E-Malt.com News article: New Zealand: Japan’s Asahi challenging the duopoly in tap beer market

For the time since the emergence of only two major domestic brewing groups, Japanese drinks company Asahi is challenging the duopoly in New Zealand’s high-margin tap beer market, The National Business Review reported on November, 16.

It is valued at about NZ$900 million and has never before been challenged by a serious third player.

But Asahi’s NZ$1.525 billion September takeover of Independent Liquor, mainly known as a RTD mixed drinks maker, has changed that.

Until now, Independent has supplied a range of local and international brands to liquor store outlets. It had kept out of the on-premise retail tap market because most outlets were tied up by the duopoly of Lion and DB Breweries.

Cost of installation is high and the breweries pay this up-front for pub and bar owners. But with it comes pricing dictated by the brewers.

Independent Liquor chief executive Julian Davidson aims to give owners an alternative with pricing 70-80% below existing levels.

“By entering this market we aim to provide the channel more value, choice and flexibility than they are currently accustomed to,” he says.

“On premise operators we have spoken to have welcomed the competition and we already have strong on premise demand committed to serving our beer.”

Customer service surveying by Coalface Consulting shows Independent has improved its rating from ninth in 2009 to third this year, while DN has dropped to seventh. Lion is in top place.

Independent has rebranded its beer operation as Boundary Road Brewery, which will supply kegs of international premium brands such as Carlsberg and Kingfisher along with NZ Pure, its craft range and Wild Buck New Zealand Ale.

Independent says its two brands in its recently launched craft range are outselling Monteith’s at Foodstuffs.

Davidson says the tap beer move has the backing of Asahi and Boundary has formed a sales and marketing team to work specifically on building sales.

Boundary has already taken delivery of a Krones keg line and the first kegs are set to leave the brewery in early December.


16 November, 2011