Coca-Cola Amatil to partner with Molson Coors and C&C Group

So this is the announcement we have awaited for two years: Coca-Cola Amatil’s (CCA) return to the Australian beer industry with a line-up of aspirational international beer brands.

CCA’s boss Terry Davis repeatedly had said that he may poach brands from rival brewer Lion, which holds licences for the Heineken, Stella Artois and Beck’s brands, and distributes Budweiser and Corona – the major-selling premium imported beer. Lion itself successfully nicked a slew of brands, including Corona and Stella, from Foster’s after it was taken over by SABMiller in 2011.

After all those winks and innuendos, the suspense got almost too much to bear. So imagine the surprise when CCA announced on 20 August 2013 that, as of mid-December 2013, they will handle Molson Coors’ premium brands in Australia. In addition, CCA will distribute C&C brands including Gaymer’s cider in New Zealand and the Pacific region.

It is unclear exactly which of Molson Coors’ brands will be introduced to Australia. The Molson Coors range of beers includes Coors Light, as well as craft beer brands such as Blue Moon and premium European brands such as Staropramen.

Gorblimey. That’s what I call an anti-climax. Whether it was intended or not, I am not sure. Still, the media build-up to this announcement was like sitting through 45 minutes (plus commercial interludes) of a mystery show on TV only to be told at the end, as the credits start rolling, that all the clues should have pointed to some character with no lines to speak in the whole episode. In media speak: it was all high concept but low execution.

As TheShout.com, a trade news site, commented: “The partnership with Molson Coors was not the high profile announcement that had been widely anticipated.”

A source quoted by TheShout.com said: "My gut feel is that they were hoping to launch with Corona or Heineken, which have existing volume, cut-through and brand equity, but it didn’t eventuate." Another source was even more scathing in its criticism: "They talked a big game and haven’t really delivered."

Several commentators pointed out that, despite the existing ties between SABMiller and Coors in the U.S. (the MillerCoors joint venture), Molson Coors’ brands landed with CCA rather than with SABMiller’s Australian unit Foster’s/CUB. Did SABMiller Australia turn down the offer and CCA jumped at the opportunity?

It has to be said, though, that CCA has a proven record in building brands from scratch. When in a joint-venture with SABMiller, they successfully launched SABMiller’s Peroni brand. Whether they can do the same for Coors Light, is not so certain.

In any case, CCA has got a brewery at hand to produce the licenced brands. Last year it poured AUD 46 million into a joint venture with privately-held wine group Casella. The 300,000 hl brewery must have a lot of spare capacity available because nothing much has been heard of Casella’s own Arvo beers after their launch in mid-2012.

Thanks to the hoopla over CCA’s partnership with Molson Coors the news that CCA’s first-half results saw a drop in profits and sales almost went unnoticed by Australian media. CCA reported a 12.3 percent decline in its net profit to AUD 215.9 million (USD 197.1 million) for the six months through June.