The potential $9.5 billion takeover of Foster’s by SABMiller could provide an unexpected boost for Australia’s small independent breweries as drinkers move to locally produced beer labels.
The Anglo-South African brewer has pitched Foster’s a friendly $4.90-per-share cash offer, just two months after the Melbourne-based business demerged its much-maligned wine business.
The market sees the SABMiller offer as too low, with some analysts tipping a 10% sweetener will be required to get an offer across the line. But most commentators say it is only a matter of time before a suitable offer emerges.
Mexico’s Grupo Modelo and North America’s Molson Coors have been named as potential joint-bidders for Foster’s, the 157-year-old company behind Victoria Bitter, Carlton Draught and Crown Lager. Japan’s Asahi is another name bandied about as a potential buyer.
So what would a takeover mean for independent brewers?
Melbourne-based craft brewer Mountain Goat is unsure whether a foreign takeover would prompt Australians to shift to locally owned brands, but notes its sadness that another iconic Australian brand could go overseas.
Co-owner Dave Bonighton told SmartCompany that while Mountain Goat’s market share is tiny, it ultimately looks to entice drinkers of mass-market labels.
“Our task is to bring beer drinkers over to really individual beers,” Bonighton says.
“We’ve got so much scope; there are so many people who love our kind of beer but don’t know it yet.”
A spokesman for Coopers says a takeover would leave it as the largest Australian-owned brewer.
Coopers, a privately held South Australian business, has 3.6% market share.
Stressing it was too early to comment on the deal, the spokesman said Coopers was continuing to grow, and wore its history on its sleeve.
“It has marketed itself as ‘You can still meet a Cooper’, so obviously they do push very strongly the fact that they’re locally owned.”
Foster’s is behind seven of Australia’s top 10 beer brands. Together with Lion Nathan (now owned by Japan’s Kirin), it dominates Australia’s multibillion-dollar beer sector, although it has recently seen a joint venture between Coca-Cola and SABMiller nab close to a 10% share of the premium market.
Nonetheless, independent brewers have managed to eke out a bigger market share over the past decade, capitalising on an increased appetite for boutique beers.
Little World, maker of Little Creatures in Western Australia, could not be contacted this morning.
Smart Company is a sister publication to The Mandarin, catering to Australia’s entrepreneurs, small and medium business owners and business managers.
