Australian rugby has suffered another blow, losing Bundaberg Rum as its naming rights sponsor for home Test matches.

The company will end its 10-year association with the Wallabies when its current deal with the Australian Rugby Union expires at the end of the year.

The withdrawal marks another setback for the code, which ARU boss John O'Neill described as being at "rock bottom" less than 12 months ago.

The game in Australia has struggled for crowds and television audiences in recent seasons, but did secure a 35 per cent increase in revenue for a new broadcast deal covering expanded Super and Test tournaments from next year.

"After careful consideration and review, the Bundaberg Distilling Co will not be renewing its title sponsorship of the Australian Rugby Union's Tri-Nations and Rugby Series when the current contract expires on 31 December 2010," marketing manager Matt Bruhn said in a statement.

"At all levels of the game, Bundy has been a strong supporter of rugby and we believe we have created a legacy that will endure well into the future."

Respected advertising industry magazine AdNews reported Bundaberg's association with the NSW Waratahs was also being reviewed while the company focused on its sponsorship deals with the NRL and V8 Supercars.

A source told the magazine the Wallabies deal had "run its course" as rugby league and AFL became more popular, a claim rejected by the ARU.

"I haven't seen that in any of their official releases so I certainly wouldn't, on our behalf, be making comment on unsourced speculation," an ARU spokesman said.

The ARU said the end of the deal did not necessarily mean a financial hit for the Wallabies.

"You don't know (that) until you go into a renegotiation, or whether in fact there's a financial upside," the spokesman said.

"Even an existing sponsor who is renegotiating, the terms and conditions of that new deal are also negotiated so effectively it would be no different.

"We're in discussions with potential replacements and hopefully we'd be in a position at some stage soon to announce who will be filling that space in 2011 and beyond."

The ARU's assignment will not be made easier by the IRB preventing home Tests being played in the World Cup year, apart from the shortened Tri-Nations series.

The edict effectively reduces the number of Tests to be played in Australia in 2011 from seven to two.

But officials are confident the next three years, which will include the expansion of the Tri-Nations to include Argentina in 2012 and a British and Irish Lions tour in 2013, will prove attractive.

Bundaberg will continue to support rugby at a community level.

"In terms of the partnership with the ARU, while Bundaberg have withdrawn at that Wallabies level, they have maintained that they will continue an association with the game at a grassroots level," the ARU spokesman said.

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