New Zealand, Wellington: New Zealand brewer DB Breweries Ltd. said on May 17 it will no longer produce Heineken beer for the Australian market after Lion Nathan Ltd. and Dutch brewer Heineken NV agreed to establish a joint venture in that country. "Although timing is yet to be confirmed, it is likely that DB will continue its current production arrangement until the end of this year," the company said in a statement to the stock exchange. “While DB, which is part-owned by Heineken, will continue to brew and sell Heineken's product in New Zealand, the deal with Lion means DB loses a small but lucrative export venture,” a New Zealand media said in a statement.

DB Breweries has been producing Heineken keg beer for Australia for five years as part of a deal with Heineken NV. The exports of Heineken contributed NZ$800,000 to earnings before interest and tax in DB Breweries' last financial year.

DB's total pre-tax earnings were $35.7 million last year and the company said yesterday that Heineken keg sales to Australia were just one part of its export business. "It's very small in the scheme of things", said managing director Brian Blake.

Export volumes of other DB brands continue to grow in Australia and other markets, DB said in a statement. DB is 76 % by Singapore-based Asia Pacific Breweries (APB) Group, which in turn is 42.5 % owned by Heineken. Until now, bottled Heineken sold in Australia has been imported from Europe.

19 May, 2004