Sapporo deal strengthens Coopers premium beer grip

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.

By InvestSMART · 20 Jul 2011

By InvestSMART ·
20 Jul 2011

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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 what does it mean for the Australian beer market?

Coopers has signed an agreement with Japanese brewer Sapporo to brew and distribute Sapporo Premium Beer in Australia, New Zealand and the Pacific. The deal moves Sapporo from being imported under licence to being made locally, strengthening Coopers’ position in the high‑growth premium beer segment.

Who will brew and distribute Sapporo beer in Australia under the new agreement?

Coopers will brew Sapporo Premium Beer at its Regency Park brewery in Adelaide, and sales and distribution will be handled by Premium Beverages, the distribution arm that is 80% owned by Coopers.

When and where will Sapporo be brewed for the Australian market?

Under the agreement, Sapporo will be brewed at Coopers’ Regency Park brewery in Adelaide, with production and Premium Beverages’ sales and distribution set to begin from October 1.

How large is Sapporo’s current presence in Australia?

The article notes Sapporo sells about 100,000 cases a year in Australia, and the local brewing and wider distribution aim to expand its South Pacific reach.

How does the deal affect Coopers’ competitive position among Australian brewers?

The Sapporo agreement reinforces Coopers’ grip on the premium beer market; the Adelaide‑based, family‑owned brewer is the largest independent brewer in Australia and has seen strong growth from its premium and craft beer portfolio.

What was Woolworths’ role with Sapporo before the Coopers deal?

Woolworths previously held an exclusive licence to import Sapporo into Australia. Under the new deal, the beer will instead be made locally and distributed by Coopers’ network.

Who signed the Sapporo contract and where was it finalised?

The contract was signed at Sapporo’s headquarters in Tokyo, and was sealed by Coopers’ managing director Dr Tim Cooper alongside Premium Beverages’ managing director Bruce Siney.

Was there any related corporate news in the article about other brewers investors should know?

Yes. The article mentions Foster’s Group expects about $390 million from the Australian Tax Office after the conclusion of its long‑running Ashwick tax litigation and had already received $317 million in progress payments. Foster’s also said it 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.