What’s Brewing Down Under?

America is showing Aussies what should be Australian for beer.

September 1, 2008 By Matt Kirkegaard

Americans who are told that Fosters is “Australian for beer” may scratch their heads with confusion when they land on our shores expecting to be greeted with barbequed shrimp and “Australia’s beer.” They would be hard-pressed to find the blue, white and gold label during their visit Downunder and they definitely won’t find the famous oil cans.

While it is a great tagline and Fosters is Australia’s most successful beer brand export (the beer itself isn’t exported), it is rarely consumed in Australia. The title of most popular beer in Australia instead falls to another label from the Fosters stable, Victoria Bitter—or, more simply, “VB,” with just over seventeen percent of the national market.

Although they won’t find Fosters, visitors will find plenty of beers that taste similar. In a blind tasting between Fosters, VB and many of the other mainstream beers, most Australians would be hard pressed to pick “their” beer, such is the similarity of the Australian lagers—and to most Australians lager is beer and beer is lager.

But a quiet and flavorful revolution is starting to take place, one that in many cases is inspired by American beers and even American brewers. It’s a revolution that had its seeds sown in the late 1980s.

Like the United States, the Australian brewing industry spent much of the 20th century in a period of slow consolidation resulting in a handful of breweries producing mainly lagers. Despite their similarities, these brews were sold almost exclusively within state borders. Whether this was due to drinker parochialism or gentlemen’s agreements between brewing companies not to encroach on each other’s patch is debatable, but it meant that in enormous states like Queensland you would have the bizarre situation of the “state” beer, XXXX, being shipped 1000 miles north to Cairns but not 70 miles south to towns the adjacent state of New South Wales.

The 1980s ushered in a period of wheeling and dealing in the beer industry that saw the spectacular rise and fall of brewing entrepreneurs such as Alan Bond, whose Bond Brewing briefly straddled the globe—including a foothold in the United States where he owned G. Heileman—before spectacularly crashing in the early ‘90s.

In the washup, two major brewers, Fosters Group and Lion Nathan, remained, controlling between them in excess of 95 percent of the Australian beer market. Like all of the major international lager producers, these companies made beers that were perfectly consistent, light and unchallenging for the average drinker. They were popular but they also call to mind a famous joke involving Coors and a canoe.

The great irony of the Australian craft scene is that the man who is perhaps most identifiable with the current growth of flavorsome craft beer led the team that developed Coors Light in the 1970s.

Hahn, Solo

In 1981, Dr. Chuck Hahn was head-hunted from his job as Director of Process Engineering at the Coors Brewery and brought to Australia charged with the task of modernising the Sydney-based Tooth’s Brewery. Soon after completing its $100 million upgrade, Tooth’s was taken over by Carlton and United Breweries—now known as the Fosters Group. The new owners didn’t require Hahn’s services.

After an unsuccessful attempt to raise funds for his own brewery in a market not yet ready for the concept of small breweries, Hahn had a stint in New Zealand before returning to Australia and opening his eponymous brewery in 1988.

Hahn says modestly the Australian beers of the time were good but he thought they could be “fine-tuned a little” to show some more interesting hop aromas. In truth, hop aroma was largely unheard of in those days.

These days, Hahn Premium Lager would barely rate a mention, but in Australia in 1988 it was something of a revelation and the small Hahn Brewery gradually developed a name for itself as a brewer of flavor-filled lagers.

But a recession in the early 90s and a repressive government excise regime made small breweries largely unviable. In 1993, brewing giant Lion Nathan took over the brewery and Hahn became their chief brewer.

Hahn was able to return to craft brewing when Lion Nathan launched their own craft beer arm, Malt Shovel Brewery, in 1998. Their James Squire range, named after the convict who is credited with the first successful hop cultivation in Australia and being the colony’s first brewer, is now one of the major forces in craft beer in Australia.

While not fitting the U.S. definition of “craft brewery,” due to being wholly owned by Lion Nathan, the brewery manages to maintain a craft beer mindset and delivers a range of excellent beers.

Hahn still looks to the United States for inspiration and tries to get to the Great American Beer Festival to judge every year and to see what is going on in the States. Calling it his “innovation research” for the year, he brings back interesting new beers for his team to sample in search of inspiration.

This process has directly led to a number of their specialty and seasonal beers, including the limited release Hop Thief Ale, an American-style pale ale; Rum Rebellion Porter, a well-balanced porter fermented with oak chips with a portion aged in rum barrels; and Golden Ale, an English-style summer ale hopped with Amarillo.

The importance of the Hahn-run Malt Shovel brewery is that it manages to walk that fine line between keeping a big brewery’s accountants happy and the country’s growing ranks of beer enthusiasts satisfied.

