Beer-loving Aussies are turning to a softer brew

CANBERRA Tue May 1, 2007 9:04am EDT

An Australia soccer fan drinks a glass of beer before his team's World Cup 2006 Group F soccer match against Brazil in Munich, in this June 18, 2006 file photo. Australians, long regarded as a nation of beer drinkers rivaled only by the Germans, seem to be turning soft, or sober. REUTERS/Alexandra Winkler

An Australia soccer fan drinks a glass of beer before his team's World Cup 2006 Group F soccer match against Brazil in Munich, in this June 18, 2006 file photo. Australians, long regarded as a nation of beer drinkers rivaled only by the Germans, seem to be turning soft, or sober.

Credit: Reuters/Alexandra Winkler

CANBERRA (Reuters) - Australians, long regarded as a nation of beer drinkers rivaled only by the Germans, seem to be turning soft, or sober.

After 113 years, the country's biggest selling beer, Victoria Bitter, or VB, is to be produced in a mid-strength version to keep pace with the country's fast-changing beer tastes.

VB, with its distinctive green label, has since 1894 been a staple of hard-drinking backyard barbecues, student revels and football games, not to mention healthy overseas exports.

Now brewer Foster's has decided for the first time to produce the beer in a weaker yellow-label version with 3.5 percent strength, down from 5 percent, as Australians abandon it for scores of more upscale "boutique" or craft beers.

"The change has been dramatic. The drinking habits of Australians have been changing over time and what we have found is that the markets in growth are the premium and mid-strength markets," Foster's Brand Manager Felicity Watson told Reuters.

Mid-strength and boutique beers are the new darlings of Australia's A$5.5 billion ($4.5 billion) beer industry, with 12 percent annual growth against flat sales for mainstream beers.

New boutique breweries including Cascade, Boag's and James Squire have won huge followings in most city pubs, while so-called microbreweries such as Little Creatures, Mountain Goat and Blue Tongue have lured drinkers away from VB in droves.

"There is just a lot more choice and consumers are no longer attached to just one or two brands," Watson said. "They will have a different brand for different occasions, if you're out with a group of friends and you want to impress."

In April boutique breweries in the state of Western Australia demanded the government provide them with tax breaks enjoyed by the country's global wine industry to help them grow further.

Hundreds of craft breweries are opening and aiming to rival small European makers, turning Australians away from traditional lagers and on to more complex beer styles.

Watson said the new yellow VB would be backed by a A$35 million advertising campaign.

"We think the competition is a positive thing to be honest, because what it means is there's a lot of interest in beer," she said.