Thirst for locally brewed international beer brands waning?
In March 2015, Australian media speculated that the drop in sales of the Heineken brand in Australia could have been caused by trendy inner-city types spurning the locally brewed version because it is made by Lion under licence, and not imported like many other premium beer rivals.
Heineken's joint venture with Lion squeezed out a tiny increase in profit last year, even though sales declined by 9.2 percent to AUD 65.8 million (USD 50.1 million), it was reported.
The fact Heineken is brewed in Australia for the local market rather than being an “imported” beer seems to matter to discerning customers.
Meanwhile, craft beer, which seems to be championed mainly by inner-city dwellers, is the fastest growing segment in the beer market, with analysts estimating it is growing at between 10 to 15 percent annually.
The premium beer market is also still expanding as a category, but mainstream beer has been in decline for the past six years. Total beer consumption in Australia is also falling because of a combination of changing consumer trends, drink and driving laws and excise increases.
The Heineken joint venture is now in its 11th year after being established in 2004 when the Dutch brewer partnered with what was then known as Lion Nathan to try and give the Heineken brand more momentum and to take advantage of the rising demand for premium beers in the Australian market.
Heineken Lion Australia made a net profit after tax of AUD 12.6 million (USD 10 million) for the 12 months ended 30 September 2014, up from AUD 12.2 million a year earlier, according to the joint venture company's accounts which have been lodged with the corporate regulator.
Lion, which was fully taken over by Japan’s Kirin in 2009 after an AUD 3.4 billion buyout, sells mainstream beers XXXX Gold, Tooheys and West End in its own beer business, which also includes James Boag's Premium Lager among its more upmarket, premium brands.
According to media, the Heineken Lion joint venture in its annual report said sales revenue for the year ended 30 September 2014 had fallen to AUD 65.8 million from AUD 72.5 million a year earlier.
