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Carlton and United Breweries Ltd.

Carlton and United Breweries Ltd.

16 Bouverie Street
Carlton, Victoria 3053
Australia
(03)342-5511

Wholly-owned subsidiary of Elders IXL Limited
Incorporated: 1907
Employees: 6,000
Sales: A$1.585 billion (US$1.055 billion)

As manufacturers of the extremely popular Fosters Lager, Carlton and United Breweries have achieved impressive sales both in and outside Australia. Although Fosters export history dates back to 1901, the companys major international market thrust initiated in the 1970s is realizing its full potential only at the present time. Moreover, since becoming a subsidiary in 1986 of Elders IXL Limited, an Australian conglomerate, the brewery has seen its worldwide marketing position significantly enhanced. Today, sales of Fosters ranks it in the top ten of the worlds most successful beers.

Carltons growth is synonymous with the growth of Australia. During the gold rush era of the 1850s inhabitants of Victoria were forced to confine their drinking to what was available: only English style ale, first imported and then brewed locally, was available to the growing population of fortune seekers and frontier people. Served at room temperature, the traditional ale was ill-suited to the warm climate. Immigrant tastes, however, could not be mollified for long; soon the market expanded to include locally brewed and more appropriate lagers.

Among the early entrepreneurs were two immigrant brothers, W.M. and R.R. Foster. Together in 1888 they built a modern lager brewery in the Melbourne suburb of Collingwood. To capitalize on the thirst-quenching quality of their product, the Foster brothers made sure the lager was served in its proper chilled form. They achieved this through the marketing ploy of supplying free ice with each sale.

Soon afterwards, they brought over a refrigeration engineer from New York to install an ice-making machine alongside the brewery. Before long a cold serving of Fosters lager could be purchased in many of Victorias numerous hotels. Eventually, consumers of lager outnumbered patrons of traditional ale; the Foster brothers are given much of the credit for winning over local tastes.

In 1907 the Foster company joined an amalgamation of six Melbourne breweries to form the Carlton and United Breweries Proprietary Limited, the forerunner of Australias largest brewery. The founding partners included in the merger were the Victoria, Carlton, Castlemaine, McCrackens, Shamrock and Fosters companies. Today several of these labels continue to exist in Carltons product line, yet Fosters remains the most popular of these brands.

In 1901 Australian soldiers serving in the Boer War in South Africa could enjoy the hometown taste of Fosters. This marked the first time the lager was exported outside Australia. During World War I and II Australian troops overseas spread the name of Fosters throughout the world. It is said that Australian servicemen and women revealed their nationality through their loyalty to Fosters.

Despite the lagers growing international fame, it was not until the 1970s that the company embarked on concerted marketing policy to enhance Fosters worldwide popularity. Among the many cities where the beer could be found were London, Hong Kong, and Manama, Bahrain. Fosters marketing network was further enhanced by an agreement with Watney Mann and Truman Brewers, the large British brewery, to sell Fosters in all of its 12,000 United Kingdom outlets. Today Carltons lager can be found in 80 countries. The U.S. and British sales of Fosters recently benefited from a popular advertisement campaign. Actor and comedian Paul Hogan endorses the product using Australian colloquialisms and examples of local custom.

Carlton Breweries has long been recognized for its commitment to quality. In the earliest years, the Foster brothers hired a German-American brew-master to supervise operations at the new facility. The yeast strain that is said to give Carltons products their unique flavor was brought over from Europe in the 1920s. During World War II all the original cultures were destroyed except one batch in Melbourne. Today the surviving Melbourne strain is kept active in the companys control laboratory.

Carltons reputation as quality brewers increased with the development of their own hop variety. Unsatisfied with imported strains, Carlton scientists created the Pride of Ringwood variety. Today this variety is recognized around the world for its flavor. Carltons advanced technology achieved even wider fame with their development of an innovative method for extracting hops.

