Brewing giant Lion Nathan has said that revenue increased by 7% in its first quarter, thanks to a strong beer sales rise in Australia.

Beer sales in Australia rose by 15% in value and 9% in volume, to 221m litres, for the three months ended 31 December, Lion Nathan said in a trading update today.

The rise suggests that Australia's beer market remains in relatively good shape in the face of a weakening global economy.

Lion Nathan said that beer market growth in the country was 2.3% for the quarter. It said that consumers have continued to move towards premium and low-carb categories, adding that its XXXX Gold, Tooheys Extra Dry, James Squire and Hahn Super Dry brands performed particularly well, as did newly acquired Tasmanian business, Boag's.

Lion Nathan's wine business proved more difficult in the first quarter. Volume sales rose by 3%, but net sales dropped by 10%.

"The fine wine market has declined dramatically as a result of the current economic conditions, particularly in the UK and US but also in Australia," the firm said.

It said that this, together with damage to vineyards from Australia's recent bushfires, means that wine results are "likely to be down significantly" for the full-year. The group added that wine represents 3% of earnngs before interest and tax, and that the decline is "not material" to the group-wide outlook.

Lion Nathan's New Zealand business grew volumes by 1% in the first quarter, as growth in wine and spirits offset flat beer volumes.