Brewer SABMiller announced on Tuesday that its United States subsidiary, Miller Brewing Company, plans to enter into a ten-year licensed-brewing partnership with Foster’s Group.
Under the new arrangement, brewing of the Foster’s Lager and Special Bitter brands sold in the US will transfer from Molson Coors of Canada to Miller’s breweries in Fort Worth, Texas, and Albany, Georgia, in November 2007.
Forming part of Miller’s strategy to migrate its portfolio to higher margin segments, the move to US production will reduce Foster’s freight costs, enabling the business to put additional investment behind the brand to drive long-term growth, SABMiller said in a statement.
It will continue to be distributed and marketed in the US through Foster’s USA, a joint venture between Miller and Foster’s Group.
Miller and Foster’s Group have been sales and marketing partners in the US since 1993. The joint venture included Molson until 2001, when the Canadian brewer reduced its role to production of the Foster’s beer sold in the US. In August 2006, SABMiller announced that it would acquire all of Foster’s assets in India for $120-million, including the rights to the Foster’s brand in the territory.
“Today’s [Tuesday] announcement is a critical step as we partner with Foster’s Group to position this brand as the preferred trade-up for mainstream beer drinkers who want a truly unique beer experience. Foster’s has great growth potential and we’re excited about the opportunity to maximise Foster’s growth in the US,” said Tom Long, Miller president and CEO. — I-Net Bridge