Foster’s ambition

Some have a vision, others a dream, but Foster’s has a plan. Ted Kunkel, CEO of the Foster’s Group, outlined a plan to double the group’s market value from presently A$11 billion to A$20 billion within the next five years. This should take the drinks company from being a mid-sized player to a global player competing with the likes of Diageo. How does he see it happening? By using the wads of cash thrown up by Foster’s beer division to fuel organic and acquisitive growth in its wine operations. Kunkel was quoted as saying that the A$2.9 billion acquisition of the US wine company Beringer Wine Estates had solved Foster’s growth impasse. "There are 19 million people here (in Australia) - we could only grow so much," he said. Major take-over targets were sought in the US and in Europe.

Tie a knot in your hankie...

... Or keep a bottle of your favourite beer in your fridge. For those consumers who cannot remember the street address of their brewery of choice, Adelaide’s brewers have the answer. First the West End Brewery (owned by Lion Nathan) came out with a beer called "107 Pilsener", named after its location at 107 Port Road (see the previous issue of "Brauwelt International"). Now it seems that Cooper’s too is considering releasing a beer called "Regency 416" in honour of its new home at 416 South Road, Regency Park. So there is hope at hand for all consumers troubled by senior moments.

Cooper’s new brewery opened

On 21 November, the Hon Rob Kerin, Premier of South Australia, officially opened Cooper’s new A$33.5 million brewery at Regency Park, a northern suburb of Adelaide. About 150 guests, among them IGB president Adrian Gardner and many other members, attended the ceremony which featured short addresses by brewing director Tim Cooper and his father, managing director Bill Cooper. Following the opening, Cooper’s renowned hospitality was enjoyed by all present. Guests were given memento plaques made from jarrah timber fermenting vats, which were used at Cooper’s Leabrook brewery from 1945 to 1988.
Australia’s best-known family brewer was established in 1862 and for 120 years brewing was conducted at Leabrook in Adelaide’s eastern suburbs..

107 Pilsener

West End Brewing Co, Lion Nathan’s South Australian beer company, launched a new Pilsener in October, brewed with hops from Bohemia. 007, 101, 107 ...why the mysterious label? It may be mysterious to the rest of the world, but every punter in Adelaide knows that West End’s address is 107 Port Road Thebarton. There you go.

Gone teetotal

Terry Davis, head of the international wine division of the Foster’s Group, is to be appointed Managing Director of Coca-Cola Amatil. In 14 years in the wine business he built Cellarmasters into the world’s second largest wine club business. Rumour had it that he was the frontrunner in the race to replace Foster’s CEO, Ted Kunkel.

CUB buys spirits brands

Carlton and United Breweries (CUB), a division of the Foster’s Group, has purchased the spirits brands portfolio of Tarac Liquor Marketers for just over A$2.2 million. Brands include a vodka, bourbon and scotch brand. James King, Managing Director of CUB, said in a press release that this purchase would enhance CUB’s spirits arm, The Continental Spirits Company, and allow the company to build its sales and marketing activities throughout Australia.

To be sipped not chuggallugged

If you saw the Kiwis chuggallugging their beer steins at the Munich Oktoberfest you would not have thought that back home they have taken to sipping their beer. Beer consumption in New Zealand has witnessed a steady decline over the past ten years. According to market research by Canadean, per capita consumption in New Zealand is now 15% lower than in the 1990s. Domestic production has fallen while imports have almost doubled in the past six years as consumers are purchasing lower volumes but demanding greater choice. In 2000, beer consumption was 3.2 million hl, for 2001 it is expected to decline to 3.15 million hl.
New Zealand’s two main brewers - Lion Nathan (52%) and Dominion Breweries (34%) - are attempting to adapt to the shrinking market..

Words of wisdom

Carlton and United Breweries Managing Director, James King, was quoted as saying that “(Australian) consumers are drinking less but better (quality).- What could he possibly mean? That consumers are increasingly choosing a glass of wine over a glass beer because of its better quality? According to the Australian Hotels Association, full strength beer accounted for 39% of the volume of alcohol consumed in the 2000/2001 financial year while wine was close behind at 32%. Spirits made up 14% of the market volume consumed, light to mid-strength beer 10% and RTDs (Ready-To-Drink mixes) 5% but growing fast. In the 2000/2001 financial year RTD consumption has risen high from 10.5 million cases to 16.5 million.

Not recommended for children

Australian and New Zealand ministers approved a new standard which allows energy drinks (or FCBs - Formulated Caffeinated Beverages) to be manufactured in Australia, whereas previously they had to be imported from New Zealand. It was decided that energy drinks such as V, Red Bull, Black Stallion, Ikon, Lipovitan, Red Eye Gold and Lift Plus, which contain up to 320mg of caffeine a litre, must carry a label saying: "this food contains caffeine" and the accompanying warning that "this food is not recommended for children, pregnant or lactating women and individuals sensitive to caffeine."
The standard took effect in August. The compulsory labelling is not expected to affect
the market for energy drinks adversely currently valued at A$150 million.".

Here they ride again

Just a month after Lion Nathan abandoned (or was forced to make do with a 44% stake) its protracted take-over bid for Montana Wines in New Zealand, the brewer turned round on its heels and made offers for two medium sized South Australian wine companies, Banksia and Petaluma. Lion Nathan offered to pay A$70.6 million for Banksia and A$222 million for Petaluma. Petaluma was listed in 1993 and owns South Australian, Victorian and Western Australian wineries as well as the Argyle Winery in Oregon, USA. Banksia was listed only 10 months ago. But lo and behold, who was also buying shares in Lion Nathan’s objects of desire? Well, British drinks giant Allied Domecq. At close of trade on 5 October Allied Domecq had 15% of shares in Banksia and was still buying shares in Petaluma..