Aussie beer may have NZ flavour

By Dita De Boni

Australian-based Foster's Brewing Group will set up a commercial brewery in New Zealand if its market share grows to 15 per cent The managing director of Foster's Carlton and United Breweries, Nuno D'Aquino, told the Australian Financial Review that he believed the virgin supermarket beer market would provide an opportunity to take on Kiwi ale giants DB and Lion by allowing smaller players to bypass the "stranglehold" the two industry stalwarts have on distribution to liquor chains and bottle shops.

Despite the company's current 4 to 5 per cent market share with brands like Crown Lager and Stripe - a brand specifically designed for the New Zealand market - Mr D'Aquino said the company had been anticipating the change in legislation and would "end up being a far more influential player."

Lion Breweries spokesman Graham Seatter told the Business Herald that while any third player had to taken seriously, the low market penetration of would-be competitor Stripe made it "hard to imagine they would contemplate [building a brewery].

"To get the 15 per cent they say they need before building the brewery, they need a really strong brand here which they really haven't got.

"There's already surplus capacity in New Zealand as well as a shrinking market, and price pressures will squeeze margins unbelievably."

DB Breweries' Nicola Roberts agreed that supermarkets would provide an opportunity for Foster's' New Zealand operations, but added it "had yet to demonstrate that [its] brands have sufficient equity to compete against stronger New Zealand brands."