Lion Swallows Small Critters

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It's no secret mainstream beer consumption is heading south at the same time as craft- and premium-beer segments continue to grow. Little surprise, then, that Lion recently pounced on a bunch of brands including Guinness, Stella Artois, Little Creatures and White Rabbit.

The Japanese-owned Lion is Australia's second-largest brewer, producing mainstream beer brands such as Tooheys, XXXX, Swan and the craft offshoot James Squire. The rights to brew Guinness and Stella Artois locally have been held by rival Foster's for decades, and their transfer to the Lion stable takes on added significance with the takeover bid for Little World Beverages, which produces Little Creatures, White Rabbit and Pipsqueak Cider.

Lion's premium-craft portfolio suddenly got a whole lot fatter.

Lion already owns about 36 per cent of LWB and the buyout will give them control of breweries in Fremantle and Healesville, plus a healthy slice of the craft-beer market. Another Little Creatures brewery is under construction in Geelong and is due to start production in about April next year, which may have been the tipping point for Lion's bid, as they have no Victorian brewing facilities.

''Lion chose the timing and for shareholders it was a good offer and a good process,'' a director of LWB, Howard Cearns, says.

''Who knows what is the right time [to sell] but weighing it all up it didn't feel wrong.

''I believe Lion has a commitment to preserve the product standards, if not even build upon the consistency. [They recognise] that the people and culture that exists are very important to the company's success.

''No doubt it's [a] changing of the guard but [there are] plenty of great people to make sure the story continues.''

LWB also has three hospitality venues, in Fremantle, Healesville and Melbourne. It will be interesting to watch their progress under the new regime - major Australian breweries have shown little enthusiasm to run pubs and bars in recent times.

Cearns says he and fellow Little Creatures founder, Nic Trimboli, have ''no regrets'' about accepting Lion's offer but ''certainly some tinges of sadness to be letting go. Also a sense of satisfaction among founders [about] what we created and contributed to the growth of craft in this country.''

Another intriguing piece of the LWB buyout involves the 20 per cent share they hold in Byron Bay craft brewer Stone & Wood. The latter's head brewer and co-owner, Brad Rogers, says the Lion bid had come ''out of the blue'' and he is unclear how the big brewery's part-ownership will affect Stone & Wood.

The changes also added significance to the pair of limited-edition brews that arrived on my desk from Little Creatures and the Lion-owned Malt Shovel Brewery. In line with recent Little Creatures Single Batch brews, Day of the Long Shadow is a complex, high-alcohol ale - something with higher production costs seen more as a marketing tool than profit-maker. It's just the sort of thing an accountant sitting in a big brewery head office might decide isn't worth the investment.

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