Two Dogs, the Australian producer of alcoholic lemonade and orangeade, part of the French Pernod Ricard group, is to spend $A3 million ($1.56m) expanding its South Australian production facility and developing new products. This follows a $A2.5m ($1.92m) - expansion last year.

Making the announcement Two Dogs managing director Duncan McGillivray said Japan had now become the biggest export market with annual sales of 1.5m cases worth $A133m ($69.2m). Two Dogs is also produced in Britain and the US.

Duncan McGillivray began producing the alcopop in 1995 with surplus and otherwise unmarketable lemons from South Australian citrus growers. Production, for domestic consumption, in the first year was 37,000 cases.