27/06/2012 - 11:18

Brewer’s sale met with sounds of silence

27/06/2012 - 11:18

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Does WA care about its iconic brands, or does pragmatism rule out west?

Does WA care about its iconic brands, or does pragmatism rule out west?

THE furore over the sale of Little Creatures brewery was to be expected.

Angry unionists marching on parliament, bringing traffic to a standstill with placards reading ‘The State with No Beer’ and ‘Will Kirin Keep WA Workers, Don’t Export Jobs to Japan’.

It would be no surprise to see that the West Aussie Brewers Confederation was along for the ride, not at the epicentre of trouble, but fanning the flames. It has been at odds with the United Brewers, Maltsters and Taste Testers Union for years; but as membership of both has dwindled, they have been drawn into an alliance seeking protectionist policies to stop the leakage of local beverage manufacturers east.

They have been bemoaning the loss of historic Western Australian businesses for years.

“WA grog should be made by WA companies,” a statement by WABC said.

But it was not just brewery workers and dozens of affiliated unionists who downed tools on various unrelated worksites to protest the sale of their favourite beverage company to overseas investors.

Thousands of office workers joined the march, their feet and calls symbolically representing the hard evidence revealed by recent surveys – iconic WA brands should not be sold to overseas companies.

It was a pity to see the angry mob burn the pubs to the ground, with the founders of the brand forced to leave the state in a hurry at risk of being drowned in a vat of their former brew.

The scenario described above is fiction, of course – so how come none of that really happened? Not even the slightest whimper?

When any Aussie icon gets sold overseas it is like some foreign enemy has put their hand inside each and every Australian body and ripped out part of their soul. There is outcry nationwide.

So why the silence over the Little Creatures sale? Is it because WA’s brands don’t matter so much? Is it because Little Creatures is so new?

Is it because this state, shaped by booms and busts, is less emotionally attached to something that is a good idea at the time. 

Or is it that this state has never relied on subsidised manufacturing and the protection of special interests to make a buck. We don’t see the sale of a famous brand as the nail in the coffin of a once-flourishing sector.

Instead we’d rather celebrate the entrepreneurial success of a handful business people who backed their idea with a bit of seed capital and ended up creating a business worth $380 million in 12 years.

Little Creatures, which was the main brand owned by the listed entity Little World, is an outstanding story of success, not just because of the wealth created but the fact that the people behind it have done the same thing twice over three decades when other mimics have failed.

We are not bemoaning the failure of Australia to hold on to something; we recognise the achievement. The truth is we all know that the new owners are less than likely to make a long-term success of their purchase, but that is their choice.

Most of the business leaders I chatted to about this sale wondered when the guys behind it, or some of the next generation that have been their senior management, might set up shop and do it all over again.

They’ve used their talents to create something and sold it at a fair price to the highest bidder.

Let’s hope Lion isn’t too successful with its new purchase. 

We’d hate to see a federal treasurer play the xenophobic card about foreign owners taking beer profits overseas – using that moment to announce a Brewing Super Profits Tax.

After all, it’s the nation’s beer isn’t it?

Hope for homeless

I SPENT a night last week at the WACA Ground doing the CEO Sleepout, which is run by the St Vincent de Paul Society to raise funds for the homeless.

It was very successful, not just as a fund-raising exercise but also to pull 100-plus CEOs and give them a couple of hours of pre-sleep education about homelessness.

The people Vinnies helps are from all walks of life with all sorts of problems – but the point is made that many of these people can be helped by intervention.

One thing that came up a couple of times was the issue of housing affordability.

There is no doubt that there will always be a level of homelessness because certain individual circumstances will preclude any other form of living, at least for the short term.

There are those whose homelessness is not about having the money for a home.

Nevertheless, housing is terribly expensive in WA and that adds to the homelessness problem, not just by pricing out the marginal but also removing vacant dwellings and other structures from the market that might otherwise provide legitimate temporary shelter.

It is easy to blame the housing affordability issue on the boom, but that is not the only factor.

House prices rose rapidly after 2000, long before the boom was under way in any sense that was noticeable here. Partly that was loose credit, partly that was improving employment conditions but, importantly, there was a restriction on the supply of land.

By 2003, the property sector was screaming about approvals for land rezoning piling up as the state government shifted its policy settings towards infill, shifting costs onto developers, sharing in development profits and stricter environmental standards. Partly this was a result of new land development being sought in more difficult areas, such as lower-lying land, but much of it was ideology. 

Sprawl was bad. Of course, the new policies didn’t stop sprawl. It was simply delayed, creating a bottleneck just when more land was needed to cope with rising demand. 

In the end it simply made sprawl more expensive, often making it an investors’ paradise; especially for speculators who could more easily get credit and onsell property for a fast profit – competing with new home others and others who needed it but found it harder to get loans, especially as prices went up.

Mandurah is a classic example. Thousands of homeowners, including speculators, were caught when the music stopped.

Society gains nothing from having high house prices. It is not a store of wealth for anyone but those who bought cheaply – usually just one generation. Even those people are having trouble downsizing because of the cost of smaller houses and the trouble in the property market created by the bubble we had.

While I admit there might be an environmental cost to sprawl, the reality is that Perth’s coastal plain is an ideal location for sprawl and comes at a minimal environmental cost. It has its special features but it is hardly the Amazon Basin. 

Trying to create London or Paris is laudable but won’t work until Perth has reached its true limits, not those artificially imposed by boundaries that homeowners can’t see.

While the current high prices present a problem for those wanting to come here or new homebuyers, they are also hard to combat by any means other than keeping them stagnant for as long as possible – unless governments are prepared to impoverish their constituents whose loans were taken when prices were peaking.

In a few years, if prices are stable, we might have a market that is more affordable and accessible to all people – taking the pressure off one group of people that might otherwise really be homeless.

• mark.pownall@wabn.com.au

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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