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Sat, Dec 14, 2002 - Page 12 News List

Foster's, Lion count on promos to get beer back in fashion

BLOOMBERG , MELBOURNE

Foster's Group Ltd and Lion Nathan Ltd are offering everything from rock concert tickets to a day at a cricket match to reverse a two-year slide in beer sales and win back drinkers who defected to pre-mixed spirits.

Australia's two biggest brewers, who control 97 percent of the country's A$8.5 billion (US$4.8 billion) beer market, are stepping up promotions during the crucial summer season, when they make a third of their annual sales.

Beer makers "are obviously trying to do what they can to arrest the volume decline," said Mal Higgs, president of the Australian Liquor Stores Association, which represents 3,000 liquor retailers.

"The industry is demonstrating its usual competitive nature." Beer consumption fell for a second year in the 12 months ended June 30 after tax changes pushed up the price of some brews by 9 percent and cut 10 percent from the cost of some pre-mixed cocktails.

That's led young drinkers to switch from beer to beverages such as Bacardi Ltd's Bacardi Breezer rum drinks, Diageo Plc's Bundaberg rum and cola in a can and Allied Domecq Plc's Malibu and cola. The pre-mixed-spirits market is growing at about 30 percent a year, and is now about 13 percent the size of the beer market.

Lion Nathan holds about 42 percent of the nation's beer market, trailing Foster's 55 percent share. Lion Nathan shares fell 2 cents to A$5.35 at the 4 pm Sydney close on the Australian Stock Exchange, and Foster's fell 1 cent to A$4.50.

In a bid to narrow the gap, Lion Nathan, the maker of Tooheys and Hahn beers, said it will increase advertising spending 40 percent during the holidays. The campaign "will be partly funded by cost-saving initiatives and by re-directing other" promotions, Lion Nathan Managing Director Andrew Reeves said.

The company, 46-percent owned by Japan's Kirin Brewery Co, is offering drinkers of Too-heys Extra Dry and James Squire beer the chance to win tickets to the Big Day Out rock festival, featuring the Foo Fighters.

Foster's, the main sponsor of the one-day cricket tournament between Australia, England and Sri Lanka that started yesterday, is giving drinkers of its top-selling Victoria Bitter the chance to take a group of friends to a game, where they will get free beer and food, while watching the action from a sofa.

It's also increasing marketing of Crown Lager to mark the 50th anniversary of Australia's top-selling premium beer.

A scorching start to summer bodes well for brewers.

The eastern half of the nation, home to four in five Australians, is likely to experience a hotter-than-average summer, according to weather forecasters.

Australia is in the grip of the worst drought in a century, and wildfires flared near Sydney earlier this month.

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