Yellow Tail maker enters beer market

Casella Wines, the family-owned wine company behind Yellow Tail, has moved into the beer market in Australia.

Daniel and John Casella with their new Arvo beer

Its new beer, unveiled last week and called Arvo, will be made at a specially built brewery at the family site in New South Wales, which has the capacity to pump out 300,000 hectolitres, or about 50,000 cartons.

In Australia the move is seen as the first significant threat to the foreign-owned brewers that control 90% of the Australian beer market – Lion Nathan owned by the Japanese conglomerate Kirin and Foster’s owned by the London-based SABMiller.

Casella is however going to focus on the premium beer segment that, over the past few years, has had far stronger growth rates than standard beer.

In reality the company is hoping the beer will take a 7% share of Australia’s beer market.

”It’s a premium beer. It’s not the bottom end, and it’s about the product, the flavour and that here is an Australian offering in that price category, which I think is really poorly lacking at the moment,” managing director John Casella said.

Arvo beer, produced in six packs and slabs of 24, will sell for between AU$44.99 and AU$49 a slab and there is already a deal in place to sell its Arvo brand to supermarket chain Woolworths.

The brewery, which sits alongside the Yellow Tail winery, began producing its first batch of beer last week.

The Casella beer operation, which can produce 35,000 bottles of beer an hour, joins Coopers Brewery in South Australia as the only significant Australian-owned brewer.

Casella said there were no plans to tackle the export beer market. ”There is no need for us to dilute ourselves by selling the beer overseas with a high Australian dollar and so much potential in the Australian market.”