Welcome to BorderPost, Issue 29
August 21, 2015
Did you miss us? No? We completely failed to live up to our commitment of publishing every fortnight and no-one even cared? We'll put it down to everyone being preoccupied with Beervana. Which, in a way, is why we didn't publish last week.
For those who did care, we apologise for our non-appearance last week.
The Commerce Omission
Who remembers this newspaper headline?
Itâ€™s from the Sunday Star Times on December 21 last year. In response to complaints, and following in the footsteps of the ACCC in Australia, our own Commerce Commission looked as though they might be white knights coming to save consumers and small producers from the practice of contractually tying down the beer taps in bars.
As far as BorderPost knows, the Sunday Star Times hasnâ€™t come through with a follow up story on the outcome of the Commissionâ€™s investigation. Which is why BorderPost stepped in and made its first ever OIA request. And it worked and we recently were sent copies of the Commission's findings.
Now when we relayed news of this investigation in BorderPost 14 we werenâ€™t optimistic. And our lack of optimism has been thoroughly vindicated.
So what can we report?
Well, first of all BorderPost would like to commend the two individuals who had the initiative to make complaints to the Commerce Commission. Their names and addresses were redacted from our OIA response, so we have no idea who they were.
At this point we may as well consider the two complaints as if they were one, because even though the rejection letters came from two different Commerce Commission employees, those letters have a lot in common. And by â€œa lot in commonâ€ we mean one identical paragraph after another.
Now at the core of the Commissionâ€™s response are a few assertions, that can be paraphrased as:
- Lion Nathan/Kirin and DB/Heineken compete against each other. So there.
- Independent/Asahi came along and demonstrated that a large foreign-backed beverage conglomerate can compete at buying up taps. So there.
- And last but not least, came this doozy (in these exact words in both cases):
Consumers are increasingly shifting towards purchasing beer at off-licence premises (particularly supermarkets), which are not subject to exclusive supply agreements. Although outside the relevant market, this behaviour may nevertheless provide some competitive constraints on the behaviour of Lion and DB.
Letâ€™s consider what theyâ€™re saying here. People are abandoning the market for tap beer in bars in favour of buying bottled product from off-licences. And this somehow demonstrates that tap contracts are not hurting the competitiveness of the on-premise market.
Apart from the mind boggling logical leap in this statement (â€œpeople are taking an action that arguably demonstrates a failure of this market, so the market must be competitiveâ€) theyâ€™re inadvertently putting their finger on one of the consequences of the way this market works.
That is that a completely new brewing company generally aims to simply make beer, keg it and then sell it. Packaging beer requires investments in the design and printing of labels, the purchase of glassware and, most of all, the extremely risky purchase of a bottle filler. These are commitments and risks that a new brewer often wants to avoid. They typically need to be concentrating on getting their beer right. But because their access to the on-premise tap market is blocked, dozens of up and coming New Zealand breweries have little choice but to accept the risks and challenges involved in packaging their product way before theyâ€™re ready.
And somehow, our Commerce Commission interpret that as a reason to exonerate the big breweries of their brazen anti-competitive behaviour.
Itâ€™s noticeable that the Commission were big on what they consider indicators of a competitive market. E.g.
Frustratingly though, the Commerce Commission didnâ€™t think to compare the New Zealand market with an overseas one that might be similar except for the application of laws against anti-competitive behaviour, and look for similarities and differences and see what those might say about competitiveness here. They need only have gone as far as last weekend's Beervana festival, where, for the second year running, three guest breweries from Oregon were present, including our friends at Pelican. Oregon is a state with similar population, geography and access to brewing ingredients to New Zealand but where tap contracts are outlawed. There the beer of small and independent breweries is more widely drunk than that of the industrial giants, who are barely even present in Portland bars. What Oregonâ€™s example shows us is that New Zealandâ€™s industry is in fact a generation behind where it could and should be. And this can be attributed to the anti-competitive practices of the big breweries.
- â€œA business has substantial market power if it can profitably hold prices above competitive levels or reduce the quality of a good or service for a sustained period of time.â€
- â€œOne hallmark of a competitive market is the extent to which participants within it possess 'market power'.â€
Also happening at Beervana this year was the release by ANZ Bank of their report entitled â€œNew Zealand Craft Beer Industry Insights 2015â€. Itâ€™s packed with numbers, jolly quotes and upward trending bar graphs that paint a rosy picture of the New Zealand brewing industry. The trouble is, itâ€™s not clear what substance is behind the numbers.
For instance thereâ€™s a quote (used twice in whatâ€™s quite a short document) that says â€œThe sample of off premise sales shows the industry is high growth, with NZ Brewed Craft growing at 42% over the last 12 months.â€ And thereâ€™s a footnote that says â€œSample represents approximately 15% of New Zealandâ€™s off premise liquor sales. Sources: Statistics NZ, ANZ analysis Sources: Statistics NZ, news reports, ANZ analysisâ€ [sic].
