By James Atkinson

SABMiller has expressed surprise at beer's low share of the total Australian alcohol market, which the company says presents plenty of opportunities for the neglected Foster's business.

Ari Mervis, Foster's CEO and SABMiller managing director Asia-Pacific, yesterday told investors that beer's 44 per cent share of the Australian market as a percentage of alcohol equivalent was "lower than we would have thought".

"If you look at the climatic conditions, the cultural conditions and the outdoor lifestyle, for beer to only be at 44 per cent of total alcohol… when you compare it to a place like the UK 49 per cent, or the US 55 per cent, we certainly see it as an opportunity going forward," he said.

Mervis backed up recent comments by SABMiller executives that the Foster's business had suffered in recent years from a lack of consistent strategic direction.

"At sometimes they were chasing price, at some stages they were chasing market share and at some stages they were chasing volume – a lot of different directions," he said.

He said Foster's had suffered from a defensive culture and a loss of confidence among senior management, but there were some "fantastic employees" in its ranks.

"It's a real breath of fresh air for them to once again be part of a true beer organisation, and be able to go forward," he said.

Lion boss Rob Murray recently declared XXXX Gold would knock Foster's Victoria Bitter off its perch within the next 12 months.

But following on from Mervis, Foster's chief marketing officer Andy Gibson yesterday told investors VB still has one million dedicated drinkers and the brand will not relinquish any more of its market share.

He said his team's first priority was to differentiate its brand positions so that consumers could actually understand what the brands were trying to say.

"The portfolio that we inherited was actually not that well positioned, there were many brands that overlapped each other that weren't actually truly speaking to their target audiences," he said.

"We believe it is a winning and advantaged portfolio."

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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  1. Once again the industry suffers because suppliers are sucked in to the retailers price demands rather than build brand equity.
    The industry is screwed.

  2. I drink a lot of beer. Just not SAB Miller, Lion Nathan, or CUB trash. More Mountain Goat, Murray’s, and US imports please

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