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New Contender for 'International Brand' Status

June 22, 2005 - Shanghai, the beer, may soon be coming to an upscale bar near you.

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The brand, more than five decades old, is undergoing a significant make-over by Australian beer maker Foster's. With a new package, taste profile and marketing strategy, Foster's is looking to fill glasses around the world with the mystique of the city and a dash of Chinese mythology - and turn Shanghai into an international brand.

The idea is not without precedent. Tsingdao beer is available around the world, but Foster's wants to up the ante.

"Established international brands are generally identified quite strongly with their home market: Heineken with Holland, Budweiser with America, Foster's with Australia, Carlsberg with Denmark," said Duncan Loynes, general manager for international brands at Foster's.

"What I think is unique about Shanghai beer is that it is offering something completely different. There is nothing from China that we feel is in the premium-beer category."

The first step, already under way, is to take the beer out for a taste test. "We think there is a natural market among expatriates living here and visitors," he said.

One of the world's worst-kept secrets is that the Chinese like beer. In 2002, China surpassed the United States as the world's largest beer market. While growth in Europe or America is flat at 1-2 per cent, China's love of a cold one, or even a warm one, is growing at a rate of 6 per cent annually.

Foster's bought the brand in the early 1990s and two years ago, took it off the market while it refined the brewing process and allowed some time for the brand to shed what baggage it had.

"What I wanted to do was reposition it as a beer that could compete globally. I wanted to create some daylight between the old beer and the new beer," said Loynes.

The logo, a slinking red dragon, survived the transition. The beer is available in small bottles; and for draft, the company developed a pouring font with a dragon's head which freezes condensation on the outside.

"We wanted something that would be linked to Chinese heritage," Loynes said. "Authenticity is very important for the brand."


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