Australia: SABMiller’s flagship VB beer reports first gain in sales for more than a decade

Brewing major Foster's has reported further declines in sales for the December quarter despite its flagship Victoria Bitter reporting its first gain in sales for more than a decade.

Parent company SABMiller, which acquired Foster's for $12.3 billion in December 2011, on January, 22 reported a 4 per cent decline in underlying sales by volume for the three months to the end of December compared with the same period a year earlier.

However, the sales decrease was in line with the overall beer market, and SAB noted the pace of decline had slowed from the 8 per cent fall seen in the September quarter.

Including the loss of third-party brands Foster's had previously brewed under licence such as Corona, Asahi and Stella Artois, sales were down 15 per cent.

All foreign brewers who previously licensed their brands to Foster's used "change of control" provisions in their contracts to move to other brewers -- mostly Lion -- following the SABMiller takeover.

Coca-Cola Amatil is hoping to poach a number of these brands from Lion once its brewing joint venture with winemaking group Casella is allowed to enter the Australian beer market.

CCA is locked out of the Australian beer sector until December 16 under the terms of an agreement with SABMiller, negotiated during the 2011 sale of CCA's stake in brewing joint venture Pacific Beverages to the British company.

The highlight of the result was a 2 per cent gain in sales volumes of VB, boosted by the company's decision to restore its alcohol content to its original 4.9 per cent, having been cut to 4.6 per cent in 2009 to save on excise.

SAB said the sales boost was also the result of "improved retail engagement," suggesting the company may have cut its prices in order to boost volumes.

The sales increase was a significant turnaround for VB, which 10 years ago accounted for one in every four beers sold in Australia but now has a market share of closer to 12 per cent.

Sales of the brew have declined in every quarter for the past decade, including a 13 per cent fall in the September quarter.

SABMiller, which is listed on the London Stock Exchange, reported a 2 per cent increase in global beer sales by volume, while revenue was up 8 per cent thanks to price hikes and a consumer shift to premium brews.

24 January, 2013