SABMiller is seeking to end its licensing agreement with Coors in Canada

SABMiller is seeking to end its licensing agreement with Coors in Canada

SABMiller can boost its performance in Canada by breaking away from Molson Coors and upping its marketing efforts in the country, according to an industry monitoring company.

Miller Brewing Co, a SABMiller subsidiary, has cancelled its licensing contract with Molson Coors, due to end in July. The North American brewer, however, is fighting the termination with a lawsuit against the move.

But, Chuck Ellis, president of Restaurant Sciences, which tracks on-trade sales in the US and Canada, believes this is the right move by SABMiller. 

"Of the top-25 on-premise beers in Canada, only Budweiser has a double-digit market share," he said yesterday (4 March). "The Canadian market is an intensely competitive landscape with 25 brands having on-premise share-of-sales of 1% or greater." 

He added: "If SABMiller can combine good consumer marketing with a new distribution portfolio, they can improve on the position they had with Molson Coors.” 

According to Restaurant Sciences figures, based on beer brands' Q4 performance in Canada, Miller Genuine Draft was ranked 12th, behind five other beers distributed by Molson Coors. 

Ellis said there is an opening for a third “strong” beer distributor in Canada. 

Miller's brands represent around 15% of Molson Coors’ total group volumes.

To read just-drinks' commentary on the situation, click here.