Michael Bailey Deputy editor

Michael has been a business journalist for 12 years. He has extensive experience editing magazines covering funds management, commercial property and the travel industry. In 2011 he won a Citi Excellence in Financial Journalism award for a BRW cover story on economic indicators.

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Bubbling away: Cam Hines

Published 06 December 2012 05:15, Updated 07 December 2012 06:55

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Bubbling away: Cam Hines

Surviving as an independent brewer is enough to drive a man to drink.

Just ask Cam Hines, pictured, who with Dave Bonighton co-founded Melbourne’s Mountain Goat Brewery in 1997.

It’s taken Mountain Goat until the past two years to be “marginally profitable” and this is a business employing 18 people, turning over more than $5 million and brewing more than 1 million litres of amber fluid a year.

You’d have to be having fun along the way and the enjoyment factor for the pair rose eight years ago when they moved the brewery to an old tannery in industrial Richmond.

“We open the brewery up every Wednesday and Friday night and most Saturday nights for a function, and it’s really interesting to see the variety of the crowd that flows in for a beer and a pizza,” Hines says.

“Suits after work, then young families a bit after that and later on waves of hipsters. There’s a real movement behind craft beer and I’m proud of that.”

Hines has watched with satisfaction over the past 15 years as, he claims, a growing number of pubs have torn up their exclusive contracts with one of the “big two” breweries – Foster’s and Lion Nathan – and responded to punter demands for “better beer ... all of a sudden there’ll be eight or 10 independent taps in a pub”. The bar in their brewery has given the Mountain Goat founders sustenance as well as satisfaction. “It’s only 1 or 2 per cent of our total sales through our own bar but it’s a cash injection so we can pay the rent.”

Which brings us to the main reason Hines needs a bottle or two of his product every now and then – the excise duty on alcohol.

“The Australian Taxation Office doesn’t differentiate between us and Foster’s, so regardless of whether we’re making money, we’ve got to pay [excise duty] on our beer before we sell it,” he says. “Forget waiting the 60 or 80 days it might take a chain to pay you.”

Mountain Goat has to find about $1.5 million a year for excise duty, creating what Hines diplomatically describes as a “difficult cash flow environment”.

Undeterred, the Mountain Goat duo did an October roadshow of pubs around Australia, in an attempt to expand beyond the Victorian market, which buys 70 per cent of its packaged beer sold and 90 per cent of its kegs.

Getting the beer installed on taps is a priority, Hines says, as this is where people will mostly try a new beer. But if you then head to the nearest liquor store chain for a six pack, don’t expect to see Mountain Goat on special too often.

“Generally the chains understand we’re not part of a multinational, like a Matilda Bay or a James Squire,” he says.

“It doesn’t stop them asking us to participate in very expensive promotions but then they’re not offended when we continually say ‘no’.”

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