Australia’s brewer Lion slashes hundreds of jobs

Australia | Lion Group, the firm behind brands like Toohey’s, Little Creatures Brewing and XXXX beer, is slashing hundreds of jobs following a review of the business by new CEO Sam Fischer. Mr Fischer joined Lion from Diageo, where he was President Asia Pacific and Global Travel, in July 2022.

Australia’s second-largest beer company is fully owned by Japanese conglomerate Kirin. The Australian Financial Review (AFR) speculated on 26 May that up to 300 jobs could be shed.

Lion confirmed the job cuts but declined to comment on the specifics of the massive restructuring. The cuts are focused on group functions such as administrative roles, with limited change in sales, brand teams and breweries, and most will come from the Australian business which has about 2,000 staff.

About 4,000 people are employed by Lion globally, which also owns vineyards in New Zealand and breweries in the US (New Belgium, Bell’s).

Lion said any team members affected would be offered redeployment opportunities wherever possible. Observers say that many will be made redundant by the end of June.

Lion made a loss in 2022

Per the AFR, tougher underlying conditions were clear in Lion’s latest accounts, filed with the regulator in March, which showed an AUD 300 million (USD 202 million) impairment charge for the local business.

Gross profits were up to AUD 983.3 million (USD 663 million) in the year to 25 December 2022, from AUD 974.3 million in 2021. But revenue grew only AUD 19 million to AUD 2.12 billion (USD 1.4 billion). Lion also booked AUD 96 million in rationalisation and restructuring costs, yet gained AUD 30 million in asset sales.

However, Lion posted a net loss of AUD 168 million (USD 113 million) for the year, from a profit of AUD 128 million in 2021, blaming macroeconomic pressures, higher costs of doing business and consumer tastes changing in the beer market.

Squeeze on cheap wine prompts cost cuts at TWE

Lion is not the only beverage firm to cut jobs. In May, the biggest listed wine firm, Treasury Wine Estates (TWE), which makes Penfolds and Wolf Blass wines, announced it would slash roughly 200 jobs and sell assets in its lower-priced wine portfolio. The cost-cutting measures centre on its division selling budget wines under AUD 10 (USD 6.80) per bottle, as the company shifts its focus to the more lucrative high-end segment.

Australia’s second-largest wine group, Accolade Wines, owned by The Carlyle Group, is also selling assets. The AFR revealed that it is planning to sell one of its most prestigious brands, House of Arras, in Tasmania.