Amatil predicts things (premium beers) go better with Coke

Outgoing Coca-Cola Amatil chief executive Terry Davis expects his successor, Alison Watkins, to endorse the bottler's return to the $11 billion beer market, even though analysts believe beer is unlikely to generate profits for years.

Outgoing Coca-Cola Amatil chief executive Terry Davis expects his successor, Alison Watkins, to endorse the bottler's return to the $11 billion beer market, even though analysts believe beer is unlikely to generate profits for years.

"The logic for us getting into the premium beer business is still the same as it was two years ago," Mr Davis said on Tuesday as a two-year non-compete agreement with former joint venture partner SABMiller came to an end.

"We become more relevant to our licensed customer base and by becoming more relevant to our licensed customer base we sell more Coke - I can't see why there would be any change to that strategy," he said.

"It would have been a surprise that Alison would have taken the job if it's not the right strategy. Until I cease to be the CEO [in August], we'll continue full steam ahead."

CCA has converted a $46 million loan to brewing partner Casella Wines to a 50 per cent equity stake in the Australian Beer Company and has started selling a range of beer and cider brands made by Casella, Molson Coors and the US brewer's craft beer business, Blue Moon - tapping its existing customer base and relationships with the major retailers to win sales.

Early next year, the joint venture partners will add additional brews from US craft beer makers Samuel Adams and The Boston Beer Company, Rekorderlig Cider from Sweden and Fiji Bitter and Vonu beer from CCA's breweries in Fiji and Samoa.

CCA has also held talks with global brewers such as Mexico's Grupo Modelo, Anheuser-Busch InBev, Heineken and Carlsberg with the aim of snaring distribution agreements currently held by Lion, SABMiller and Coopers.

"The brands we launch today won't be the last," Mr Davis said.

He said the alcoholic beverages business would be profitable in the first year and would "easily" achieve its cost of capital, justifying CCA's relatively small investment.

Related Articles