Newspaper article The Canadian Press

Beer War Brewing in Canada as Large Rivals Fend off Push by SABMiller

Newspaper article The Canadian Press

Beer War Brewing in Canada as Large Rivals Fend off Push by SABMiller

Article excerpt

Beer war brewing in Canada

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MONTREAL - A beer war is brewing in Canada as SABMiller seeks to grow its presence following its divorce from partner Molson Coors.

Just four months after forming a Canadian subsidiary, the world's second-largest brewer is targeting dominant rivals Molson Coors (TSX:TPX.B) and Inbev's Labatt.

"To say that we're going to overtake the two big boys would be a bit of stretch so I would be happy to settle in at No. 3," said general manager Paul Verdu.

To get there, SABMiller Canada hopes Miller Lite -- available in Ontario and Newfoundland until 2010 -- will steal market share from dominant players Coors Light and Bud Light.

Miller Genuine Draft, previously sold for about 20 years through a partnership with Molson Coors Canada, and premium brands such as Peroni, Pilsner Urquell and Grolsch will also be sold in Canada, though primarily outside Quebec.

All of SABMiller's products will be imported from the United States or Europe.

Global demand for light beers has been growing. It accounts for about half of total beer sales in the U.S., but less than 30 per cent in Canada.

Beer market specialist Plato Logic estimates light beers account for 20 per cent of total beer volume and have been growing 2.1 per cent annually over the past five years.

Verdu sees opportunities for the "original" light beer -- Miller Lite -- if only the beermaker can convince Canadian drinkers to give it a try.

The company plans to spend heavily to promote its brands and hopes to get help by not charging Ontario bars and restaurants the hefty premium they face from all other brewers except Brick Brewing's Waterloo brand.

The move, which will amount to establishments paying the same amount that consumers fork out at the Beer Store, is an incentive for bars and restaurants to carry more SABMiller brands, says James Rilett, Ontario vice-president of industry association Restaurants Canada. …

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