Australia: Coca-Cola Amatil strikes a distribution deal with Molson Coors in Australia

As part of its strategy to re-enter the A$11 billion beer market in Australia, Coca-Cola Amatil has struck a deal that will see it distribute a number of Molson Coors’ brands in Australia, including Carling, Coors Light and Blue Moon, Business Spectator reported on August 20.

The company has been keen to re-enter the market since selling its stake in the Pacific Beverages joint venture with SAB Miller in 2011, with the market holding a A$1 billion profit pool and enormous margins.

However, while these brands only account for small sales volumes in Australia, analysts and investors could be sceptical. This is because the deal could take a very long time to produce substantial results for CCA.

As highlighted by The Australian Financial Review, Merrill Lynch is particularly sceptical of the company’s push back into the beer market, suggesting that the move could reflect past results achieved by the company when it was with one of the world’s largest breweries. Earlier this year, an analyst from the group said, “It took Coke nearly five years to establish a little over 1% market share in Australian Beer”. In comparison, Molson Coors is the world’s seventh largest brewer.

However, CCA’s CEO Terry Davis is confident of the company’s return back into the market.

21 August, 2013