This week, Bernard Darnton is drinking locally, and thinking globally.
Dunedin Born and Brewed
Emerson’s Brewery, a Dunedin icon, was sold to Lion on Tuesday and so is now part of Kirin Holdings, the Japanese brewer. (Kirin, in turn, is part of the Mitsubishi keiretsu, making it a sort of drinking-and-driving conglomerate.)
I drove down to Dunedin the day after the announcement to check that the beer was still OK. It was.
The brewery itself is still in a crappy little industrial building in North Dunedin. You can still take in your empty plastic Coke bottle and get the receptionist to fill it with Bookbinder or London Porter while you peer into the factory floor where the alcoholic alchemy takes place.
I was worried that international conglomeracy might have change the place but I didn’t see any MBAs, PowerPoint presentations, or anyone realigning the supply chain strategy going forward. Just a few people milling around while the malt and hops turned into bloody good beer.
So, is it bad that Emerson’s has been sold? Presumably Richard Emerson doesn’t think so, or he wouldn’t have done it. I can still get great beer at a mildly exorbitant price, so I’m happy too.
But economically? Every recession we’re urged to export our way back to wealth. If it’s good to export beer, surely it’s even better to export a beer-making company and get all the cash in at once.
“But all the profits will go overseas,” cry the opponents of foreign investments. Economists will come in here and compare the sale price to the net present value of the stream of future profits. But I have just one word: Crafar. If you think that the flow of profits overseas is what economic nationalists object to, then the kerfuffle over the bankrupt Crafar Farms is baffling. The objectors should have been overjoyed that some foreign mug was foolish enough to buy that dog. Think of all those lovely losses flowing in from Shanghai!
The first comment I heard about Emerson’s after it was sold was, “There goes that,” as if being part of a big corporate would somehow taint the beer. If they’re not insane, Lion will leave Emerson’s alone to do its thing. The reason corporate brewers want into the craft beer market is because rich, sophisticated drinkers like me refuse to drink the piss-weak lolly water that’s marketed at teenage boys. Why would I drink Tui “pale ale” when I could drink Emerson’s 1812?
A huge part of the purchase price for a respected brand is “goodwill”. They’re certainly not paying for the physical plant, which is not much more than an overgrown home-brew kit. When I see a beer bottle with the Emerson’s logo on it, I think happy thoughts. That’s gold. To imagine that the new owners will blandify the beer for the mass market is to imagine that big corporates know nothing about market segmentation and that they hate profits.
For many entrepreneurs, the thing they do well isn’t making products, it’s making companies. If New Zealand can get rich by making and selling butter, we can get doubly rich by making and selling companies.
The end result is that Richard Emerson has the capital to expand, Dunedin still has it’s brewery, and I still have my beer. I’ll drink to that.