Beer producer Cervecería Austral is to focus on the Chilean market and scale back its operations in Argentina in response to that country’s recent economic crisis.

The company will temporarily suspend its operations in southern Argentina, although it will still maintain market presence in Tierra del Fuego. Austral hopes to reopen operations as soon as the economic situation in Argentina improves.

"We became uncompetitive," General Manager John Kimber said. "Products in Argentina are selling for around a third of their value."

Austral, which is owned by Chilean brewing giant CCU and the Chadwick family, hopes to reach a 15% share of Chile’s premium market in 2003, equivalent to sales of 70,000 hectolitres.