By James Atkinson
UPDATE: Lion to be announced as new Corona distributor
Mexican brewer Grupo Modelo has terminated with immediate effect its distribution agreement with Foster's for the Corona Extra, Pacifico Clara and Negra Modelo brands in Australia.
Foster's has been informed by Grupo Modelo that it intends to exercise a change of control provision following the Australian brewer's takeover by SABMiller in December 2011.
"This decision is not connected with CUB's performance under the agreement, which has exceeded all contractual requirements," Foster's said.
With Coca-Cola Amatil precluded from re-entering the Australian beer market until 2014, Lion is tipped as frontrunner to take over the lucrative Corona contract, which has been the subject of speculation for several months.
Under another scenario, Grupo Modelo could set up its own Australian operations. Coopers is also an outside chance, with the South Australian company understood to have previously expressed an interest in distributing Corona.
Foster's said that while the decision will have a short-term impact, it is consistent with SABMiller's long-term strategy of investing in and growing its own proprietary brands, which include Peroni Nastro Azzurro, Peroni Leggera, Miller Genuine Draft, Grolsch Premium Lager and Pilsner Urquell .
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"CUB will invest to grow these throughout Australia to capitalise on the opportunity as a result of exiting the Modelo agreement," Foster's said.
"In addition, CUB will continue to invest in its own portfolio of leading domestic brands, including Carlton Draught, Victoria Bitter, Cascade, Crown Lager and the fastest selling craft beer, Fat Yak."