Fosters not in CCA sights

Foster's not in CCA sights

The new head of Coca-Cola Amatil's alcoholic beverages business has ruled out a move for Foster's soon-to-be demerged beer business.

John Murphy, who previously spent 27 years at Foster's, was quoted in the Sydney Morning Herald today (28) as saying that Coca-Cola Amatil (CCA) plans to "grow what we've got organically", adding that CCA has "no interest" in Foster's.

Foster's' announcement this week that it plans to demerge its wine and beer businesses has rekindled speculation that the standalone beer division, Carlton & United Breweries (CUB), would be subject to takeover offers.

CCA, which operates a joint venture with SABMiller in Australia, has been considered a frontrunner to acquire CUB following the demerger, which will not take place until the first half of 2011 at the earliest.

But, Murphy told the Sydney Morning Herald that Australia's beer industry has changed and that "no one will dominate" as before.

CCA and SABMiller have this month completed the construction of a brewery in New South Wales, named the Bluetongue Brewery, as they look to take more share in the beer sector with brands such as Peroni Nastro Azzurro and Miller.

The two firms' joint venture, Pacific Beverages, also has distribution rights to Jim Beam, which counts Australia as one of its strongest markets.

Earlier this month, CCA said that the venture's premium beer portfolio had continued to grow volumes and market share in the first half of its fiscal year and constituted 10% of the premium beer market in Australia.

"With the Bluetongue Brewery about to be commissioned, we will have the manufacturing platform to take our beer business to the next level,” said CCA chief executive Terry Davis.

Foster's Group's share of the Australian beer market slipped below 50% for the first time during the first quarter of 2010, according to recent Neilsen figures. The business has work to do to engage with a new generation of drinkers thirsting for lighter styles of beer.

For more on the Foster's demerger and potential bidders for CUB, click here.