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 Neilsen figures.

The company had a 49.9% market share in the three-month period, down from 55% in 2005, while Lion Nathan had grown from 38% to 40% over the same period.

The decline at Foster’s coincided with a general slowdown in liquor market growth, with annual sales up just 1% overall in the first quarter, compared to 6% growth for the same period in 2009.

Foster’s VB brand was still the biggest beer seller, accounting for 15.1% of sales by volume and 14.7% by value, but sales were down by 8.4% by volume in the quarter. The market-leading low-carb Pure Blonde beer brand fell by 4.2% by volume amid increasing competition.

Credit Suisse analyst Larry Gandler forecast that Foster’s Carlton & United Breweries unit would spend between AUD20m (US$18.2m) to $30m over the next two years in an effort to restore market share, a move that would reduce annual growth in pre-tax earnings to just 2%, compared to 4.8% in 2008-09.

This would probably increase shareholder pressure for Foster’s to split its wine and beer divisions into separate companies, he said. 

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