Scottish & Newcastle toasts Foster's deal
Brewing giant Scottish & Newcastle was today toasting a £309m (€444.1m) deal that gave it full ownership of the Foster’s lager brand in Europe.
S&N has held a licence to brew and sell Foster’s in Europe for the past decade, but worried that its ability to grow sales quickly would be held back if it did not have total control.
Nearly four in every five pints of Foster’s pulled outside of its native Australia are sold to UK drinkers, although sales growth is currently fastest in continental Europe and Russia.
S&N was keen to market Foster’s as a premium beer across all these countries to ensure that it can maintain the sales growth of 6% in the UK and 15% in continental Europe it has achieved over the past three years.
Foster’s has carved out a fan base among pub-goers in Britain through advertising including the Don’t Lose Your Head campaign and new products such as Foster’s Ice.
Today’s deal with Foster’s Group, Australia’s largest brewer and wine maker, means that S&N has outright ownership of the draught, export and ice versions of Foster’s in the UK, Europe, Russia and former Soviet Union states.
S&N, which owns brands such as John Smith’s and Kronenbourg, is currently responsible for around 82% of the total worldwide sales of Foster’s by volume.
Under the terms of its 1995 licensing agreement, S&N paid an annual royalty to Foster’s Group that amounted to £15m (€21.6m) last year. It was also required to spend a minimum amount on supporting the brands.
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