By James Atkinson
Lion will forge ahead with Tap King, its controversial new beer dispenser that enables drinkers to enjoy six beers from the brewer's range on draught in the comfort of home.
Lion has been in lengthy consultation with the hotel industry over the Tap King system, which irate publicans argue gives drinkers another reason to stay at home, where they can already watch sport, place bets and smoke freely.
Lion's position however is that Tap King "is designed to give beer drinkers more choice when getting out to the pub isn’t an option and they are enjoying a beer at home".
"Our research indicates that 69 per cent of all drinking occasions take place in the home and Tap King has been specifically designed for those occasions," a Lion spokesperson told TheShout.
"Tap King won't change the fact that Australians love getting out to pubs and clubs for a beer with mates, and we certainly don't want it to. Pubs and clubs are an essential part of a vibrant, sociable community and we continue to see on-premise as an important channel for our business."
Documents obtained by TheShout reveal that the dispense head (pictured above) would have a retail price of $32.99, with 3.2 litre PET bottle refills priced at between $18.99 and $27.99 each for the available beers – XXXX Gold, Tooheys New, Tooheys Extra Dry, Hahn Super Dry, James Boag's Premium and James Squire Golden Ale.
Lion professes that retailers' margins on the refills, which will also come in twin packs, will range between 16.5 per cent and 27.5 per cent, depending on the beer.
But retailers who have spoken with TheShout highly doubt these margins will be retained, with prices to inevitably come down when the product is discounted by the chains.
'A sad day for pubs'
Australian Hotels Association national CEO Des Crowe told TheShout: "There is some concern amongst the AHA membership that this product undermines draught beer served in hotels by encouraging customers to stay home with a cheaper product."
"Even as packaged beer has become increasingly affordable through retail outlets, pubs have maintained the advantage that the draught beer experience could not be replicated at home. This is now under some threat," he said.
Sydney publican Glen Stanford told TheShout it is a "sad day" for the on-premise.
"Both the on and off-premise will agree that draught beer is better than packaged beer. The one thing that we've always been able to do is provide a good beer that you couldn't get at home," he said.
"Now they're taking that advantage away from us and I think that's sad."
But fellow hotelier Will Ryan, of Sydney's Harold Park Hotel, said any home draught beer product will not be able to compete with the food and beverage offering of his pub, which has 16 different draught beers on tap.
"We've seen what's happened with packaged beer over the last 20 years where it's become so cheap that people will stay at home and drink before they go out. But they'll still come to the pub for the atmosphere, the service, the camaraderie," he said.
It’s now time that pubs support independent microbreweries by avoiding the bad habit of signing tap contracts with Lion, CUB and Coopers.
Pubs have cut their own throats and limited choice by tying up taps with the enemy- big breweries. This puts drinkers off coming to pubs.
People want variety and choice – that includes good beer variety and great food.
Its most prevalent in NSW and Queensland- so they need to change their ways and adapt.
They should have seen this coming.
This is more than a sad day for the Hotel industry,it is a tragic day.
The breweries have consistently gouged the draught beer market over the last 20 years with the six monthly price rises camouflaged as CPI increases ,to the point pubs margins have been decimated and the product has become too expensive for the average worker.
Now Lion want to rub salt into the publicans wounds by marketing a product that encourages patrons to stay away from their hotels.
Wow, I’m amazed at the negative way this story has been reported by The Shout. Let’s face it, even with craft beer in growth, the overall category is in decline. Surely a product that is going to bring attention back to the beer channel has some positivity about it?
While i saw this product a few months ago at the XXXX brewery i have some concerns about it. The standard drinks issue will raise it’s head again and retail space for the 3L plastic bottles will be limited. A stand in every coolroom could be the answer. I have no issue with a home product like this but doubt the price and practicality will be a winner. It is a step in the right direction in environmental ways and if they add 5 Seeds to the portfolio i will buy along with a Boag’s premium. This will probably turn out like the Plastic 400ml Carlton Cold bottles.
Rubbish! Hotel outlets make no less than 4-5 Hundred % on wholesale prices from the brewery’s. Draught beer prices are ridiculous.CPI increases are real and are meant to fluctuate but they consistently escalate. Paying the exuberant prices at hotels is not true representation of brewery prices of kegs. Greedy Hotels need to hit up labour government for the massive penalty rates paid to average hospitality workers.
Stagger….It seems you have a small amount of information and thats dangerous! Greedy hotels – lol.
Average Gp% for on premise in my market is 65 – 69% and falling. This covers numerous costs and thanks for pointing at wages – something that won’t change.
Hotels are advised on the price points they should be charging by the way and many are way under the recommended pricing levels.
back on topic…
Getting the punter to pay the initial $33 for the system will be tricky.
Im not sure if they are suggesting that Tap beer from this system is as good as tap beer from a pub. They spend a lot of money on tap systems to maintain the high quality of tap beer. Are they suggesting a $33 dollar plastic pourer provides the exact same quality as a modern tap system? lol.
Its a mistake but they need to forge ahead to capture the market moving away from traditional hotels while saying they don’t want to capture the market moving away from traditional hotels.
Yep, sounds like Lion.
To add to John’s comments anyone uncertain of the breweries direction on tap product look at your cost per lt on Pack against Bulk. It’s even more interesting if you compare it to 5 years ago (and that’s without taking the tax advantage on bulk into account). A little off topic but worth running numbers and asking your rep how they justify the costs.
This is really nothing more than a bigger bottle, calling it a draught system is a little bit of a stretch.
If the AHA actually think people go to pubs because of a single product (which is available at home anyway) then its a sign of how out of touch they really are with the public. A venue should be about offering an experience for people, the product that you sell is just one of the tools, its not what the heart of the business should be.
If anyone still thinks what you do for a living is sell beer, and your not a lion/CUB rep, then you deserve to fail at business.
I have a real keg system at home and I agree with Simon. Calling this a draught system is a stretch. It hold a little more than a six pack and costs the same as half a slab. What a joke.
I suppose some people may find this a nice novelty but I see it as a tacky piece of junk used to lure people in for the novelty of a tap system and make higher margins for the retailer. If you want an awesome tap system you need to make or buy yourself a proper kegerator.
I dont think people will stay at home just to drink off their 3L big bottle with a tap on it. People go to the pub for the atmosphere not just the beer on tap.