Beer is a dream product for advertising agencies: part drink, part illusion. The froth of the storytelling - and a good example is Speight's depiction of the stoic Southern Man - is as crucial to sales as the quality of the liquid in the bottle.

Few products rely more heavily on advertising. Agencies can rise or fall on beer and the best campaigns are revered in the industry and loved by the public.

Imagine, then, the blow to the Auckland office of Saatchi & Saatchi when Lion Breweries last month stripped it of both the biggest-selling beer in the country, Lion Red, and another of the best-known beer brands, Steinlager. It came after years of Lion Breweries and Saatchi & Saatchi struggling to find an identity for New Zealand's favourite beer.

Conventional wisdom among advertising people is that Lion Red lost its way after the boisterous "Red Blooded" campaign of the early 1990s, which starred actor Michael Hurst, his short-cropped blond locks, and a colourful mix of characters in a pub.

While consistency is crucial for brands, the advertising after "Red Blooded" veered all over the place. A television campaign in the late 1990s called "What it means to be a man" dropped the larrikin image in favour of more sober scenes, such as a climber rescuing his buddy and a father coming home from the factory to greet his child. The brewery was trying to move with the times.

A Lion Breweries' executive swore the new approach was permanent and, talking of previous campaigns, said: "You'll never see Lion Red advertising like that again." Not true.

The first commercial in the so-called "Chinheads" campaign that turned up three years later, in late 2000, lurched back to the larrikin end of the spectrum, opting for a leering, sports-centred version of blokey fun. Now that campaign is being killed.

The struggle by Lion Breweries and Saatchi & Saatchi to find a clear identity for the country's biggest-selling beer may be the result of mistakes within those organisations, but it could also be a sign of something else: a struggle to get to grips with the big changes in where beer sits in our culture.

The graph for beer consumption shows a steady decline, with beer slipping from 56 per cent of the alcohol market in 1991 to 47 per cent a decade later.

Beer drinkers are swamped with choice - beer writer Kerry Tyack says the country boasts more than 50 breweries and 200 beers - and less likely than in the past to stay loyal to just one brand.

The breweries are growing the "premium" - that is, pricey - end of the market, but still depend heavily on the big mainstream brands such as Lion Red and Export Gold.

Drink-driving campaigns have altered the drinking culture. As well, alcopops and RTDs - the ready-to-drink mixes - have taken off and the marketers also know beer as a drug is up against alternatives such as Ecstasy.

Lochie McPherson is the creative director of one of the big ad agencies, Publicis Mojo.

He says: "Beer's not the centre of life that it once was. With party drugs and energy drinks and then, on the other side of things, a nice wine - beer's not necessarily the main game in terms of people's mind space."

One argument within the marketing scene is that the big breweries were slow to adapt to the emergence of a more sophisticated national palate.

Here's how one person vastly experienced in beer marketing summed things up: Beer developed a special role in New Zealand that sprang from a colonial and pioneering past and a national social awkwardness . "It was a self-medication for an uptight little country with a self-image problem."

As both the society and the national palate grew more sophisticated, the breweries were slow to change. While wine moved on from the cask and cheese moved on from the block, "beer's still got a major identity crisis".

Tyack, who wrote a guide to breweries and beer in New Zealand, agrees that "the breweries have dragged the chain in their efforts to position beer alongside the other things that make up the entertainment spend".

However, he says things are changing, pointing to examples such as the Belgian-themed pubs where beer is presented as a taste experience, similar to wine or cheese.

The chase is on for beer to secure its share of what Tyack says is the most lucrative chunk of the entertainment sector: the food and beverage market. "Hence, you will see a growth in the number of themed bars."

The efforts of the breweries to get to grips with a fragmenting and changing market are well illustrated by Lion Breweries' efforts last year to launch a niche beer called Lion Pils.

The aim was to target the so-called "emerging drinker", the 18- to 24-year-old. The tactic for the launch was novel.

Lion and its then advertising agency, McCarthy Moon, came up with a list of about 100 cool young people around the country identified as "leaders" within areas such as music, fashion and sports. It then simply offered them free beer.

The idea: seed the product among the cool young things and the rest will follow.

Reports are mixed on the success of this approach, and Lion later shifted to a more traditional television campaign.

But it is one illustration of the time, money and brainpower that is thrown at trying to encourage New Zealand to drink particular beers, from the focus group research to the millions spent on television time. At the top end, an individual commercial can cost from from $400,000 to $600,000.

Think of the technical expertise sitting in behind the television commercial that spoofs the movie The Matrix, and which was created for DB brand Export Gold by beer advertising gurus Roy Meares and Jeremy Taine. The ad used the movie's cinematographer and was shot in some of the same Sydney locations.

The latest Export Gold ad, from M&C Saatchi, sounds cheap - stunts with a wheelbarrow, what could be simpler, right? - but the extensive post-production work, adding effects and animation to the footage will have pushed up the cost.

Director Robert Sarkies, of Scarfies fame, was called in by Saatchi & Saatchi to shoot the "Chinhead" series for Lion Red, the campaign that's now being killed by the brewer. Saatchi & Saatchi's last ad for Steinlager - a 60-second black-and-white paean to ambitious achievers - was a big-budget number, even if actress Danielle Cormack was filmed in Newmarket and then inserted into the footage of Hollywood.

The agency said it was going for "a big international look" when it unveiled the commercial simultaneously on New Zealand television and on a big screen at Stadium Australia during an All Black rugby clash.

Despite the decline in consumption, Auckland marketing specialist Howard Russell says beer retains its role in society as a significant badge of personal identity.

"It's like your car, your clothes. Beer is a major, major definition of how you see yourself and what's important to you." That is because, as he reiterates, beer is "all image".

Russell uses the example of Heineken to illustrate the extent to which this is true. In Holland, he says, it is a working man's beer. New Zealand, on the other hand, "has done a wonderful job of bringing it in and making it premium".

The big difference? The advertising and marketing.

Television viewers will know a couple of the Heineken commercials that were created in New Zealand but aimed for a European flavour.

One, shot in Los Angeles, shows a man who gets a makeover from a glamorous blonde. He's willing to change everything but his preferred beer brand.

Another, shot in Auckland, depicts the adventures of a fictional photo-journalist, travelling through international hot spots, and then, finally, relaxing in a quiet bar with a Heineken.

Both of those commercials came from Roy Meares and Jeremy Taine.

Meares is the vastly experienced adman who wrote the script for the original "Red Blooded" commercial for Lion Red in the early 1990s. And he and Taine came up with the classic Speight's commercial that tells how "she's a hard road finding the perfect woman".

Now, Lion Breweries has put both Steinlager and Lion Red back in his hands. The advertising industry - and the drinking public - will be watching to see just where Meares thinks those brands fit, and what personalities they should have.