Lion reports revenue decline

Like most companies across Australia's retail, grocery and other consumer goods sectors, Lion continued to experience tough market conditions during its third quarter. The brewer-to-drinks-to-dairy company, which is wholly owned by Japan's Kirin, reported on 4 November 2011 its third quarter results for the three months to 30 June 2011.

Lion said that year-to-date revenue declines were caused by weak consumer sentiment along with the ongoing consequences of poor weather, natural disasters in Lion’s key markets, the loss of private label contracts and deep retailer discounting on white milk.

Discussing the group’s third quarter results, Lion CEO Rob Murray said that the Australian beer, wine and spirits division had increased revenue by 4.3 percent, gaining 1.1 beer market share points. However, a full-year loss is expected from the dairy and drinks division, due principally to deep discounting of milk by major retailers. Although a Federal Senate committee declared on 3 November 2011 that the discounting of milk to AUD 1 per litre did not harm the dairy industry, Lion claims that such discounting has led to a significant loss of key private label contracts for milk and a move away from higher-margin branded products.