Premium and mid-strength beers will continue to take share from traditional full strength products in Australia's shrinking beer market, according to data out today.

In a report into Australia's beer market, analyst Canadean said premium products and imports are increasing their shares of Australia's shrinking beer market. Both total volume sales and per capita consumption fell during 2002, but sales of premium beers rose by nearly one sixth and imports by more than a fifth.

Although imported beers only amount to less than 3% of consumption, their fate is closely intertwined with that of the premium segment, which has doubled volume in the last four years.

"The growing presence of imports reinforces an emerging behavioural pattern among a set of premium beer consumers similar to wine connoisseurs," said Canadean. "Despite this the premium market continues to be overwhelmingly supplied by domestic producers, both major mainstream players and niche and boutique breweries. These have developed a new focus on innovation in an attempt to get a strong grip on the growing market. This approach seems to have had some success since most consumers are now said to see local premium products as value for money and quality alternatives to imports."

The Australian brewing industry, says the report, is mature by global standards but faces a number of issues. The fall in consumption from the peak period of the 1970s, which is blamed on changing attitudes towards health and the ongoing growth of the domestic wine industry, has been arrested in recent years. This is due to the introduction of light alcohol beers, the development of the premium and mid strength sectors, and generally improving prosperity. However, the market has never fully recovered due to taxation changes and competitive pressure from low strength spirits pre-mixes.

"Out of this conflicting situation Canadean foresees premium and mid strength beers continuing to grow mainly at the expense of traditional full strength products," the report said.

Turning to distribution and packaging Canadean claims that lifestyle changes, including more home entertainment and tougher drink driving laws, have placed off-premise distribution on a slight upward trend. Bulk distribution is slowly diminishing and its lost share has been seized by bottles in the premium and mid strength sectors and by cans at the cheaper end of the market. Almost half of volume is now held by single-serve glass bottles. Since drinking from bottles in pubs and other catering establishments is acceptable in Australia single-serve glass bottles have particularly benefited from the increased popularity of on premise consumption of bottled premium beers.

In recent years the market has rationalised into two main brewers, Lion Nathan and Fosters, each with an increased focus on competition based around brand values and higher margin premium beers. However, the country's other two smaller brewers, Boags and Coopers are said to be gradually stealing share, as are a number of niche breweries and brewpubs.