CCA’s Pacific push underlines its beer ambitions
In terms of volumes, the beer markets of Fiji, Papua New Guinea, Samoa, New Zealand and Guam don’t spell "BIG". But having secured multi-year agreements to distribute brews such as Modelo’s Corona Extra, Carlsberg’s eponymous brand and Molson Coors’ Coors Light, Carling and Cobra brands in these countries, Coca-Cola Amatil (CCA) will be able to prove itself a worthy distribution partner for these global brewers ahead of its return to the Australian beer market in 2014.
In mid-May 2012 it was announced that the agreements between CCA and its international beer peers are performance based and are part of CCA’s pitch to become the local distribution partner for global brewers, when its self-imposed exile from Australian beer comes to an end.
Late last year, CCA agreed to sell its 50 percent share in Pacific Beverages to SABMiller for AUD 305 million (USD 298 million) - a deal that involved an agreement to stay out of the Australian beer market until the end of next year.
CCA announced yesterday that it would also be receiving AUD 34 million from SABMiller as a result of not taking up its option to buy Foster’s Australian spirit business.
But CCA’s Chief Executive Terry Davis has made no secret of his intention to become a major force in premium beer when the non-compete period expires. Mr Davis said he believed the alcohol business remained a "core growth opportunity" for the company. "The alcoholic beverage market in Australia is highly profitable and the profit pool of more than AUD 1.2 billion is greater than the profit pool for non-alcoholic beverages," he was quoted as saying.
Last year CCA did a ten-year deal with the Jim Beam spirits company to distribute its products in Australia.
Mr Davis said the Pacific Island agreements would have little impact on earnings but were "strategically important".
CCA is also keen to leverage its AUD 62 million (USD 61 million) acquisition of a Fijian brewery and distillery from Foster’s by launching Fiji Beer and Bounty rum brands in New Zealand and eventually Australia.
"Foster’s have never had an active programme to sell either Bounty Rum or Fiji Beer into Australia or New Zealand – we’ll reverse that," Mr Davis said.
