In the latest twist in Australia's increasingly intense beer war Foster's has been replaced as the sponsor of the country's leading horse race, the Melbourne Cup, by arch-rivals Lion Nathan.

Lion Nathan unveiled details yesterday of a five-year deal worth A$30 million that will see Australia's richest horse race renamed from the Foster's Melbourne Cup to the 'Tooheys New' Melbourne Cup.

Lion Nathan Australia managing director Walter Bugno said the brewer wanted to tie its key brands to an "iconic" Victorian sporting event.

Two hundred beer taps at the Flemington racecourse have already been switched to Tooheys. And the brewer is hoping the deal will increase its market share in the Victorian market, traditionally a stronghold for Foster's. Last year Lion Nathan managed to increase its market share in the state from 11.8% to 13.7%.

The deal will also see Tooheys as the principal sponsor of the Victorian Racing Club and the Flemington course. It will have sole rights to the Melbourne Cup and an extension option for another three years.