It’s a tough market
Releasing its trading update for the half year ended 31 March 2014, Australia’s major brewer Lion announced on 7 August 2014 that across the entire group, revenue decreased 0.6 percent to AUD 2,674 million as Lion’s various businesses continued to face highly competitive market conditions.
While the Beer, Spirits & Wine Australia business experienced volume decreases as a result of the declining beer market and the timing of the key Easter trading period, improvements in mix secured moderate revenue growth.
As a result, group operating earnings increased 1.9 percent to AUD 420 million, supported by a favourable New Zealand exchange rate. Lion’s CEO Stuart Irvine said: “Like all FMCG businesses, Lion is navigating a highly competitive market against a backdrop of subdued consumer confidence and rising input costs. In this environment we are firmly focused on high value category and brand growth, while reviewing operational efficiency across the business. Lion has a clear ten year strategy in place to fuel future growth. As the leading brewer in both Australia and New Zealand, we are committed to reinvigorating our beer markets and driving high value category growth through best-practice marketing and innovation investment.”
In Australia, Lion reported solid growth in beer brands such as XXXX Gold, 150 Lashes and Hahn Super Dry and noted that the new Little Creatures brewery in Geelong had opened in the review period and expansion of Boag’s brewery in Launceston continued.
Meanwhile, a 16 percent drop in half-year profit has prompted Coca-Cola Amatil to target operational savings of AUD 100 million over the next three years. CEO Alison Watkins said that initiatives to achieve the target were well under way as the company faced challenges in its Australian and Indonesian businesses. Earnings from New Zealand and Fiji were flat and the Australian alcoholic beverages business saw a modest fall.