But thereâ€™s no definition of â€œNZ Brewed Craftâ€, which is enormously problematic given that the meaning of "craft beer" may just be the most contentious topic in the brewing industry.
So hereâ€™s a paraphrasing of that crucial assertion:
â€œa sample that may or not be representative shows that a segment that we havenâ€™t defined has grown from a number that we havenâ€™t given by 42%. But only for off-premise sales.â€
Once again, growth in the sale of packaged product, which might be much less if the market for tap beer was fair, is interpreted as evidence of the health of the industry.
Staying with the NZ report, thereâ€™s another section that tries to illustrate that the local industry is well funded. This assertion seems to be completely based on the amounts raised by Yeastie Boys and Renaissance in their recent crowd-funded capital raising exercises. Now itâ€™s true that those events were triumphs for the breweries involved and hopefully very good for the investors. And itâ€™s true they showed that there are beer consumers whoâ€™d like to be brewery investors. But as those breweriesâ€™ biggest supporters would probably agree, those two capital raising exercises are anything but accurate tests of the market values of these companies, nor of the remaining appetite amongst investors to do more like this. They are outlying results, not the basis for an assertion that New Zealand is ready to fund brewing with far more ready cash than would be the case in other markets.
Now itâ€™s mostly great that the ANZ bank is cheerleading for the local brewing industry like this, but for an organisation whose job it is to judge the viability of businesses with a highly critical eye, this document was remarkably low on precision and academic rigour.
Yes there is a lot in the New Zealand brewing industry to cheer about but itâ€™s an industry with its fair share of problems of which the greatest is anticompetitive behaviour from its heavyweights. But analysts and the Commerce Commission donâ€™t do anyone any favours when they close their eyes to this.
The Commission's responses are here and here.
Pumpkin S02E01 & S02E02
Consumers of high end American Television such as Game Of Thrones and True Detective Season 1 know how important it is to get hold of North American product as soon as possible after itâ€™s released in the US. With each passing year our tolerance for waiting reduces.
Well Pumpkin Beer Season is starting in the US and normally we would be looking at getting our fixes some time shortly before Christmas. But next week two fresh, new season American pumpkin beers will go on the market in New Zealand. One of them â€“ Ballast Point Pumpkin Down â€“ is being released in the US more or less as we speak, with Ballast Pointâ€™s email subscribers notified this morning.
Pumpkin Down is Ballast Pointâ€™s Scotch Ale (called Piper Down) made with roasted pumpkin and the ubiquitous pumpkin pie type spices.
And arriving at the same time is Rogueâ€™s pumpkin beer, Pumpkin Patch Ale, made with pumpkins from their own farm, in an irresistible orange bottle and boasting additions of â€œGinger; Cloves; Vanilla Bean; Cinnamon; Cardamom; Nutmegâ€.
For anyone needing an antidote to the stereotypical pumpkin-pie-spiced beer, there are a couple of Almanac releases in circulation. One is their Heirloom Pumpkin, which is a barrel aged, pumpkin-infused barley wine, and itâ€™s a magnificent sipping beer. And they also make Dark Pumpkin Sour, which sits in their family of intensely sour beers incorporating interesting fruit and vegetables.
Almanac Emperor Norton and Valencia Gold
While Almanac are best known for their mastery of barrel-aged sour beers, they make plenty of more â€œeverydayâ€ beers. In fact their IPA has a strong and well-deserved following. And a couple of new examples of their â€œfresh beer limited releaseâ€ range will reach us next week.
One is Emperor Norton. Itâ€™s described as a dry hopped Belgian Tripel-style ale brewed with apricots. The other is Valencia Gold which is also described as a Belgian-style ale but made with orange blossom honey, fresh Valencia oranges and the new German hop called Mandarina. (This hop was used locally in the recent Pomeroyâ€™s German Pale Ale.)
There wonâ€™t be a lot of either of these, but Valencia Gold is going to be in particularly short supply.
Do you believe in the Session IPA? Itâ€™s kind of a silly question, because there are at least two parts to it :- do you like moderate strength beers hopped like IPAs? And do you think â€œSession IPAâ€ is a good and useful name for such beers? Regardless of your answer to the second question, weâ€™d like to draw the attention of anyone who said yes to the first one to Speakeasyâ€™s Baby Daddy.
Speakeasy have spent a lot of 2015 upgrading their plant. It started with the replacement of their venerable 18 year old brewhouse. But a canning facility has also been part of the upgrade. And Baby Daddy is the first fruit of that new facility to make it to New Zealand. We looks forward to receiving Suds and Pop Gun Pilsner in the months to come.
Like most of the beers above, Baby Daddy is new to us at Beer Without Borders and weâ€™re about a day away from getting our hands on it for the first time. While we wait, weâ€™ll speculate on what Freud would make of a beer called Baby Daddy. What we know for sure is that itâ€™s joining a pretty illustrious family of Daddies (Big Daddy and Double Daddy).
