Two brands, Strongbow and Mercury (both Foster’s Group), currently have a dominant grip on the domestic market. Other brewers involved in cider are Lion Nathan with Five Seeds, Little Creatures with Pipsqueak and Gage Roads with Blue Angel. In addition, Suntory Australia imports Magners, the original Irish cider. Included in new domestic lines are low-carb ciders such as Strongbow Clear.

Mr Johnston blamed mistakes by his predecessors Ted Kunkel and Trevor O’Hoy, who paid too much for Beringer Wine Estates and Southcorp respectively, and ill-fated attempts to combine beer, wine and spirits marketing operations for much of the malaise.

An agreement whereby Lion Nathan will undertake the Australian distribution of the Budweiser range of products from later this year has been reached with AB-InBev. The agreement adds to existing arrangements between the companies going back over 20 years and includes a provision for local brewing of Budweiser as demand grows.

Australia’s punters are bitter over the latest change in the recipe of Australia’s favourite beer VB, writes John Harvey. In August 2009, Carlton and United Breweries (CUB), Foster’s local beer unit, cut the alcohol content of VB by 0.2 percent, saving tens of millions of dollars a year in beer tax and preventing a price rise while promising that the taste would be unchanged.

To the delight of Australia’s shoppers, writes John Harvey from Adelaide, the two retailers are undercutting prices viciously and engaging in “parallel importing” of major French brands. The battle, which has caused some stores to have customer waiting lists for lines in high demand, will probably force smaller players to cease carrying key imported brands.

Wine Grape Growers’ Australia Executive Director Mark McKenzie said in October 2009 that a large percentage of the grape growing and winemaking community was in severe financial stress. “We have at least 20,000 ha of vineyards more than we need,” Mr McKenzie was reported as saying. The wine industry needs to cut at least 10 percent of Australia’s 177,000 ha of vineyards from production, he said.

Mr Murray, who has headed Lion Nathan for more than five years, will report to a board of three Kirin directors and three independent local directors, including Chairman Geoff Ricketts. Mr Murray, who will be the seventh director, says that he wants the new subsidiary to retain a public company-style operation and he hopes that it will “go forward using his partnership principles”.

If the deal goes through, it will have big implications for corporate Japan. As The Economist observes, the Kirin-Suntory talks are notable because they underscore a new appreciation that success in Japan is no longer enough, that firms need to compete on a global scale, and thus need to be bigger.

According to media reports, Kirin is aiming to achieve sales of JPY 2.13 trillion, excluding liquor tax (USD 23 billion) and operating income of JPY 188 billion (USD 2 billion) by 2012. Kirin is already the biggest Japanese food and beverage firm but the targets, especially for the bottom line, are challenging. Estimated sales for 2009 stand at JPY 1.93 trillion (excluding liquor tax) and operating income is expected to be JPY 125 billion.

Lion Nathan already brew Beck’s under licence from InBev and have enjoyed a 20-year association with the world’s major brewer, originally through the German-owned Beck’s.