‘Much ado about nothing’, says Foster’s of Guinness loss

15 June, 2012 by

By James Atkinson

Carlton & United Brewers' loss of the Guinness beer contract to rival Lion is of little concern, the brewer says.

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Diageo and Lion this week announced a commercial agreement that gives Lion the right to manage the brewing, marketing and distribution of the Guinness and Kilkenny brands in Australia.

Guinness and Kilkenny, which will continue to be owned by Diageo at a global level, have been previously manufactured by Foster's.

The contract loss has been portrayed in mainstream media reports as yet another body blow to CUB, after it relinquished Carlsberg to Premium Beverages and lost the lucrative Corona deal to Lion.

But a CUB spokeswoman stressed to TheShout that while the company has manufactured these products for Diageo under a "toll arrangement", it is not involved in the marketing or sales of them.

"This change will have limited impact on our manufacturing given the small volumes involved," she said.

Lion Beer, Spirits & Wine Australia managing director James Brindley meanwhile said the brands strengthen the brewer's international premium portfolio, with Lion "now offering six of the top ten beers in this fast growing segment".

"Guinness and Kilkenny have fantastic heritage and we are delighted to have the opportunity to further grow these brands in Australia," he said.

The new agreement extends the partnership Diageo has with Kirin (Lion's parent company) in the Asia-Pacific region. Kirin is Diageo's distribution partner in Japan, and Lion already brews and distributes Guinness and Kilkenny in New Zealand through a pre-existing relationship with Diageo.