Government regulations, health concerns, competition from wine and ready-to-drink spirits, and a rise in imported beer relative to export growth have been responsible for the beer market remaining stagnant during 2006-07.
During this period, a growing trend in consumption of higher-priced premium beer was evident, with sales of premium brands growing 15-20% from the previous year.
In fact, in 2006-07 beer industry revenue grew by 2.4% to $4129 million as a result of pricing gains from greater consumption of higher priced premium beers as opposed to standard beer.
Demand for premium and boutique beers also led to an increase in imports from Europe and the US, growing by an average annual rate of 9.4% over the last five years.
However, growth has slowed due to Lion Nathan locally brewing Heineken.
The establishment of Pacific Beverages, a joint venture between Coca-Cola Amatil and SABMiller that will distribute a range of SABMiller’s premium beers including Italian beer Peroni Nastro Azzurro and US beer Miller Genuine Draft, will also increase competition from imports.
Government regulations and health concerns have led to a decrease in beer consumption, making packaging, brand values, advertising campaigns and the introduction of new product segments such as low-calorie beers increasingly important in securing market growth.
The decline in consumption of standard beer has also resulted in major beer producers looking to the export market for growth.
As a result of Asia’s growing beer brewing industry, Australian beer and malt exports have increased over the last five years by 6.9% per annum, amounting to $348 million in 2006-07.
In the future, IBISWorld has predicted that price increases and growth in premium beer sales will continue to drive revenue growth, anticipated to be worth $4.74 billion in 2011-12.
Wine exports continue to be the largest market for Australian wine manufacturers, rising from 42.1% to 54.3% of total revenue over the past five years.
However, global over supply of wine since 2003 has led to heavy discounting and a rise in the number of low margin clean-skin wines on the market.
Consolidation in downstream liquor retailing has also led to market-wide discounting.
The wine manufacturing industry has grown at an average annual rate of 1.4% since 2001-02, amounting to $5212 million in 2006-07.
IBISWorld has predicted that in 2011-12, wine manufacturing industry revenue will increase by an average annual rate of 2.6% as a result of export growth.
However, the domestic market is expected to remain stagnant.
Industry at a glance: beer and malt manufacturing
Industry revenue: $4129 million (2.4% growth)
Export revenue: $348 million (6.9% growth)*
Import revenue: $111 million (9.4% growth)*
Major players: Foster’s Group, Lion Nathan, Coopers Brewery, ABB Grain, J Boag & Son
* Estimated figures Source: IBISWorld
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