Sapporo deal strengthens Coopers premium beer grip

Family-owned independent brewer Coopers Brewery strengthens its grip on the high-growth premium beer market.

By InvestSMART · 20 Jul 2011

By InvestSMART ·
20 Jul 2011

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Family-owned independent brewer Coopers Brewery strengthens its grip on the high-growth premium beer market.

FAMILY-OWNED independent brewer Coopers Brewery has strengthened its grip on the high-growth premium beer market, inking a deal last night with Japanese brewer Sapporo to brew and distribute the brand in Australia.

Woolworths previously held an exclusive licence to import Sapporo, but the beer will now be made in Australia for the first time and sold throughout Australia, New Zealand, and the Pacific Islands using Coopers' distribution operation. The deal comes as brewers fight it out for control of premium beers, especially imports, as local mature brands, such as VB (brewed by Foster's) and Tooheys (brewed by Lion Nathan), experience flat sales.

Adelaide-based Coopers remains the largest independent brewer in Australia. It has experienced strong growth from its portfolio of premium and craft beers.

A contract between Coopers and Sapporo was signed last night at Sapporo's headquarters in Tokyo, with Coopers managing director Dr Tim Cooper and Premium Beverages managing director Bruce Siney in Japan to seal the deal.

Premium Beverages is 80 per cent owned by Coopers and handles the beer company's distribution operations.

The new deal is part of a push by Sapporo to expand its reach in the South Pacific. The beer sells about 100,000 cases a year in Australia.

Under the terms of the agreement, Coopers will brew Sapporo Premium Beer at its Regency Park brewery in Adelaide, with sales and distribution to be handled by Premium Beverages, from October 1.

?Foster's Group said it expected to receive about $390 million in total from the Australian Tax Office after the conclusion of its long-running Ashwick tax litigation in May. It had received progress payments so far of $317 million from the Tax Office.

However, Foster's does not expect to be able to frank its final 2011 dividend and will be unable to frank subsequent dividends until it resumes paying Australian tax.

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Frequently Asked Questions about this Article…

What is the Coopers–Sapporo deal and why does it matter for investors?

Coopers Brewery signed a contract with Japanese brewer Sapporo for Coopers to brew and distribute Sapporo Premium Beer in Australia. For investors, the deal signals Coopers strengthening its position in the high-growth premium beer segment and expanding its product portfolio and distribution reach across Australia, New Zealand and the Pacific Islands.

Where will Sapporo Premium Beer be brewed and when does production start?

Under the agreement, Sapporo Premium Beer will be brewed at Coopers’ Regency Park brewery in Adelaide. Sales and distribution through Premium Beverages are scheduled to begin from October 1.

Who will handle distribution of Sapporo in Australia and the Pacific?

Premium Beverages will handle sales and distribution. Premium Beverages is 80% owned by Coopers and uses Coopers’ existing distribution operations to roll out Sapporo across Australia, New Zealand and the Pacific Islands.

Does Woolworths still import Sapporo into Australia?

No. Woolworths previously held an exclusive licence to import Sapporo, but under the new deal Sapporo will be brewed locally in Australia by Coopers and distributed by Premium Beverages.

How large is Sapporo’s current presence in Australia?

The article notes Sapporo sells about 100,000 cases a year in Australia, and the new local-brewing deal is part of Sapporo’s push to expand its reach in the South Pacific.

How does this deal affect Coopers’ market position in the premium beer sector?

The agreement strengthens Coopers’ grip on the premium beer market. Coopers is already the largest independent brewer in Australia and has experienced strong growth from its premium and craft beer portfolio—adding Sapporo supports further expansion in high-growth premium segments.

What broader industry context does the article give about premium and mature beer brands?

The article says brewers are competing hard for control of premium beers, especially imports, because some established local brands (like VB and Tooheys) are experiencing flat sales. That trend is driving interest in premium and imported labels.

What other corporate news in the article might interest beverage investors, related to Foster’s Group?

The article reports Foster’s Group expects to receive about $390 million in total from the Australian Tax Office after concluding long-running Ashwick tax litigation, having already received $317 million in progress payments. It also states Foster’s won’t be able to frank its final 2011 dividend or subsequent dividends until it resumes paying Australian tax.