SABMiller tries to revive Foster’s fortunes
It seems that SABMiller have realised that the previous Foster’s management axed too many experienced brewing/technical staff, thus creating an embarrassing shortage. That’s why in January 2013 there were ten technical job vacancies at Foster’s published on the website seek.com.au.
SABMiller’s unit Foster’s has reported further declines in sales for the October-to-December 2012 quarter, despite its flagship Victoria Bitter (VB) reporting its first gain in sales for more than a decade.
SABMiller, which acquired Foster’s for AUD 12.3 billion in December 2011, reported a 4 percent decline in underlying sales by volume for the three months to the end of December 2012, compared with the same period a year earlier.
However, the sales decrease was in line with the overall beer market, and SABMiller noted the pace of decline had slowed from the 8 percent fall seen in the July-to-September 2012 quarter.
Including the loss of third party brands Foster’s had previously brewed under licence or distributed, such as Corona, Asahi and Stella Artois, sales were down 15 percent.
All foreign brewers, who had previously licensed their brands to Foster’s, used "change of control’ provisions in their contracts to move their brands to other brewers, mostly Lion (which is owned by Japan’s Kirin).
The highlight of Foster’s result was a 2 percent gain in sales volumes of Foster’s flagship brand VB, boosted by the company’s decision to restore its alcohol content to its original 4.9% ABV, having been cut by Foster’s to 4.6% ABV in 2009 to save on excise and avoid punishing retail price hikes.
According to media sources, within months of SABMiller buying Foster’s in December 2011 it began work on a project to save VB. SABMiller’s own brewers were sent to Foster’s Yatala and Abbotsford breweries to improve the production process and thus beer quality.
However, SABMiller said VB’s sales boost was also the result of "improved retail engagement", meaning it did not raise prices when it lifted the alcohol content, causing SABMiller to take an instant AUD 20 million hit to its bottom line as it paid more alcohol excise, it was reported.
Still, the sales increase was a significant turnaround for VB, which ten years ago accounted for one in four beers sold in Australia but now has a market share of closer to 12 percent, slightly below Lion’s mid-strength beer XXXX Gold, which became the nation’s biggest selling beer last year, Australian media say.
Interestingly, there are signs that VB may be attracting some younger drinkers again, who have since developed a taste for import and craft beers. From what we at BRAUWELT International hear, VB has gained the new nickname "San Franz". It’s short for San Francisco 49ers, a professional American football team based in San Francisco, and plays on VB’s return to 4.9% ABV.