Karl Strauss Mosaic and Ballast Point Grunion
New hop varieties are subject to a certain fashionability. Over the last decade or so a number have gone from being whispered about to helping define famous beers. Citra is an obvious example, but far from the only one. And Mosaic may well be the most fashionable hop of the moment.
So here are two beers to reinforce the impression.
Karl Strauss Mosaic is not completely new to New Zealand. It has appeared a couple of times on tap. Itâ€™s about to make its packaged debut here. This beer, which is variously pitched as a hoppy wheat and session ale (at 5.5%) has been a runaway success for the brewery â€“ picking up big gongs at the likes of the Great American Beer Festival. Rumour has it that this led the brewery to do a lot of forward buying of Mosaic, making themselves unpopular with other San Diego breweries who were unable to get their hands on hops for themselves.
That hasnâ€™t stopped Ballast Point from scoring a supply of Mosaic and Grunion is another 5.5% pale ale built around the hop. It too has appeared on tap once or twice in New Zealand, but is now arriving in bottled form. It seems the brewery are now canning this beer as well, so itâ€™s possible that cans of it will make it here as well.
Both should start appearing in outlets around New Zealand next week.
Too many Beer Previews?
Have we bombarded you with enough previews? We could compose plenty more. Thatâ€™s because weâ€™re hours away from receiving the most carefully selected and yet varied shipment of American beer that ever crossed the equator. Itâ€™s going to be a fun few weeks.
August 26, Hashigo Zake, Wellington
An opportunity to try a range of fresh stock from the Baird Brewery in Japan. Bookings here.
August 28, Hashigo Zake, Wellington
Baird Tap Takeover
With the arrival of a new shipment of beer from Asia's best brewery, Hashigo Zake are taking the opportunity to put six Baird beers on tap at once.
August 28 or 29, Various venues, nationwide
Vanilla and Spice
To celebrate the arrival of the Ballast Point's Wahoo Wheat with Thai Chilli, Ginger and Lime, we're coordinating with a number of venues around New Zealand to put four extraordinary Ballast Point beers that are all heavily spiced:
- Victory at Sea Coffee Vanilla Imperial Porter
- Calm Before The Storm Coffee Vanilla Cream Ale
- Indra Kunindra Curry Stout
- Wahoo Wheat with Thai Chilli, Ginger and Lime
Venues involved so far are Brothers in Auckland, Hashigo Zake in Wellington and The Twisted Hop in Woolston, Christchurch. More details will be released via social media and the venues themselves.
September 2, Hashigo Zake, Wellington
A tasting of beers, including several new releases AND Pipewrench, by Portland's Gigantic Brewery, with a video link to brewer/founder Ben Love. Bookings here.
October 24-25, Wellington
The 5th Pacific Beer Expo
November 7, Dunedin
The 3rd Dunedin Craft Beer & Food Festival at Forsyth Barr Stadium.
Coronado Brewing Blue Bridge Coffee Stout
Ale with coffee added
650 ml bottle
While admittedly probably not the greatest beer to match with the Kraft Dinner weâ€™re eating for tea, itâ€™s still got a great coffee aroma. Rich coffee and coffee grounds coming through on the nose. The coffee flavour is much sweeter than anticipated, with nice vanilla and caramel tones. Itâ€™s got a nice roasted finish.
This beer is perhaps a little thin on mouth feel - we want it to be creamier (yes yes, we know) - and there's a tiny hint of the astringency that lots of coffee beers have (although some black coffee also has that characteristic).
In our house, coffee beers will always be measured against Modern Timesâ€™ Black House, and while maybe not quite meeting those lofty heights, the Blue Bridge comes closer than most. Would drink again.
- The Thirsty Bitches
Moon Dog Jumping The Shark (2013).
Cognac Barrel Aged Truffled Imperial Stout
So, our esteemed editor Dominic is trying to get us drunk, we decide as we pour this dark, syrupy, 15.4% beer. And that feeling doesnâ€™t go away when we taste it, because itâ€™s hugely boozy.
Once you get past the fumes, it coats your tongue with raisiny, port flavours. â€œLicorice?â€ â€œI kind of get mushrooms,â€ â€œmaybe dirt, but in a good wayâ€. Thereâ€™s some bitter chocolate tucked in there too, along with roasted dark malts. As it warms up, the flavours meld to become almost dessert in a glass.
This is not a beer youâ€™re ever going to knock back fast (and you shouldnâ€™t), but as a slow sipper at the end of the night, itâ€™s a winner. A fire, warm slippers and a good book would be great accompaniment. Or, if you havenâ€™t done your mid-winter Christmas yet (slacker) this would go wonders with some kind of figgy pudding.
- The Thirsty Bitches