Changes brewing as sector charts growth

There are more than 120 breweries in Western Australia, representing 20 per cent of the national sector and generating $650 million for the state’s economy. 

In recognition of the industry’s importance, the state government launched WA’s first craft beer strategy in August to guide the next 10 years of growth. 

Under the strategy, the government unveiled a target to triple the volume of craft beer production from the 2023 baseline – a figure which is yet to be calculated – by 2034. 

Another goal was to enhance vertical integration of the craft beer value chain to share inputs across the supply chain using data. 

The Department of Primary Industries and Regional Development engaged with the WA Brewers Association, Independent Brewers Association and South West Brewers Alliance to design the strategy, but there are several brewers who are not convinced of the 10-year plan’s value. 

In conversation with Business News, Beerfarm director Ian Atkins said he was yet to see a strategy that met industry expectations. 

“There’s absolutely no strategy from government to help this industry and, in fact, I’ll go a step further and say it’s actually doing damage to the industry,” he said. 

“I haven’t seen a strategy. There’s no substance to the tagline. 

“It’s for political gain, for someone to come around and talk about beer and to garnish votes from consumers, in my opinion.” 

Mr Atkins said the lack of government support was reflected within local council regulations and the complexity of development application processes. 

“The government needs to engage with industry, with mid-tier breweries, to understand what’s required,” Mr Atkins said. 

“I don’t want to give the government a major bashing, but they definitely need a wake-up call. 

“You’ve got lots of businesses that have gone into voluntary administration post-COVID. 

“You can see the stress levels … there’s a lot of people hurting out there. 

“It’s time for government to wrap some policy around their headlines.” 

Running with Thieves head brewer Paul Gasmier says the new beer strategy would need to be flexible to meet changing industry needs. Photo: Daniel De Giosa

Running with Thieves head brewer Paul Gasmier said he supported the beer strategy, but agreed with Mr Atkins that it would need to engage with companies on the ground to be truly effective. 

“Overall, I think the state government’s 10-year craft beer strategy is a positive step for the industry,” Mr Gasmier said.

“It demonstrates a recognition of the growing importance of craft beer, both culturally and economically, within the broader beverage landscape … however, the long-term success of this strategy will depend on how well it addresses the real needs of brewers on the ground. 

“The craft beer industry is diverse, and while a one-size-fits-all approach might not always work, a strategy that encourages flexibility and adapts to the evolving landscape is crucial.” 

WA Brewers Association chair and Indian Ocean Brewing Co assistant brewer Mike Morgan told Business News the government worked closely with the three aforementioned brewing alliances to develop the strategy. 

“We’ve all had equal input on the strategy and how it’ll evolve,” Mr Morgan said. 

When asked about the scepticism emerging around the effectiveness of the strategy, Mr Morgan said research was still being conducted into specific initiatives it would deliver. 

“[The scepticism] is probably just misconception as to what and where the stress of the strategy is, [but] it’s not even in the implementation phase yet,” he said. 

“There’s maybe uncertainty, like, ‘what’s the strategy doing for us so far?’ 

“Well, right now, it’s not technically doing anything yet. 

“We have a framework for the strategy that’s been pulled together in the document we released at the brewers’ conference in August. 

"That outlines key areas of what we’re looking to build on in Western Australian beer over the next five to 10 years. 

“Now we’re starting to get into the discovery phases.” 

Mr Morgan said one example of this was calculating the volume of beer being produced and determining what the 2023 baseline was. 

“We say we want to grow the volume of beer in Western Australia, but what’s the current volumes of beer?” he said. 

“And whilst we make beer, we also have downstream sectors of tourism and logistics and suppliers and other companies [that are] all part of the strategy too. 

“We have regular meetings and consultants that we’re using to pull it all together.” 

Mr Morgan said the state government would recruit a project manager soon to lead the implementation of the 10-year strategy. 

Nail Brewing's John Stallwood (left) and Beerfarm's Ian Atkins. Photo: Michael O'Brien

Rocky Ridge managing director Hamish Coates said the government needed to ensure all levels of government supported the strategy.

“We’re at about 1.5 million litres. 

“Essentially, we’re being forced to justify our existence when we have standing approvals for land use. 

“It’s an absolute nightmare, as we’re engaged in a philosophical argument, not one based on facts or written codes [or] legislation.” 

Mr Coates told Business News the government’s perception of the brewing sector was problematic. 

“I think there’s further adoption required from both state and local governments of viewing brewing as a viable long-term industry,” he said. 

“It’s still viewed as this little boutique thing and it’s really not anymore. 

“It would be nice if 2025 saw a little bit of a change in attitude towards brewing from regulatory authorities, but it’s going to be a long, hard slog unfortunately. 

“It’s incredibly frustrating and, if you want negatives about what’s happening in the industry at the moment, it’s 100 per cent to do with red tape and bureaucracy and regulation that doesn’t need to be there.” 

City of Busselton declined to comment.

