Spending €80 million to gain market share in a falling market is either (a) an act of supreme stupidity or (b) an act of extreme bravery.

For Tom McCusker, managing director of Interbrew Ireland, the answer is none of the above. For him and his company, now the world's biggest brewer by volume, it is an act of supreme confidence.

It is an act of confidence, he says, because his bosses are front-loading the €80 million spend over the five-year period, with the bulk of it being spent now. Interbrew aims to become a very strong third player in the Irish market - including Northern Ireland - within five years.

At present, Interbrew is a weak fourth player in the Republic, behind Diageo, Heineken and Beamish & Crawford.

Around 60 per cent of the €80 million is being invested in staff, through recruitment, training and general running costs. The remainder will be spent on marketing and branding two of its key brands, Stella Artois, a Belgian lager and Becks, a German lager.

The company currently employs 75 people in the Republic, having engaged in an intensive recruitment campaign since January. The process is almost complete and the workforce will rise to almost 100 within three years.

Such investment comes as publicans report a steady fall-off in business. They blame several factors, including the smoking ban and the ban on children in pubs after 9 p.m. A consequence has been a rise in off-sales.

Approximately 75 per cent of the Republic's beer market is accounted for by sales through the on-trade or pubs and restaurants, with 25 per cent of sales through off-licences.

The Interbrew group, which has just changed its name to InBev, sees the Republic as the main driver of growing its business on an all-Ireland basis. To this end, it is pinning its hopes on cashing in on the growth potential of the premium lager beer market. These are stronger beers, normally around 5.3 per cent alcohol by volume (ABV), compared to a norm (in the Republic) of around 4.5 per cent. They attract more excise duty and are also more expensive.

Stella Artois has always traded on being more expensive, and is currently marketed as being "reassuringly expensive".

Mr McCusker (47), who has worked in the beer business for 26 years, says research in Britain and other European countries has shown it to be a growing market. Nor are customers deterred by its price when the economy turns.

He worked with Bass in the North before it was taken over by Interbrew, the Belgian-based brewing group, and says he cannot get over the amount people spend on expensive cars and other goods in the Republic.

"People want better beers, a different taste, something that bit different," he says, "and they are prepared to pay for it."

Mr McCusker drew up the five-year development plan for the Republic and was appointed managing director of Interbrew Ireland earlier this year. He had previously been sales director for Bass Ireland for 10 years.

It was good news for Mr McCusker when Interbrew bought out some of the Bass operations. The new owner's business was purely beer, whereas Bass's interests had spanned several areas, including hotels and pubs. He says getting approval for the current "growth agenda" was not difficult: Interbrew is a pure beer player. "We are confident that we can dominate the premium-beer market," he says.

Like other brewers, Interbrew is reluctant to break out profit and loss figures for its various operations. Mr McCusker says he expects turnover in the Republic to increase from €40 million last year, to €80 million this year. Market share should increase from about 1.6 per cent to 3 per cent in 2004.

Within five years, he hopes (on an all-Ireland basis) that Interbrew will have about 15 per cent of the market.

Later this year, despite initial interest from four parties, Interbrew will close its Bass Ireland Ulster Brewery plant in Belfast with the loss of 65 jobs. Having lost a lucrative bottling contract, combined with a high cost base, it was not feasible to maintain the operation, says Mr McCusker. Having worked there for many years, and knowing everyone in the plant, he says he is sad about the closure.

Mr McCusker says the company is not ignoring the northern market, where turnover last year was about £65 million and where Tennents lager and Bass are among its flagship brands.

However, he sees the real growth potential in the Republic.

Notwithstanding that there has been a decline in pub-goers, Mr McCusker believes the on-trade is still the key market. This is because it still does the majority of the beer business and the margins for brewers are better.

Some have blamed successive price increases for the decline in pub-goers. More than 200 Dublin-based publicans have been in dispute with both Diageo and Heineken this year, over the brewers increasing the prices they charge them. The publicans have argued that this comes at a bad time for the trade and will further damage business.

Interbrew decided to wait and gauge the reaction before deciding on whether to increase its own prices. Despite this, many publicans increased the price of Stella Artois by up to 20 or 30 cents when the other brewer increases came in, Mr McCusker says. It puts Interbrew in an awkward position because it makes it difficult to seek an increase now as the fear is this will be again passed on to the customer.

Although you would expect him to say it, he says Interbrew promotes responsible drinking. How can it do this while promoting a stronger, and therefore more potent lager? "Stella Artois is not a drink that you should drink lots of at one session. We would prefer people to enjoy a few pints of it, not to go mad."

Obviously, Mr McCusker would like everybody to drink a few pints of it, and regularly, so that he can realise his target of more than doubling its market share by 2008.