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New Zealand's relatively small beer market may be shrinking but it still represents a growing opportunity for international brewers seeking to introduce their products to local drinkers. Although consumption dropped by a further 2% last year, confirming the downward trend of the previous decade, imports rose to account for 7% of sales as consumers continued to exhibit a growing preference for premium international brands.

A new report from beverage industry analyst Canadean, shows that per capita consumption now stands at around 80 litres, having fallen by a quarter since the early 1990s. At the same time consumer demands for greater choice are being reinforced by recent legislation enabling supermarkets to sell beer. This has led to an increase in impulse purchasing, from which high value imported bands are tipped to benefit in the medium term future.

Indigenous brewers have also been fast to respond to the changes which are benefiting overseas suppliers. Lion Breweries, which holds more than half of the market, has reacted to shrinking demand by introducing innovative brands, launching speciality draught beers, developing new brews, pioneering the supermarket trade, developing Internet ordering and direct delivery. The company has also exploited the shift away from full strength beer to light beer and premium products by introducing a premium light beer under the Steinlager label.

Dominion Breweries, New Zealand's second largest brewer, revamped the image and packaging of DB Gold, the most popular beer in New Zealand, and consequently saw volumes up by a third in 2001. Dominion Breweries also recognised that the fragmentation of the market, due to the increasing number of licensed premises, created a need for specialised distribution systems. Total national coverage for packaged and keg beer has been achieved by means of alliances with six wholesale distributors. On premise customers can now choose their wholesale supplier and in many cases will be able to get all their alcohol and specialised beverage requirements from one source. Both Lion and Dominion Breweries have also made extensive use of sponsorship deals to promote their products.

Aside from imports, the remainder of New Zealand's beer consumption is accounted for by a commercial home brew market and a number of micro breweries, that include niche and boutique operators associated with old pubs or restaurants. These have all seen volume and market share dip in recent years.

Looking to the future, the report indicates that there will be no let up in the need for innovation and adaptation among New Zealand's beer suppliers. Annual consumption will continue to fall and by 2007 it will almost be a billion litres less than in the early 1990s. There is however, positive news for local producers, since although imports will continue to rise, exports are already recovering in the wake of the Asian currency crisis, thanks to aggressive marketing and the weak New Zealand dollar. Overseas sales are expected to maintain their improvement in the medium term, while international brands produced under licence in New Zealand may also find their way into the Australian market.


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