Australia's two largest brewers, Foster's Group Ltd and Lion Nathan Ltd, have already cut water use in the worst drought in a century.

Lion Nathan is building a water recycling plant at its Castlemaine Perkins brewery in Queensland that will reduce by almost half, to less than 2.2 litres, the amount of drinking water needed to make a litre of beer.

That compares with international standards of four to five litres of water, though some breweries still use up to 10 litres. Brewing performance is measured by the amount of water needed to brew a litre of beer.

"It won't affect the taste and quality of the beer," Lion Nathan's environment director David Carter told Reuters. "We won't be using recycled water for making beer, although technically I suppose you could."

The brewery, which makes XXXX brand beer, will save 1.1 million litres a day by using recycled water to clean packaging lines, lubricate conveyors and clean floors.

"The drought has made us more aware than ever of the need to keep improving our water management practices," Carter said.

At Lion Nathan's Swan brewery in Western Australia, treated waste water is used to water an adjacent golf course and another brewery, SAB, draws water from an artesian well.

At Foster's Yatala brewery in Queensland, which produces about 430 million litres of beer and other drinks a year, water-saving measures have cut consumption to 2.3 litres of water per litre of beer.

"We believe we are the most water efficient major brewery in the world, by a considerable margin," said Yatala's general manager Noel Jago.

While drinking water is used for beer and wherever water touches the beer, recycled water is now used for external keg washing, vacuum pumps, cooling towers and boilers, and other processes, he said.

At its other main plant in Abbotsford, in inner Melbourne, which also produces 430 million litres a year, Foster's uses about 3.5 litres of water for each litre of beer, and has introduced similar recycling measures.