With Diageo's ready-to-drink (RTD) spirit brands in the US facing an uncertain future in the light of proposed new regulations announced this week, the British-based spirits group has unveiled plans to boost sales of its RTD products in another key market, Australia.
Diageo has teamed up with Carlton & United Breweries (CUB), the Australian brewing, leisure and spirits division of the Foster's Group, which will exclusively produce and distribute the company's full range of draught beer and draught pre-mix spirits products in Australia.
Under a new 10 year agreement, CUB will for the first time manage production and distribution of Diageo Australia's draught pre-mix spirits portfolio, which currently comprises the highly successful Bundaberg Rum and Cola and Johnnie Walker and Cola brands.
CUB has been the Australian licence holder for Diageo's Guinness, Kilkenny and Harp draught beer brands for several years, and is also responsible for the importation, distribution and sale of Guinness and Kilkenny in cans. Under the new arrangements which will be effective from 30 April 2003, CUB will continue to produce and distribute Guinness and Kilkenny on draught, as well as importing and distributing Harp on draught and producing Guinness Extra Stout in bottles and cans.
Diageo Australia will assume responsibility for the marketing and promotion of all its draught products, as well as the importation and promotion of all packaged products (Guinness Draught in cans and bottles and Kilkenny Irish Ale in cans) and sale of Guinness Extra Stout in bottles and cans.
"We're thrilled to expand our long standing partnership with Diageo for another ten years and also to include draught pre-mix spirits," said CUB managing director Trevor O' Hoy. "This agreement gives us the opportunity to supply the increasingly popular draught forms of two great pre-mix spirit brands nationally."
His sentiments were echoed by Diageo Australia's managing director, John Pollaers. "The new structure will allow us to expand our draught capabilities and to build the new category of draught pre-mix spirits in the Australian market."
Pre-mixed spirits have been around for many years in Australia, the country which was also the birthplace of alcopop brands such as Two Dogs, with many companies producing brands there long before launching them in their home market - such as Jim Beam, whose whiskey and cola brand is about to be launched in the US after many years on sale Down Under.
But draught versions of these premixes are still rare, and the deal with CUB should see a major increase in sales of whisky or rum and cola on tap throughout the country. How long it will take for these draught variants to reach the rest of the world remains to be seen, but a successful expansion of the Antipodean business will surely accelerate the pace of international growth.