Brewer Foster's Group will remain the market leader following reports last week Foster's had lost a three per cent share of the $3.8 billion Australian beer market in recent years, ratings agency Moody's has said.
"Given the mature nature of the Australian beer market and its competitive landscape, any loss in market share is bad news for a brewer, especially in a market that has shown positive, albeit modest, growth," Moody's vice-president Ian Lewis said.
"But in the case of Foster's, we do not see the market share decline as a major credit concern given the strength of its core business and its ability to innovate through branding."
Foster's plans to apply greater focus to the beer portfolio will support its credit profile, provided it doesn't sacrifice a lot of its profit margin for volume growth, it says.
Moody's also found that the effect of the market share loss was mitigated by the structural nature of Australia's beer market.
Essentially its a duopoly between Foster's and Lion Nathan.
Moody's found that despite the three per cent decline in market share, Foster's still had a substantial market share of about 50.5 per cent by value for the 12 months month-end March 2010, though it was down 1.5 per cent from the same period a year ago.
"An increased focus on its beer portfolio will help Foster's regain its market share and enhance brand relevance for consumers, given that some of its more mature and now slower growing brands have been losing share because of evolving consumer preferences," Mr Lewis said.
Foster's shares jumped 13 cents, or 2.53 per cent, to $5.27 on Monday.
