Australia: Beverage giant Lion acquires craft beer maker Fermentum

On Thursday, September 9, Lion announced it had bought the Byron Bay-founded brewer, which was started in 2008 by Jamie Cook, Brad Rogers and Ross Jurisich and has since grown to claim 1 per cent of Australia’s A$4 billion beer market.

It marks the latest in a long line of major craft beer acquisitions over the past decade, with prominent brands such as Little Creatures, Mountain Goat, 4 Pines and Balter all snapped up by the likes of Lion and Asahi.

However, Mr Jurisich told The Age and The Sydney Morning Herald Australia’s craft beer scene was still thriving, and the country had more independent brewers today than in previous years.

“Craft is a difficult term to nail, but...we’ve actually got a lot more [independent brands]. There are nearly 600 breweries in Australia,” he said. “There’s more and more out there.”

The Stone and Wood brewer’s acquisition may come as a surprise to some industry watchers, given the business’ apparent past opposition to corporate ownership.

The company’s website still tells customers “the difference between us and the big breweries is that we’re not owned by a multinational corporation”, and its founders have previously played key roles as members of the Independent Brewers Association.

Lion’s purchase of Fermentum is understood to be one of the country’s largest-ever craft beer buy-outs, with industry insiders speculating the deal could be worth upwards of A$300 million.

However, it will require the approval of the Australian Competition and Consumer Commission, which has previously taken a critical eye to consolidation in the beer market, forcing Asahi to divest five of its beer and cider brands before its acquisition of CUB was approved.

Fermentum’s main brand is its Stone & Wood pacific ale, but it also produces a number of other Stone & Wood-branded drops alongside recently acquired Melbourne brewer Two Birds, seltzer brand Sunly and Fixation Brewing, among others.

Lion is one of Australia’s largest beer companies and a subsidiary of Japanese giant Kirin. It brews mainstream brands such as XXXX and Tooheys and has an extensive stable of other craft beers including Little Creatures, James Squire and New Zealand brewer Panhead.

Lion Australia managing director James Brindley said the company “didn’t want to mess with” the existing Stone & Wood brand and was focused on building on the legacy that the company’s founders had created.

“We’re buying a business which has a unique culture, a great system and some fabulous brands that the people of Australia love, so we’re going to take it step by step,” he said.

Lion will continue with the company’s plans to build a $50 million new brewery in Murwillumbah in NSW’s Northern Rivers region, a move Mr Cook said was a key factor in deciding to proceed with the acquisition.

Mr Jurisich said the immediate priority for the business was preparing for the summer period, and the company welcomed the NSW state government’s announcement on Thursday that fully vaccinated people would be allowed to attend pubs by the end of October.

“Bring it on,” he said.