Beer’s parallel universe

Growth of the premium beer market, a corresponding explosion of contract brewing of international brands in Australia and a strong Australian dollar, set the scene for the unprecedented volumes of parallel importing we’re now enjoying.

This is the practice where large retailers and independent wholesalers bypass the official importers, or contract brewers, and import popular brands direct. They then sell the genuine article that they’ve imported alongside the locally brewed facsimile. It’s a kind of arbitrage, exploiting international variations in wholesale prices.

It’d be a highly profitable venture if only one party did it. But as it’s on for young and old, parallel importing tends to drag down prices for everyone in the distribution chain. Drinkers will never complain about the practice. But you can be sure there’s much tut-tutting at Lion Nathan and Foster’s as their locally brewed Becks and Stella Artois battle it out with the genuine articles imported by third parties.

While drinkers benefit from greater choice and lower prices, there is a trade-off between authenticity and freshness. This is because many parallel imports travel the world for some time before arriving in Australia. And with beer, freshness is crucial. A travel-weary Becks from Germany, for example, may be no match for its fresh facsimile brewed in Sydney.

Copyright © Chris Shanahan 2010