THE DISTILLERY: Thirsty work

The Distiller celebrated the weekend with a glass or three of Oban 14-year old and The Macallan 12-year old single malt scotch. It's indicative of not just The Distiller's taste for heavy Scottish liquor, but also the broader tastes of drinkers in the under-30 cohort that our two major brewers, now foreign owned, are struggling to come to grips with.

Fairfax's Adele Ferguson investigates this phenomenon in what is the feature of the weekend business reads. We've also got a broad discussion about the state of the economy, whether it's the reading of economic figures, the direction of interest rates or the dollar.

But first, Fairfax's Ferguson delivers a mouth-watering piece on the outlandish campaigns by the two major brewers to win back drinkers to their big brands like Lion Nathan's XXXX and CUB's Victoria Bitter.

"Highly respected marketing strategist Toby Ralph sees it as a misdirected attempt to recreate the brand fervour of last century. ‘Beer drinkers are no longer brand or category devotionalists. Wine and shots are growing, cider is going nuts and beer is shrinking despite premium and craft beers growing. Beer sales are dwindling; soon it will be only 40 per cent of alcohol on offer,' he said. For Ralph, a Proustian desire for things past is not the way forward. ‘Ironically they are creating their own fantasy of the old brand-loyal blokey world they must yearn for – but that stereotype has become a whole lot more complex in the real marketplace.''

Ferguson is right on the money. In a past life, The Distiller used to work in a drive-through bottle shop. The tradies over the age of 40 who rolled in with metronome-like frequency were unquestionably brand loyal.

"Just a slab of draught (Carlton) thanks mate,” they'd say before their ute had even come to a complete stop. Textbook.

But their junior counterparts, along with the lawyers, accountants, doctors, furniture makers and any other profession you can imagine below the age of 30, were rarely so automated.

Ramping up the alcohol content in VB won't bring them youngins back. In fact, they never were, and will never be, the doting fans of the big brands.

Meanwhile, for those who want to point out that the federal government is not presiding over a strong employment market because the participation rate has deteriorated, The Distillery gives you Fairfax's Ross Gittins.

"Fortunately, however, it's still not that simple. Heard of the ageing of the population? Whereas for decades it was pushing our participation rate up, it's now started pushing it down, meaning it's no longer safe to assume a fall is all the work of discouraged jobseekers. This is an unfamiliar but important story, so settle back for a primer on demography. We are living at a time in the world's long history when longevity is steadily rising (because of improvements in public health, increasing affluence and advances in medical science) but fertility is falling (because of improvements in contraception and rising affluence). A country's ''total fertility rate'' is the average number of children women are projected to bear over their lives.”

As you've probably picked up, Gittins goes on to explain quite a bit more.

Just to be clear, The Distillery doesn't doubt that Australian businesses are struggling, particularly in the retail sector. They're not hiring, all the anecdotal evidence points to that.

But too often business commentators (and politicians to boot) use slight movements in economic statistics out of context to justify firm diagnoses for the Australian economy, which are then followed by their own prescription of how to fix it.

The participation rate is one of the most frequently ‘gotya' stats that business commentators roll out. The more pieces by Gittins that explain the potential folly of these numbers the better.

The Australian's economics editor David Uren continues to unpack the Reserve Bank's monetary policy statement and concludes that it could be a rise in unemployment, brought about in some way by the peak in mining investment, that draws the central bank out to cut rates again. The conversation then turns, inevitably, to the currency.

"The early signs for 2013 are that Australia will continue to suffer from an elevated exchange rate. The Japanese authorities are doing what they can to depress the value of the yen, while the president of the European Central Bank, Mario Draghi, last week flagged his concern about the strength of the euro, leading markets to the conclusion that the ECB might act to push its value lower. With the US Federal Reserve still committed to its quantitative easing program, which is helping to suppress the value of the US dollar, and China continuing to manage its exchange rate, the diminishing pool of countries with free floating exchange rates, like Australia, are highly exposed. It is doubtful that the Reserve Bank has the capacity to stem the rise of the Australian dollar without reversing the float, which is seen to have brought the nation 30 years of prosperity. What it can do, however, is to lower its cash rate, and it is holding that option open.”

The Australian's John Durie passes on the wishes of the Business Council of Australia that the government stop this needless obsession with the negatives of a high Australian dollar and start using it to our advantage. Infrastructure could be a good place to start.

"An investment binge may not be high on the list of priorities but spending money to remove bottlenecks that are holding back growth after full due diligence on the projects is on the BCA dream list. Business concerns about the minority government are well-known, so how much better do they think the opposition will be if it wins the election? At a BCA round table, boss Tony Shepherd confided: ‘They seem to recognise the importance of productivity and the need for business to grow to help the economy to grow.' The words are carefully chosen to avoid stepping on too many toes but is hardly a ringing endorsement either.”

Staying with economics and the markets for a moment, Fairfax economics correspondent Peter Martin examines the enormous benefits that wealthy Australians are drawing from the superannuation concession.

Fairfax's Malcolm Maiden says now is a time for opportunists to book some profits, while The Herald Sun's Terry McCrann says consumers are not replicating the exuberance being felt in sharemarkets.

Fairfax's Gittins also comes to the defence of the Reserve Bank in a separate piece and rips into some economists who think they know better, particularly those from Canberra and Melbourne.

The Australian Financial Review's economics editor Alan Mitchell says the mining sector is still carrying the Australian economy and it won't disappear this year once investment peaks.

The Australian's economics correspondent Adam Creighton is full of praise for Syliva Nasar and her book Grand Pursuit: Great 20th Century Economic Thinkers and What They Discovered About the Way the World Works.

The Australian's Robin Bromby reflects on the lack of reliable returns from Australian gold miners.

And finally, Fairfax's Michael West tears into Empire Oil & Gas for its intimidating tactics against shareholders that posted critical remarks on HotCopper, adding that shareholders do no have free speech when it comes to reactionary, over-protective company board.