Slugging it out with wheat

Lion Nathan has continued its aggressive push into the Victorian market, Foster’s home market, by launching a new premium beer, Hahn Witbier. The introduction of the Belgian-style wheat beer is another attempt by the Tasman brewer to break into the 18- to 30-year-old Victorian market. Over the past two years, Lion Nathan has bought 45 destination venues, such as fashionable pubs, nightclubs and licensed café-pubs, spending an estimated amount of A$60m (US$29m). The new Hahn Witbier is targeted at drinkers of premium beer, which is the fastest growing segment of the market, currently comprising just 6 %.

World beer consumption on the increase

According to a report "World Drink Trends" recently published by NTC Publications, Henley-on-Thames/UK, wine consumption is rising at the expense of beer consumption in English-speaking Western countries. This general trend is also observed in Sweden and Germany, traditionally beer-drinking countries. In England, wine consumption rose 402 % between 1970 and 1999. The report covers more than 60 % of the world population and underlines the increasing popularity of beer in countries such as Portugal, Spain and also in Brazil, Paraguay and Turkey.
World beer production rose almost 1.4 million hl in 1998, particularly in South-East Asian and Latin American countries.
Consumption of alcohol remains highest in Western Europe, although it is falling in these countries..

Get down and boogie

Australia’s chains of liquor stores seem to be outdoing one another in special offers. In February a 24-pack of Carlton Draught retailed for A$26.99, a 24-pack of Foster’s Light Ice for A$19.99 (US$9.79), a 24-pack of Hahn Premium for A$40.99 and the equivalent of 24 bottles of Crown Lager for A$45.98 (US$22.50). The rationale is that some brands are just standard and others premium. Compare that with the price of 8 bottles of Lemon Ruski - A$20.99 - or UDL’s Vodka & Raspberry RTD - A$18 - and you get the full picture.

Bare it all

The Australia and New Zealand Food Standards Council has revealed plans for a major reform of how local food manufacturers label their packaged foods. Under the new code, which has been approved of by State and New Zealand health ministers, all packaged food will have to carry nutrition labels, indicating the level of fat, salt, kilojoules and carbohydrates. Furthermore, almost all labels will have to carry a breakdown of the percentage content of ingredients. There are concessions for seven food categories: cream, icecream, peanut butter, yoghurt, chocolate, fruit juice drinks and jam.
The new labelling code will be introduced over the next two years. It has been met with an outcry by the Australian Food and Grocery Council. Visit its website at www.foodsciencebureau.com.au.

Wine in a can

It was a logical next step. In the 1960s, Australia gave the world wine in a box. Now it has introduced wine in a 330ml aluminium can. It took wine producer Iron Bridge from the state of Victoria and the packaging company Amcor Beverage Cans over three years to develop the concept. The makers of the product claim that wine in a can has a significant advantage over wine in a bottle because cans are tamper proof and safe from exterior influences which are known to cause oxidation and spoilage. Iron Bridge’s 1998 Cabernet Shiraz will retail for A$5.50 (US$2.70) per can. The wine producer plans to launch a website, www.wineinacan.com for online ordering.

Keen on New World wines

Allied Domecq and Diageo are thought to be keen on acquiring New World wine companies. Rumours that Diageo was going to bid for Foster’s Brewing Group are indicative of such an interest.
Although forecasts issued by the organisers of the Vinexpo trade show argue that the world’s wine industry will face a surplus of more than 100m hl a year by 2005, Beringer Blass’ Managing Director, Terry Davis, was quoted as saying that there was still a shortage of premium grapes.
That is probably one of the reason why Australasian wine companies are on a frantic buying spree. In March Southcorp (Penfolds, Lindemans), which produces 18m cases, took over the family-owned Rosemount Estates wine company, which produces 4.25m cases, for A$1.5bn (US$735m).3bn company (US$2.1bn (US$539m)..

Foster’s Australian for ... wine

They will soon have to rephrase their famous tagline. According to Foster’s CEO, Ted Kunkel, serious consideration was given by the board to change the name for Foster’s Brewing Group (FBG) to reflect the changed status in the beverage and hospitality world. Foster’s expanding wine division, Mildara Blass, has already been renamed to Beringer Blass Wine Estates.
Forecasts indicate that earnings from Foster’s wine division will overtake those from beer in the next 18 months. FBG reported a 20.5 % increase in net profit (pre-abnormals) to A$293.1m (US$143m) for the half-year ended 31 December 2000. The result was ahead of market expectations. Analysts in Australia said that a three month earnings contribution (EBIT) from the newly acquired Beringer of A$63.6%..

You think we are a bargain, mate?

Lion Nathan is preparing to fight a critical appraisal of its offer to buy up to 51 % of New Zealand winemaker Montana Group. A report by PriceWaterhouseCoopers found that the offer by Lion of NZ$3.20 to NZ$3.80 a share was too low. Fair value was in the range of NZ$4.16 to NZ$4.64 a share. Lion already holds 28.2 % of Montana.

Brewery redevelopment

DB Group, 76.6 % owned by Asia Pacific Breweries, said that it would begin a NZ$60 million redevelopment of its Waitemata brewery. The redevelopment, which includes a new packaging hall, is expected to be completed by the end of 2002.

Breathless lion

It would have taken a long breath to succeed in the Chinese beer market. Too long apparently for Tasman brewer Lion Nathan. Rumour has it that Lion Nathan will sell its operations in China sometime soon. The assets are worth US$162 million. In the year ending 31 August 2000 Lion Nathan reported a loss of US$13.2 million in China, which makes it yet another year written in red ink since 1995.