Premium beer war to begin

ABC’s The Business reports that Coca-Cola Amatil is preparing to take on foreign-owned Foster’s Group and Lion Nathan in the premium beer market.

CCA announced last month that it is partnering up with family-owned Casella Group, who make the popular Yellow Tail wine brand, to expand Casella’s Australian Beer Company operation. It involves a loan to Casella, with which it will expand the capacity of its Griffith brewery.  

The loan will become a joint venture in December 2013, when CCA is no longer under no-compete restrictions and can sell beer again.

Casella and CCA hope to enjoy the high margins in the burgeoning premium beer market.

“It's at least a billion dollar profit pool for the three major brewers in Australia,” CEO Terry Davis told The Business.

CCA used to be in a joint venture with SAB Miller, but this ended when SAB bought Foster’s.

Lion Nathan has been winning market share from Foster’s since then, and analysts expect competition for international and premium beer licenses to be stiff.

“This is primarily been driven by this shifting of very lucrative foreign label contracts that have moved away from Fosters towards Lion, particularly with Stella Artois and Corona being arguably some of the country's most popular beer brands,” said Naren Sivasailam of IBISWorld.