Metricup-based brewery Beerfarm has been facing similar struggles with the City of Busselton limiting its growth, according to Mr Atkins, who said its South West facilities faced restrictions on production capacity. 

“[W]e’ve been having a few issues around expanding capability, which has actually been stopped by DPIRD [Department of Primary Industries and Development], DWER [Department of Water and Environmental Regulation] and local councils,” he said. 

“Not only are we facing market issues around excise and all these other things, but we have a restriction on how much we can actually produce. 

“We’ve been fighting with [the local council] to try to grow and increase production and … they’ve just made it very challenging.” 

This was a contributing factor to Beerfarm’s decision to purchase Coca-Cola Europacific Partners’ equity stake in Feral Brewing Company’s production facilities in Bassendean. 

Beerfarm would continue to produce a range of products at its Metricup facilities, but it is understood the brewer’s recent purchase would enable it to triple production output while maintaining Feral’s production needs. 

Former Feral owner CCEP reached two binding agreements for the sale of the brand and its facilities in May last year. 

While Beerfarm bought the Bassendean facilities, the Feral Brewing business itself was jointly purchased by Nail Brewing and a consortium of investors. 

Despite the change in ownership, the brewer continues to operate as an independent company. 

Mr Atkins said the acquisition would help Beerfarm to achieve its growth strategy. 

“We’ve always wanted growth and haven’t been able to achieve it, so this ties in very nicely with that,” he said. 

“We’re continuing with our growth not only from a volume-growth perspective of products, but also in terms of delivering venues and production facilities in other states. 

“We’ve just had a development application approved in New South Wales, which has taken a long time, but now we can … start to look at how to replicate what we’ve done in Metricup across into NSW.

“To get the production up and running first is the key initiative … [planned] for this year, with the venue attached to it to open in 2026.” 

Nail Brewing owner John Stallwood says beer market conditions are tough. Photo: Michael O’Brien

Nail Brewing owner and head brewer John Stallwood said the acquisition of Feral by the investor group was a logical deal. 

“Feral is a staple of the WA craft scene, with a rich history and a loyal base of drinkers,” he said. 

“Feral and Nail have always been there for each other, and it was time for me to do what I could to give Feral the brightest future possible. 

“There were all sorts of benefits to the time under CCEP, but fundamentally the Feral ethos is one that works best as an independent brewery.” 

Mr Stallwood said the acquisition reflected what was happening in the wider beer market. 

“Pint prices are making consumers question where their beer comes from and why it costs what it costs,” he said. 

“While it’s tough market conditions out there, we think people want to support the quality and creativity that drives independent breweries like Nail and Feral.”

Expansion 

Rocky Ridge acquired Thunder Brewing in Victoria in mid-2024 before rebranding and opening the venue under its name in September. 

There are a couple of reasons for the brewery’s interstate expansion, according to Mr Coates. 

“First and foremost, we don’t really believe in shipping beer if you don’t absolutely need to,” he said. 

“We’ve always sent a little bit to the east coast, enough to have some form of brand presence there, but never enough to be seriously distributing. 

“There were a couple of other reasons … and one of them was that we’ve been roadblocked here [in WA].” 

Rocky Ridge had planned to expand to the east coast in 10 to 15 years’ time, but Mr Coates said the opportunity to purchase Thunder Brewing presented an array of benefits the brewer could not refuse. 

“It was a really good opportunity for us,” Mr Coates said. 

“The main reason was to reduce transport required to get beer to the east coast, which in turn reduces emissions, which well and truly keeps with our sustainability ethos.”

Rocky Ridge is due to open a taphouse in Duncraig in March after two years of delays attributed by Mr Coates to government regulation. 

“We’ve had quite a lot of delays, mostly with liquor licensing, which took over 14 months to get the green light,” Mr Coates said. 

“We’ve been building for about three months now, so we’re not far off.” 

Cheeky Monkey managing director Brent Burton (left) and director of operations Brendan Day at their new Rockingham taphouse. Photo: Danica Zuks

Fellow South West brewer Cheeky Monkey has also initiated expansion into the Perth region, opening its first metropolitan venue in Rockingham in August. 

WA’s fourth-biggest brewery acquired the site of financially troubled Sound Brewing Co, which went into administration in 2023, and converted the venue into a Cheeky Monkey mid-2024. 

Managing director Brent Burton said the brewer was already searching for another venue in Perth to continue expansion. 

“We’re not rushing into anything, but over the next three-to-five years, we plan to open at least another two or three venues in Perth and, seeing how Rockingham has performed, we like the idea of a suburban location,” Mr Burton said. 

“[This year, we’ll be] looking for another venue, and we’re pretty eager to at least locate one. “Doesn’t mean we’ll open this year, but we certainly want to identify an opportunity and at least secure it.” 

Mr Burton said he predicted a trend of breweries opening hospitality venues to ripple throughout WA this year. 

