The shift will lift Lion's share of the packaged beer market to 47% compared with Foster's 45.8%, The Australian newspaper reported on Saturday, citing market researcher Nielsen, Foster's has distributed Corona in Australia for 22 years and had two years to run on its contract.
On Friday, SABMiller said Corona's Mexican parent company Grupo Modelo was exercising "a change of control provision terminating Foster's licence to import and distribute Corona Extra in Australia with immediate effect." Lion issued a statement on Saturday saying it now represented Corona in Australia.
SABMiller's statement shrugged off the loss of the brand, saying: "Sales volumes of Corona Extra in the calendar year 2011 were about 600000 hectolitres in a total Australian market of some 18-million hectolitres. SABMiller's expected financial returns from the acquisition of Foster's will remain broadly unchanged following this termination."
While SABMiller claimed Corona Extra represents 3.3% of Australia's beer market, Lion put Corona's share at 4.2% in its press release, touting the brand as "Australia's largest premium beer".
Corona's switch from a SABMiller subsidiary to an Anheuser-Busch InBev affiliate was probably inevitable as Grupo Modelo is half owned by Anheuser-Busch. The world's biggest brewer (SABMiller is a distant second) sells its US brands Beck's and Budweiser via Lion in Australia.
While SABMiller downplayed the loss of Corona, it is the third brand Foster's has lost since SABMiller acquired it last December, and more are likely to follow. Corona follows Stella in brands Lion represented in New Zealand and has now captured the Australian franchise from Foster's.
This leaves Guinness as a brand sold by Lion in New Zealand and Foster's in Australia for parent company Diageo, and which is seen as the next beer Lion may take from Foster's in its home market.
"Corona, the biggest premium imported beer in the Australian market with 34% of the segment, is the third licensed importer to jump ship following the takeover, with Stella Artois shifting to Lion just days after the SABMiller deal was completed and Asahi announcing last month that its Super Dry brand would be made by its Independent Distillers contract brewing facility in Melbourne from next month," The Australian reported. Besides importing Heineken and Budweiser brands, Lion brews Australia's XXXX Gold, Tooheys, Hahn and other local beers.
"While this will have a short-term impact, it is consistent with SABMiller's long-term strategy of growing its own proprietary brands," Foster's told The Age.
Source: Business Day
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