Lion’s Managing Director James Brindley samples the newly-brewed Guinness.

Australia’s premier wine region is set to become the brewing home of iconic Irish brands, Guinness stout and Kilkenny ale.

Brewery giant Lion has brought production of the famous labels to the West End brewery in the Adelaide suburb of Thebarton, after winning the license to distribute, sell and market Guinness Draught, Kilkenny Draught, and Extra Stout, in Australia.

The new agreement extends Diageo’s partnership with Japanese conglomerate Kirin, Lion’s parent company, in the Asia-Pacific region.

Lion’s Managing Director, James Brindley, told the Irish Echo that the latest acquisition will strengthen their portfolio.

“I think it will have an excellent impact. Both Guinness and Kilkenny are much loved by many people, and one thing I’ve learned is that almost everybody likes them – it’s just they don’t really talk about them that much.

“Because they are such unique beers, they don’t overlap with anything in our portfolio already, so we feel very lucky to be able to look after Guinness and Kilkenny.”

The new agreement serves as a blow to Lion’s rivals, Fosters, who finished its license deal with the owner of Guinness, Diageo, on October 31.

The move marks the fifth and sixth imported beer brands to leave Foster’s portfolio, since the $12.3bn takeover by SABMiller.

Lion now controls 47.5 per cent of the Australian beer market, following its acquisition of former Foster’s brands, Stella Artois and Corona.

Mr Brindley says that Lion intends to rejuvenate the Irish brands, which he says have declined over the last 10  years.

When Fosters had the contract, they were only permitted to manufacture the brew, with Diageo responsible for marketing and distribution.

“We’re going to make it, sell it, distribute it and market it, whereas before, it was split between the two. I think the extra focus should help it grow,” he explains.

He adds that the high quality brew on offer should entice customers to drink more Guinness and Kilkenny.

“I’ve got an Irish friend that says no Guinness brewed outside Ireland is as good as it is in Ireland. That’s okay – hopefully, we’ll have the second best. It has been approved and tested by the experts in Ireland. Informal taste tests amongst Diageo staff scored pretty well also,” he says.

“The feedback we have got is that we have some of the highest scores ever achieved outside of Dublin.”

Production of Guinness and Kilkenny commenced on November 1, but Mr Brindley says that it may take a few weeks for the previous manufacturers product to leave the system.

He says that the new South Australian brewed Guinness and Kilkenny should be available across Australia by mid-December.

The Diageo deal makes Lion the biggest player in the Australian beer market.

Guinness and Kilkenny are to have a new brewer and distributor in Australia from November, it was announced this week.

Lion has signed an agreement with Diageo to distribute, sell and market Guinness Draught, Kilkenny Draught and Extra Stout, in Australia.

The new agreement extends the partnership Diageo has with Kirin (Lion’s parent company) in the Asia-Pacific region and comes as a blow to Foster’s, who has ceded ground to its rival.

Lion now control 47.5 per cent of the Australian beer market, with the recent acquisition of Stella Artois and Corona aiding that foothold.

Meanwhile, Foster’s controls 44.6 per cent of the beer market here, with Italian beer Peroni among the brands in its portfolio.

Kirin is Diageo’s distribution partner in Japan, and Lion already brews and distributes Guinness and Kilkenny in New Zealand through a pre-existing relationship with Diageo.

Guinness and Kilkenny – which will continue to be owned by Diageo at a global level – has been previously manufactured by Foster’s, with Diageo acting as custodian of the brand marketing and distribution in Australia.

James Brindley, Lion’s managing director said the new deal would strengthen their portfolio.

“These brands strengthen our leading international premium portfolio, with Lion now offering six of the top ten beers in this fast growing segment. Guinness and Kilkenny have fantastic heritage and we are delighted to have the opportunity to further grow these brands in Australia,” said Brindley.

The new deal will have little effect on pubs’ relationships with the Guinness and Kilkenny brands, according to Fergal McCauley, manager at PJ O’Brien’s Irish pub in Sydney.

“We have a relationship with Lion Nathan and Foster’s anyway and that will continue after November,” he said.

Mr McAuley said the new deal will increase Lion’s bargaining power when it comes to renegotiating contracts with pub groups.

“With these products they [Lion] will now be the biggest in Australia.”

He added that the deal would have no impact on the quality of the products and said that Diageo will continue to demand a high standard.

Foster’s will continue to manufacture Guinness and Kilkenny in Australia until October 31, 2012.