The craft: new frontiers for Australian micro-brewing

Nobody is short a beer in Australia. As the summer heats up and five o’clock nears, anyone reaching for a refreshing beverage is blessed with a seemingly infinite flow of choices in brand, flavour and style. 

The explosion in popularity of craft beer – and sometimes mass-produced beer dressed as such – comes as, somewhat counterintuitively, beer consumption in Australia remains flat at around 65-year lows.

“It's a very large market [in Asia] but there's a lot of competition.” – Tony Xerri

For brewer Tony Xerri, co-founder of boutique brand Prickly Moses, this means a market frothing with competition.

“Everyone's just thinking ‘Oh, just make a beer and start selling it’,” he says of his steady stream of contemporaries. “That does make the market very competitive.”

“They think they're going to sell beer so they just come up with a name. I think there's even a Bob Hawke's lager come out not long ago.”

Hawke’s Brewing Co bills itself as the story of “three Aussie blokes who had a dream to run an Australian beer company” – a dream shared by roughly 420 other craft brewers in the country, according to the Independent Brewers Association. It’s a staggering hike from the 30 which populated the sector in just 2006.

For brands like Prickly Moses, it makes sense to look for other growth streams – and the potential in the Asia Pacific, right on Australia’s doorstep, is huge. 

Far cry

Otway Estate Winery and Brewery –producer of Prickly Moses – is a long way from Dalyan, a region in the Ortaca district in northern China. Xerri says the group has begun to sell a “small amount” of beer in the area, testing the waters for the future.

It’s a huge market for a company which still bottles its product by hand, according to Prickly Moses head brewer Luke Scott.

“Yeah, it's a labour of love,” he admits. “Every bottle has four fingerprints on it. All hand capped and hand bottled.”

Xerri sees the scope of opportunity in Asia but understands the challenge.

“It's a very large market over there but then once again there's a lot of competition,” he says. “From a lot of other countries and locally.”

Originally a winery, Otway Estate has since expanded into a brewery, function centre and was part of a consortium which recently bought a hotel on the Bellarine Peninsula.  

Situated in Victoria’s picturesque Otways rainforest region, Prickly Moses has now been brewing for 10 years. Sales of craft beer are increasing year-on-year by between 15 and 20 per cent. The sector in Australia says it now generates $A740 million in economic output, employing close to 2,500 people.

Nearly two-thirds of the sector operates out of regional Australia. Victoria and New South Wales-based businesses dominate the market, with 60 per cent of the share between them.

“There's growth in the craft beer market but then there's huge growth in the in the competition in the market,” Xerri says.  

The growth is catching the eye of the markets bigger players, who were this year ejected from the aforementioned Independent Brewers group.

Australian taste, in all senses of the word, continues to support microbreweries. Research from Beer Cartel shows 64 per cent of drinkers consider ownership of a beer a factor in purchase, with 99 per cent happy to buy from independent local breweries. Just 23 per cent are happy to buy from large multi-nationals.


Announced in September, Pedal & Crank (Aussie rhyming slang for ‘bank’) is a Prickly Moses beer produced in partnership with ANZ.

Given banks aren’t normally in the business of beer, Xerri smiles when asked to recount the story of how it all came about.

“Back in March ANZ set up a market day at the base of its Docklands building,” he says. “We were fortunate to be one of the producers to be invited along to that.”

“There were some drinks afterwards I believe for some of the ANZ staff - one of which was the actual CEO, Shayne Elliott.”

“[Fellow founder and Otway Estates director Andrew Noseda] got chatting to Shayne and he said ‘Oh, we should have a beer for our corporate functions’.”

“Of course Andrew ‘Yeah, that's something we can certainly help you with’.”

The beers – one a “corporate responsible light,” Xerri says with a grin – are full flavoured ‘German golden ales”.  

From the wilderness

According to The Financial Times, the size of China’s total beer market is massive and now worth $70 billion a year. This is despite a 5 per cent year-on-year drop as alternatives such as wine grow in popularity. In better news for exporters, imported beer consumption in the home rose 40 per cent in 2016.

Having returned from a recently to the region Xerri is confident the opportunity is growing.

“There seems to be a few other local craft breweries setting up in Hong Kong from what I learned and also to a lesser degree in Shanghai,” he says.

But the key to cracking the market is ultimately brand awareness, Xerri says.

“In Shanghai they're still very heavily into their local beers,” he says. “That's probably a big price-point based… they drink it because it's light, easy to drink and very cheap.”  

For now, Xerri says the business remains focussed on its local business – “just trying to use the local venues” to the best of its ability – but says Asia is a part of Otway Estate’s plan to “keep expanding”.

“We’re always looking at further export opportunities,” he says.

It’s always five o’clock somewhere, after all.

Shane White is senior production editor at bluenotes

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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