Australia: Lion to permanently shut West End Brewery in Adelaide

Australia's second-largest beer group, Lion, will permanently shut the 160-year-old West End Brewery in Adelaide in mid-2021, leaving the Japanese-owned company with just two large beer production sites in Sydney and Brisbane, The Australian Financial Review reported on October 14.

Lion supply chain and technical director Ian Roberts said on October 14 West End Brewery had been operating at about 50 per cent capacity and it was no longer viable to keep it running.

The brewery, in the inner western suburb of Thebarton in Adelaide, will close in June next year, with 94 workers to lose their jobs. It makes West End, Southwark Bitter and Hahn SuperDry.

Lion said the Australian beer market has been in long-term decline for the past decade as Australian drinkers choose other beverages. Beer consumption per capita had dropped by about 20 per cent over this time.

The big hit to draught beer consumption from COVID-19 closures and restrictions had also been a factor in hastening the closure, he said.

Mr Roberts said from mid-2021 beer will be shipped in to South Australia from two other Lion breweries, the Tooheys operations at Lidcombe in Sydney's west and the XXXX brewery at Milton in Brisbane.

He acknowledged South Australia was a parochial market, but said the West End brand would be brewed with the same recipe and taste at other Lion sites.

"It will be a different kitchen," Mr Roberts said.

"It is a sad day for the brewery. It is a sad day for the West End brand."

About 40 people will remain employed by Lion in South Australia, in sales and sponsorship roles.

West End is a highly prominent brand in South Australia. It sponsors the South Australian Sheffield Shield cricket team known as the Redbacks, and the Adelaide Strikers in cricket's Big Bash 20-over national competition.

Coopers Brewery, which operates from the western Adelaide suburb of Regency Park and is owned by 170 shareholders who are all part of the extended Cooper family, has a bigger workforce than the West End brewery. It employs 140 staff at its brewery.

Coopers has a market share of about 20 per cent in its home state of South Australia and has been making some headway on the national stage, where its total market share is about 5 per cent. It is set to reinforce its local roots in the state with the departure of West End Brewery.

Coopers managing director Tim Cooper said the West End closure "represents the loss to our state of an iconic institution with a long and proud history".

Dr Cooper said the pandemic and closures in the hospitality industry had meant 2020 was an extremely tough year in the beer industry generally.

But the company was still expanding and diversifying its portfolio of products. It invested $68 million on a new maltings plant in 2017 at Regency Park.

Lion in May snared the Australian rights to the hugely successful White Claw brand, which pioneered the hard seltzer segment in the US, and built it into a A$2.5 billion category based on perceptions it is a "healthy alcohol" with lower calories and lower sugar.

Mainstream beer brands have been on the slide for decades in Australia, with craft beer brands gaining market share.

Lion's main rival on the national stage is Carlton & United Breweries, now owned by Japan's Asahi Group. CUB is the market leader in Australia, with brands including Victoria Bitter and Carlton Draught and a market share of about 48 per cent.

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