“I think you’ll start to see breweries like us open venues as growth opportunities, seeing as the retail sector and the distribution side of these businesses like us find it challenging to get on to shelves,” he said. 

“I think you will start to see a few more branded craft beer venues open up around the place. 

“That’s where the opportunity lies.” 

The second-biggest brewer in WA, Little Creatures, is one of those companies grasping new venue opportunities, with a site under construction at Elizabeth Quay. 

Perth’s Three Pound Group and Sydney-headquartered brewing company Lion – the owner of Little Creatures – have joined forces to move into the under-development Nine The Esplanade tower, with the second Little Creatures pub and restaurant expected to open this year. 

Three Pound Group operates a variety of venues and has goals to expand the capacity of one in particular: The Camfield. 

The Burswood pub is already crowned as the biggest pub in Australia, but it could become even bigger after the owner applied in October for an additional 500-person capacity to accommodate a regular patronage of 3,000 people. 

In other news, WA’s biggest brewer, Good Drinks Australia, delisted from the ASX at the end of December after 18 years. 

There were several reasons that drove this decision, according to managing director John Hoedemaker. 

“Good Drinks’ share price performance in recent years has not reflected the inherent value of the business for some time and, as a listed company, remains at the mercy of macro-economic and capital market factors that are unrelated to us, as well as being beyond our control,” he said.

“We believe that aggressively pursuing a strategy to grow Good Drinks’ proprietary brand sales volumes and market share is a more effective way to create value for Good Drinks shareholders.” 

Good Drinks’ first-quarter results for the 2025 financial year reported that its flagship Gage Roads Fremantle brewery had a 3 per cent increase in revenue from the corresponding period. 

The business also revealed plans to spend about $500,000 on venue upgrades during 2025. 

Lightning Minds founder Michael Payne has plans to start brewing non-alcoholic beer in WA. Photo: Michael O’Brien

Challenges 

The alcohol tax on beer has been rising in line with the six-monthly consumer price index numbers and, to much of the industry’s dismay, it was due for another increase by federal government in early February. 

The excise duty varies depending on beer strength, with the lowest rate being $52.66 per litre of alcohol for beer that doesn’t exceed 3 per cent alcohol content. 

Beverages that have more than 3 per cent alcohol content but less than 10 per cent have an excise duty of $108.89 per litre of alcohol. 

Those rates were set for the six-month period ending February 2. Rocky Ridge’s Mr Coates said the excise tax was "getting out of control". 

“It has a pretty significant impact for us as a predominantly wholesale brewery,” he said. 

“It accounts for about 35 per cent of our revenue, which is a huge amount that has go out the door before we get any money back in. 

“It’s a pretty massive impact on cash flow and it hurts.” 

Cheeky Monkey’s Mr Burton said it was well-documented that the alcohol tax on beer was difficult for brewers to manage. 

“I don’t know what the actual statistics are, but in comparison to other countries, the tax on beer is a lot higher in Australia,” he said. 

“That would be one of the biggest challenges the craft beer industry faces, and then there’s the competition. 

“It just seems to be getting to a point where it’s becoming oversaturated with the number of small brewers opening up and taking up shelf space in the bottle shops makes it very challenging.” 

WA Brewers Association’s Mr Morgan said there were more breweries than ever despite rising costs. 

“There’s been a bit of a tightening of the industry, and people are trying to get things to stay alive, but there are still opportunities out there,” he said. 

“A major challenge would definitely be the costs of things. 

"Everything has risen … dramatically in the last 12 to 18 months. 

“Finding a way to continue to produce beer with a decent margin that’s not being passed on to the consumer is tough, [but] I really believe [there are] opportunities in more hyper-local spaces. 

“For example, we just had Moore River Brewing open up in Moore River, so that services a local area, but is also a bit of an attraction to go for a drive just outside of Perth and have some lunch and try some beers and see the area. 

“There are still breweries popping up and people doing things.” 

Non-alcoholic beverages are an area for further opportunity, according to Lightning Minds managing director Michael Payne, who founded his company in 2022. 

Lightning Minds is WA-owned and operated, but contracts brewing in NSW as there were no facilities in WA at the time that could produce the non-alcoholic beers the company was looking to make. 

“Not brewing in WA has been a hard thing because we’d love to brew here,” Mr Payne said. 

“Obviously shipping into WA takes a bit off the bottom line as well, but we are in talks with some people to get some products brewed here this year. 

“Non-alcoholic brewers are still a very small part of the brewing sector as a whole … but it’s definitely growing. 

“In the last three years, there has been massive growth.” 

Lightning Minds recorded a 180 per cent increase in revenue for the 12-month period from December 2023 to 2024. 

“Some breweries are starting to release their own non-alcoholic but, in my opinion, I think there’s so many talented brewers here that we could have a lot better options,” Mr Payne said. 

“Coming from a dedicated, non-alcoholic perspective, I think a lot of venues underestimate how much money they may be leaving on the table with limited options.” 

Lightning Minds stocks products at 265 venues across Australia.