Lion taps into pub experience

By SIMON HENDERY

Lion Breweries is taking its battle against falling beer drinking into the bar, with a push towards better quality tap beer and more inviting pub surroundings.

Annual beer consumption has dropped from 105 litres to 80 litres a head over the past decade and Lion's managing director, Julian Davidson, believes the key to improving margins lies in improving drinkers' experience of tap beer.

A growing focus on theme bars (such as Irish bars and Belgian beer cafes) and emphasising the place of its breweries' place in local communities were part of Lion's strategy to "make our brands bigger than just the beer experience", said Davidson.

Examples of a community presence included the establishment of an interactive "Lionzone" tour at the company's Newmarket brewery last December, and Lion's purchase of a historic waterfront site for a new Wellington brewery.

Davidson has been with Lion Nathan since 1991 and took over responsibility for the transtasman liquor company's New Zealand brewing arm at the start of this year.

"We have a very clear belief that tap beer is the best way to enjoy beer and we will do whatever we can to make tap beer a large, large part of our business," he said.

The tap beer market was still in decline, but the rate of decline had almost stopped, he said.

Theme bars were "not about trying to promote heightened consumption of beer, but ... trying to promote everything that those brands stand for, and making people enjoy the experience that much more, so they will choose to enjoy the experience again and again."

The company's strategy included improving the way beer was stored and served in pubs.

Lion has said beer prices will rise on June 1 when it adds increased raw material costs to the annual rise in alcohol tax.

Davidson said he expected the Government excise rate on beer to rise by 2.5 per cent to 3 per cent on June 1, in line with the consumer price index.

"On top of that, we've got to have a look at our range of import costs and we've probably done nothing to recover a range of changed import costs over the last three or four years specifically this year malt, but also hops and other ingredients.

"So we'll be looking at this price increase to recover some of those costs as well."

Brian Blake, group general manager of rival DB Breweries, did not respond to queries on whether his company would follow suit.