Further innovative achievements include their advancement of malt technology and their application of uses for genetic engineering. Of all Carltons research and development activities, yeast genetics appears to be the one with the most potential. Whereas in the past the company was compelled to import technical knowledge, breweries around the world now turn to Carlton for its expertise.

Carltons brewing stages begin with a germination process to convert barley into malt. Next the malt is stored in grist bins, mixed with hot water, and transferred into a mash tun (tank) where it is allowed to stand. Here the temperature changes the starch to fermentable sugar. The mixture is then passed to a lauter tun where the liquid is separated from the residue. This liquid, called brewing wort, is placed in a kettle where sugars are added. The whole mixture is allowed to boil, coagulating the proteins into trub. The trub is then removed from the wort.

Fermentation begins with the chilling of the wort in order to allow the yeast to grow. This process continues until all fermentable sugars are consumed. The fermenter is then chilled to 4°C causing the yeast to drop to the bottom of the vessel. This is removed and the beer is placed in a storage vessel. After it is cooled to 1°C, the hop concentrate is added. The beer is then stored for a specified period of time. After storage the beer is passed through a filter and packaged into bottles and cans.

Carltons products are recognized for their consistency in taste and long shelf-life. To guarantee quality, 45 brewers, 40 engineering specialists, and 80 scientists and technicians oversee the brewing process.

Today Carltons achievements are a source of pride to Australians. The product line celebrates the diversity of local tastes by including a wide range of regional beers. The company is recognized for its commitment to environmental protection and the Australian economy. A recycling effort to recover bottles and cans finds the company working alongside many community organizations. Carlton is also a sponsor of many sports activities and social welfare programs.

In 1983 the largest takeover in Australian history occurred when Carlton and United Breweries was absorbed by the Australian conglomerate Elders IXL Limited. Elders operations are divided into five major groups, including brewing, agribusiness, international, finance and Elders resources. In addition to managing Carltons activities, the brewing group operates a hotel business, a wine and spirits division, and a beer marketing organization. In 1986 the groups brewing business was augmented by its purchase of the Courage Brewing Group in the United Kingdom and the Canadian company Carling OKeefe Limited.

Carltons market position has been enhanced by its subsidiary status. With Elders financial backing the brewing company has now launched a highly effective international marketing campaign. As Carltons products grow in popularity in worldwide markets, Fosters lager remains the companys most important brand.

Principal Subsidiaries

Carlton Brewery Pty. Ltd.; Carlton & United Breweries (Queensland) Ltd.; Carlton & United Breweries (Rockhampton) Pty. Ltd.; Corner Pty. Ltd.; Court House Hotel Pty. Ltd.; C.U.B. Fibre Containers Pty. Ltd.; Derrimut Hotel Pty. Ltd.; Duke of Wellington Hotel Pty. Ltd.; Durham Hotel Pty. Ltd.; Edinburgh Hotel Pty. Ltd.; Edwardes Lake Hotel Pty. Ltd.; Joseph Pease (Pty.) Ltd.; Joseph Pease (Cairns) Pty. Ltd.; London House Pty. Ltd.; Marrara Hotel Pty. Ltd.; Max Cohn & Co. Pty. Ltd.; Melbourne Brewery Co. Pty. Ltd.; Middlesex Hotel Pty. Ltd.; Moorabbin Hotel Pty. Ltd.; Norfolk Hotel Pty. Ltd.; N.T. Brewery Pty. Ltd.; Pease Investments Pty. Ltd.; Penang Pty. Ltd.; Petroleum Distributors Pty. Ltd.; Production Investments Pty. Ltd.; Queensland Brewery Pty. Ltd.; Royare Pty. Ltd.; Samuel Allen & Sons Ltd. (91.4%); The Castlemaine Brewery Co. Melbourne Pty. Ltd.; The Foster Brewing Co. Pty. Ltd.; The Manufacturers Bottle Co. of Victoria Pty. Ltd.; The Oakleigh Pty. Ltd.; The Shamrock Brewing Co. Pty. Ltd.; Victoria Brewery Pty. Ltd.

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