Hahn acknowledges this balancing act, describing it as a “tightrope walk between drinkability and flavor deliverance,” but he points out that at the end of the day, it is business.

“Small breweries are famous for two things: making great beers and going out of business,” he says when asked about his brewery’s broad appeal. “You have to have beers that you can sell enough of to pay for the beers that you can’t sell enough of.”

And in Australia, we have seen many great breweries come and go.

Growing the Craft Niche

For the Australian beer lover, it can be frustrating to watch the brewing scene exploding across the Pacific. But it is easy to forget that in Australia, like in America, mainstream lagers outsell craft by more than ten-to-one and craft beer is still best described as niche market.

While in Australia the number of breweries and contract-brewed beers has doubled to almost 140 this decade, Australia’s population is only 21 million and is densely clustered with almost 13 million living in the five mainland state capitals. Australian brewers look longingly at the population of the United States, where even a niche market can be viable.

Though it can be difficult waiting for the market to grow, another U.S. expatriate brewer is working hard to take Australians on a beer journey with him.

Brennan Fielding learned his craft in Honolulu at the Brew Moon brewpub. Brewing more than twenty styles, he won gold at the 2002 World Beer Cup for his schwarzbier, as well as numerous awards at the Great American Beer Festival.

When he and his Australian-born wife Peta decided to move to Australia, Brennan was employed to set up a brewpub in Brisbane. He was surprised to discover that, in addition to the brewery’s own beers, his employers also planned to sell beers from the major brewers.

“I said, I think you’re missing the point. If you’re going to have a brewery and make your own beers, why would you have any beers on but what you are making?” Brennan recalls. “Their attitude was that we won’t get enough people to drink these beers and if we don’t have the mainstreams we’ll turn off too many people.”

It was an eye-opening experience for him, but he quickly won people over with his well-made, distinctive beers—sold side-by-side with the mainstreams.

After a couple of years at the brewpub, his plans were in place to open his own brewery, Burleigh Brewing, on the southern end of Queensland’s Gold Coast. There he is adding to his reputation, currently brewing three beers under the Duke label: two premium European-style lagers at 3.5% and 4.8% and an American-style pale ale.

Fielding admits he’s not trying break any taste barriers with his beers: instead he is going for quality.

“At the moment, we’re only making three beers and you’ve got to admit that, so far as craft beer styles go, our three beers aren’t real crafty. They’re not schwarzbiers, not hefeweizens and not Belgian abbey ales. But we picked our beers for a strategic business reason, which was to get Burleigh Brewing Company on the map. We figured if we could get people to try the lager and it was flavorful and they enjoyed it—and not so flavorful that they wouldn’t buy it again—then we’ve achieved what we wanted to achieve.”

In a market where Corona is the most popular imported beer and 14 of the top 15 sellers are largely interchangeable mainstream lagers, this is a sound business strategy.

“We need to get them out of the shell of only drinking one type of beer—lager—and if I can get them to trust us, then I can bring on my hefeweizen, then I can bring on my schwarzbier, then I can bring on my Imperial pale ale,” Fielding says.

Taxing Strength

With a rapidly-developing taste for new beers, and Australian brewers seeking inspiration from the U.S.-led brewing renaissance, beer lovers watch expectantly for breweries in the style of Russian River to open and brewers to create beers such as Samuel Adams Utopias. They may have a while to wait.

Chuck Hahn says that while Australian brewers compare very favorably to their American cousins, the beers don’t approach the complexity of the U.S. versions because of the difficulty Australian brewers have in creating higher gravity beers.

In Australia, beer excise is calculated on the alcohol content of beers, rather than a flat rate per bottle. Such a system dramatically increases the cost of higher alcohol beers.

“Our government ensures that we don’t make high-alcohol beers just by taxing us,” Hahn says.

“We can make them: we made an Australian strong ale with 6.8 percent alcohol and it added 50 percent to our excise payment. Instead of paying $11 a case excise we paid over $15,” Hahn said. “More recently we made an abbey ale at 7 percent and paid $17.40 per carton in tax.

“Excise really controls us, but we have come up with some very flavorsome ales, lagers and wheat beers at the 4.5-5.5 percent alcohol level. They’re drinkable, they’re interesting, they’ve got complexities in flavor. We just won’t see the larger volumes of higher alcohol beer.”

While excise acts as a barrier to creating complex, higher alcohol beers, the Australian brewers are very good at creating interesting lower alcohol beers. Malt Shovel is soon to release its Winter Warmer, a dunkel style late “hopped” with native Australian pepperberries. Similar to pepper but with a distinctive flavor, Hahn says the beer will leave a warming sensation on the tongue.

A century after two American brothers, William and Ralph Foster, introduced Australians to lager through the brewery that still bears their name, American brewers are again helping to shape the Australian beer scene.