the near future,” ​it said.

AB InBev’s broad portfolio, including under its subsidiaries, includes popular brands such as Budweiser, Corona, Stella Artois, Hoegaarden and Victoria Bitter.

More trouble in beer paradise?

Separately, AB InBev has recently been accused by the European Commission for making Belgian consumers pay too much for beer​, and for alleged malpractice such as the changing of labels and limiting of sales.

The EC opened anti-trust proceedings against AB InBev in June last year and sent a statement of objections to the company on Nov 30 this year.

“The European Commission has informed AB InBev of its preliminary view that the company has abused its dominant position on the Belgian beer market, by hindering cheaper imports of its Jupiler and Leffe beers from the Netherlands and France into Belgium,” ​the opening statement said.

In response, AB InBev released its own statement including: “Today’s announcement is a procedural step. A Statement of Objections is not a final decision on the outcome of the case.”

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