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AUSTRALIA: Beer losing ground as RTDs cannibalise market share

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RTDs will continue to be a mixed blessing for the drinks industry in Australasia at least, according to a new report by investment bank ABN Amro.

The Global Beer Industry report says that the rapid growth of RTDs is likely to destroy any potential increase in beer market volumes in Australasia in 2002, as they cannibalise beer volumes. ABN Amro says that as RTDs continue to grow rapidly over the next two years 70% of their market-share growth will come at the expense of beer.

Given the excellent growth of these products ABN Amro predicts that brewing companies will increasingly seek to put RTDs through their distribution networks. But the bank warns that "RTDs are therefore as much an opportunity as they are a threat."

Among its other predictions ABN Amro also believed that organic growth in earnings before interest, tax and amortisation across the world's big beer players will be only about 6% each year over the next decade on a compound basis, but consolidation in the sector could trigger an acceleration in that growth rate to 9%.


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