Around the World – June 2006

This month’s roundup of news from Europe, Asia, Africa & Australasia

EUROPE

Ireland
Guinness has announced yet another addition to its range in the form of Guinness Toucan Brew. The triple-hopped brew is the second in the Guinness Brewhouse Series of limited-edition stouts that was launched last year in Dublin. Given the popularity of the series so far, Toucan Brew will be distributed to more than 800 outlets nationwide. The beer is identical to regular Guinness – made from the same ingredients, and with the same black body and milky head – but with the addition of a crisper flavour due to the triple-hopped brewing process. The brew, which has the same alcoholic content as regular Guinness, will be available on an ongoing basis. Last month’s launch was supported by outdoor, radio and press advertising.

France
Laurent-Perrier says that its full-year revenues rose by 9% as its key brands outperformed the Champagne market. The company, whose brands include Salon and Delamotte, as well as its eponymous label, claims that volumes rose 5.3%, driving revenues to 208.1 million euros (US$268.1m) for the year to 31 March. It adds that volumes rose by 2% in the Champagne sector. Laurent-Perrier says that it is “particularly pleased” that exports increased their share of sales to nearly 64%. The company’s top-end brands “grew strongly” and now account for 36% of revenue.

UK
Last month saw the responsibility for the UK distribution of Bodegas Ochoa and Bodegas Miguel Merino’s wines move to Pol Roger. Until now, Freixenet has been the companies’ agent in the UK, and cooperation between the companies will continue in a number of countries such as their domestic market, Spain. A spokesman for the Ochoa family explained that the change in the UK was “dictated simply by the style of distribution and coverage we feel is needed to carry our brand forward”. All of the wines from Bodegas Ochoa are made from their own vines and estate-bottled. Bodega Miguel Merino only produces reserva wines.

ASIA

India 

The fastest-growing wine producer in India, Sula Vineyards, intends to have a third winery operational by
early next year, representing an investment of nearly US$1m. The company’s continued steady growth has led to a sales target of 1.5m bottles for the year. The new vineyard will be located near the company’s other vineyards, in the Nashik area. Sula began with 30 acres of vineyards, and launched its first wines in 2000. Sula Vineyards now consists of 300 acres, with the remainder of grapes (80%) drawn from contract farming. The premium producer’s wines are available in top venues in India, as well as a number of key export markets. The company has also broadened its operations beyond domestic production, creating an import business known as Sula Selections.

Japan
According to the Brewers Association of Japan, beer shipments, including low-malt happoshu beers, fell to 48.2% of the market in April. Sales of so-called “third-category” beers – those containing no malt – surged by almost 40% in April to take 28.7% of the entire Japanese beer market. This boost in consumption was in anticipation of a tax hike on third-category beer that took place on 1 May. The overall beer market declined by 5.5% in April to 44.2m cases.More Japanese beer-industry news: Asahi Breweries plans to build its fifth brewery in China next to its existing plant in Huzhou, near Shanghai, which has nearly reached capacity. The company has invested JPY3.7 billion (US$33.6m) in the project, which should be completed in one year’s time.

AFRICA

South Africa

Distell’s packaged-wine exports grew by 18% for the year ending 31 March. In contrast, Don Gallow, Distell’s international director, says bulk exports by the South African wine industry jumped by 24% as exporters tried to curtail supply-chain costs in an increasingly competitive market. He says that, while the UK and Netherlands are the two leading markets for South African wines, Distell is operating over a far wider base. “We are seeing strong growth in Germany and Scandinavia, and at the same time North America is making a major contribution to export sales,” he says. He sees brand equity, a solid distribution and geographical reach as the keys to Distell’s success. The company’s Durbanville Hills brand – sales of which more than trebled in the year to March – is represented by Brown-Forman in the US and UK.

AUSTRALASIA

Australia
Foster’s Group is reported to be close to completing the sale of Rothbury Estate in the Hunter Valley, New South Wales, and Jamieson’s Run in Coonawarra, South Australia. The sell-off, expected to yield around A$20m (US$15m), is part of a winery-rationalisation programme following the acquisition of Southcorp. The company acquired 16 wineries in the takeover and is looking to cut costs at its Southcorp operations. Further asset sales are expected. Foster’s is reportedly intending to retain the rights to the Jamieson’s Run and Rothbury Estate brands. It is not clear who the buyers are, although a consortium including James Yates, who operates the Chardonnay Lodge Resort in Coonawarra, had allegedly tabled a bid of A$10m for Jamieson’s Run.

Elsewhere, the country’s largest family-owned companies are looking at ways to cooperate more closely in order to compete with the likes of Foster’s Group and Hardy Wines. Bruce Tyrrell, MD of Tyrrell’s Wines, says, “We’re looking at other things, like logistics.” Ross Brown, chief executive of Brown Brothers, says that the cooperation “makes sense”.
He adds, “We’ll cooperate, but then beat each other’s brains out in the marketplace.”

db June 2006