The craft beer sector in Australia is growing rapidly.

CHINESE annual consumption of domestically made beer is falling by a level more than double the size of Australia’s total beer production, a response to both an economic slowdown and a change in drinking habits.

However, while this is a huge concern to Australia’s malt barley industry, leaders from within the malt industry have said the change in drinking habits in China towards a preference for imported premium beer and lower malt production from Europe may soften the blow.

Speaking at the Barley Australia forum in Adelaide last month, Paul Rigoni, Barrett Burston Malting, said the slowdown in the Chinese economy was lowering consumption among poorer consumers while the more affluent were switching towards imported beer.

Trevor Perryman, Malteurop, said the Chinese malting sector also had an image problem among its neighbours.

“Throughout Asia, consumers are often a little suspicious of food products of Chinese origin and this applies to malt.

It all boils down to a slowdown in the Chinese malting industry, but Mr Perryman said it was not necessarily bad news for Australia’s barley sector, saying Australian-produced malt would be in demand.

“Australian malt still has that premium image so it may be that we have the odd situation of us being a niche player on a macro scale.”

“We’ve got good authenticity and good accreditation process and that will go a long way.”

The scale of the production numbers in China are staggering, there is still more unused capacity for malting that can be turned on than the entire malting capacity in Australia.

However, Mr Perryman said it would not necessarily translate into competition for malt exports.

“A lot of the capacity is inland and it can’t be exported economically.”

Mr Rigoni said Australia also had good opportunities in emerging beer drinking markets such as Vietnam and Myanmar where beer consumption is rising quickly.

He also highlighted India as a market to watch.

“The country will be a complex market, but it is big and will get bigger.”

Domestically, Australian farmers are benefiting from the rise of the high value craft beer industry.

“In Australia, nine per cent of the total dollar value of the beer industry is from craft brewers and we have seen over 100 new breweries come on line over the last couple of years.”

“The craft beer industry is now worth $400 million out of a total beer market of $4.3 billion.”

Mr Rigoni predicted potential further growth, saying in the US, a similar market to Australia, the craft sector was worth 19.3pc of the total beer market.

He said craft beer was good for maltsters and barley producers as it had high inclusion rates of barley.

And it will not just be the Australian craft beer boom that benefits Aussie barley producers.

“We are starting to see craft beer made in Japan and Korea and they may look to use Australian barley in their product.”

The story Chinese beer slowdown but silver lining emerging first appeared on Farm Online.