Heineken’s profits have gone flat

Trust Australian journalists to go snooping after Lion’s figures as soon as the market-leading local brewer submits its financial results with the corporate regulator. On 26 January 2015 media revealed that the Lion-Heineken joint venture suffered a 16 percent fall in annual profits in its latest financial year (ended 30 September 2015) as net profit after tax dropped to AUD 10.5 million (USD 7.5 million) from AUD 12.5 million a year earlier. However, sales increased 2.5 percent to AUD 67.4 million (USD 47.7 million) in the financial year 2015.

The Heineken Lion venture has been in operation in Australia since 2004 and has survived the AUD 3.4 billion buyout of Lion by Japanese group Kirin, which took place in 2009 and gave Kirin 100 percent ownership.

The joint venture paid Heineken a dividend of AUD 11 million, which does not seem a lot of dosh, but that’s licencing for you.

The Heineken-Lion joint venture was set up to enable the Dutch brand to take advantage of rising demand for premium beers. But in recent years premium beers have seen strong competition from craft beers, a segment which has experienced growth between 15 to 20 percent annually.