SABMiller has terminated the contract of its Italian subsidiary with Anheuser-Busch to brew and distribute the Budweiser brand in the country. The agreement, which has been in place since 1995, has not been renegotiated following SABMiller's acquisition of a 60% stake in Peroni in May 2003.

Instead Birra Peroni (Peroni) will launch Miller Genuine Draft in the Italian market towards the end of 2003.

Peroni Managing Director Harry Langley said: "The import market in Italy, in particular that for major international brands, is growing ahead of trend. Joining the SABMiller Group has created significant opportunities for Peroni to exploit the company's strong portfolio of international brands."

Peroni's agreement with Anheuser-Busch to brew and distribute the Budweiser brand in Italy will now be terminated with effect from November 2003. In the year ending December 2002, Budweiser domestic Italian sales accounted for 173,000 hectolitres, or approximately 4% of total Peroni volumes.

Anheuser-Busch's European unit said it had now signed a licensing agreement with Dutch brewer Heineken for the Italian market.

Heineken will brew, market and distribute Anheuser-Busch's Budweiser and Bud brands.