Australia: Major brewers are focusing on the premium beer segment as regular beer sales are flat and craft beer sales could double in the next four years

Sales of regular beers are flat but sales of microbrewery beers could double in the next four years. Microbrewery beers are part of the premium beer segment, which is growing at 14 per cent annually, accounting for 9 per cent of sales by volume and 15 per cent by value. Some analysts reckon this segment will be worth 13.5 per cent of the total market by volume by 2008, The Australian posted August 25.

Because of the growth, the major brewers are focusing on the premium beer segment where overseas products such as Heineken, now brewed in Australia, have grabbed market share. And within this segment they are maintaining their own stakes in microbreweries.

The volumes produced by microbreweries are tiny compared with the 1.76 billion litres of beer sold in Australia each year. But because of the potential, Lion Nathan and CUB are maintaining their stakes in the sector.

CUB owns the West Australian-founded Matilda Bay Brewery, and the beers are available through selected CUB pubs. Last year, Matilda Bay launched its Garage Brewery in Victoria, allowing it to experiment with new and innovative beers.

Lion Nathan is a sleeping partner with Fremantle-based Little Creatures. It increased its 20 per cent stake in the company to 34 per cent post IPO and maintains one seat on its board (although the company operates and distributes independently to Lion).

Lion Nathan also owns the Malt Shovel Brewery, which is behind the James Squire brand. Available through Lion Nathan pubs, it also operates its own pub-base microbreweries.

Meanwhile, the microbrewery movement is capturing the palates of consumers. Microbreweries contribute AU$295.5 million to the Australian economy. If they continue their current growth curve, the market will be worth AU$501 million by 2010.

Collectively, Australia's microbrewers are lobbying the federal Government to change the excise exemptions on beers. Excise exemptions are limited to breweries producing 30,000 litres a year or less. The microbrewers claim that if the Government restructures excise thresholds the market would be worth AU$783 million by 2010.

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