Irish Stout Brewers Fighting for Markets : Beverages: Guinness, long preeminent, faces new challenges at home and abroad but expresses confidence in future.

It’s long been Ireland’s best-loved brew, and now the popularity of stout is fast extending overseas as competition between brewers hots up.

Guinness, whose name is synonymous with the thick-bodied, creamy-topped dark beer that is also known as porter, dominates the Irish market, where one in every two pints of beer sold is black.

It is also the largest player in the world’s biggest stout market, Britain, and is increasingly expanding overseas.

Its stout now sells in 150 countries, and the recent announcement that Guinness will be produced in El Salvador brings to 50 the countries in which it is brewed.

In addition, Guinness is opening some 600 pubs as far afield as Tokyo and Abu Dhabi. Two pubs a week are opening in Germany.

But Guinness faces a growing challenge from rival brewers Murphys and Beamish & Crawford, who are determined to take some of the froth off its profits, backed by multinational might.

Beamish and Murphys, both based in the southern Irish city of Cork, have been brewing since 1792 and 1856, respectively.

But while their elder Dublin rival, founded in 1759, went from strength to strength over centuries, the two Cork breweries fell on harder times.

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By the 1980s, Murphys was merely a marginal player in the stout market. But its takeover by giant Dutch brewer Heineken in 1983 rejuvenated the company, providing it with access to a distribution network spanning more than 150 countries worldwide.

“Heineken is the world’s most international beer and therefore has a comprehensive and extremely effective distribution system,” Murphys marketing director Patrick Conway said. “That’s there at our doorstep to tap into.”

Beamish, acquired by Australia’s Fosters Brewing Group in 1987, was recently sold to Scottish & Newcastle as part of Fosters’ disposal of its British and Irish brewing assets. The sale followed a major restructuring program last year.

“It’s a hugely energetic organization now that we have completed the restructuring program, very focused. We have a very young management team, hungry for success,” Beamish General Manager Alf Smiddy said in an interview.

Guinness enjoyed a near monopoly position in the two traditional stout markets in the 1980s but has seen its market share in Ireland fall back from well above 90%.

Beamish, which was sold in only a few streets near the brewery in Cork and held less than 1% of the Irish market five years ago, now claims an 8% market share.

It says it has about 6% of the British market.

“I think by increasing distribution, within three to five years we should be able to double the existing share in the Irish market,” Smiddy says.

Meanwhile, Murphys says it has seen 10% annual growth in a static Irish market in recent years and currently claims 5% of the Irish draft stout market and 15% of the British draft market.

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Guinness declines to discuss market share but remains unperturbed. Pat Barry, director of corporate affairs at Guinness Ireland, admits that the market has become more competitive in recent years.

“With the whole revitalization of the stout sector, our competitors saw opportunities there and they moved in as well.

“It certainly is more competitive but we would have the sizable share and we would tend to argue about the figures that are being quoted by other people.”

But if Guinness is unperturbed, neither is it complacent.

It has spent more than $322 million modernizing its St. James’s Gate brewery, founded by Arthur Guinness in Dublin more than two centuries ago, and stepped up its promotional spending.

Guinness invests to preserve dominance in Ireland and Britain but is also busy opening up overseas markets.

But where Guinness goes, Murphys and Beamish are sure to follow.

“We are not going out pioneering and creating new markets ourselves. We look at what Guinness is doing in those markets and if we feel there is potential there we move forward,” Smiddy said.

Beamish now exports to about 20 countries.

Murphys’ overseas plans are even more ambitious.

“Our strategy is to target future growth and aim for 20% of the world stout market,” Murphys’ Conway said.