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Australia. Small brewers shrug off Foster’s wet weather beer sales slump

Australia’s SME beer companies have shrugged off suggestions from Foster’s Group that cooler weather conditions have affected beer sales, saying changing consumer preferences are turning customers towards boutique brewers and away from the majors.
Foster’s Group yesterday reported revenue in its beer division fell 5.3% in the six months to December 31, to $1.3 billion, with the company saying total beer market sales fell 7% during the period, mainly due to unseasonal weather.
But evidence suggests that Australia’s big brewers are feeling the pain of falling sales.
Fosters and Lion Nathan have been losing market share during recent years as competition in the industry increases, with foreign brewers and small Australian brands growing in popularity.
Research from IBISWorld shows that while the big two still account for 80% of revenue a range of smaller boutique brewers has increased market share in recent years.
Cam Hines, co-founder of Melbourne-based boutique brewer Mountain Goat Beers says weather had little effect on his business.
“Our sales have been increasing 40% annually for the last two or three years and this summer has been no different,” he says.
People are moving away from the larger brewers in droves. They like small brewers, they like the story behind it, they are more adventurous and they want to taste different beers.”
Coopers chairman Glenn Cooper said cold weather didn’t normally help his business but the company positioned its products to meet conditions and had promoted sales of Coopers Best Extra Stout during the second half of the year, with a resultant 7.7 per cent increase in sales.
“Stout is normally a winter drink but we think the cooler start to summer has extended its season and people have been enjoying it later in the year,” he says.
Increased interest in mild ale around Australia saw Coopers experience significant growth.
“While a number of other beverage producers have reportedly been affected by the seasonal slowdown we are delighted that we have been able to increase our overall sales by 4.7%,” Cooper says.
“It shows interest in Coopers products is continuing to grow around Australia.”
Foster’s major competitor, the Japanese-owned Lion Nathan which produces Tooheys and XXXX, has shown that beer manufacturers can fight against weather conditions, posting a 4.1% increase in Australian beer sales in the 2010 calendar year.
Increased competition in the beer market comes at an interesting time for Foster’s with the firm in the final stages of splitting its beer and wine operations into two ASX-listed companies.
The new Treasury Wine Estates is expected to list in coming months.
Forster’s shares dropped almost 2% yesterday to $5.74.

16 Feb. 2011

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