Although the news spotlight in Australia's liquor industry remains focussed on wine, it is beer which is performing strongest.

Despite the inroads made by ready to drink mixed products, Foster's and Lion Nathan which hold a virtual duopoly with 95% of the beer market have achieved their strongest beer growth in 20 years.

The small family owned Coopers has reported similarly positive results, in sales terms, a 16.4% leap in financial 2003/04.

Foster's and Lion Nathan earlier embarked on aggressive programme of winery acquisitions but in general terms earnings have been well below hopes.

Regarded as a mature market, Fosters' Carlton and United Breweries growth of 8.6% in the six months to last December and Lion's 8% in beer came from cost savings, price increases and higher margins together with a surge in the more profitable premium end of the business which currently accounts for an expanding 9% of the total. To capitalise on this Lion Nathan has signed Australian deals with Beck's and Heineken.