Flat beer sales

Beer sales in Australia have stagnated in the past year for liquor group Lion Nathan, but the brewer is hoping that it can reap rewards from higher prices. The company, commenting on its third-quarter performance, confirmed that full-year net profit after tax was on track with previous forecasts of AUD195 million to AUD200 million.

We are not amused

Foster’s 2004 annual report bears the slogan "Foster’s - part of the moment". Considering the group’s performance last year, it must have been a case of wishful thinking. Foster’s products cannot have been part of many ‘moments’ given that sales by continuing businesses fell 6 percent to AUD3.6 billion. The oversupply of cheap wine on the global market reduced Beringer’s 2003/2004 sales by 18 percent to AUD1.6 billion. Foster’s wine division earnings (EBITA) fell 32 percent to AUD292 million. Just as well that the CUB beer business had a 9.5 percent EBITA rise to AUD520 million with sales up 6.9 percent to AUD1.78 billion. Luckily, the sale of Foster’s leisure division ALH last year lifted net profit 73 percent to USD799 million. The offer was to save you AUD22.48..

Lucky me

It’s a funny old world: For years no one had been mad enough to buy Lion Nathan’s three unprofitable breweries in China. Then, suddenly SABMiller comes along, clinches the deal and tells the world that though this be madness, there was method in it. After losing out on the Harbin brewing business in China to Anheuser-Busch, SABMiller has announced the acquisition of Lion Nathan’s Chinese division for USD154 million, including about USD83 million of debt. Apparently, SABMiller thought it best to immediately recycle the USD211 million of cash it generated when it sold its shares in Harbin to Anheuser-Busch a few months ago. The Chinese market is the largest in the world yet highly fragmented, making it hard for brewers to make any money.8, which is more in line with the average.5 million..

Not for the fainthearted

It obviously takes a lot of guts - and muscle - to invest in Belarus. The country’s reputation is far from savoury - and this has nothing to do with the sad fact that Belarus is the country most affected by the nuclear fall-out following the Chernobyl disaster. Nevertheless, the International Finance Corporation (IFC), the private sector financing arm of the World Bank Group, has signed an agreement to make an equity investment of USD3 million in Detroit Belarus Brewing Company ("DBBC") and to lend USD7
million to CJSC Belarus Brewing Company ("BBC"). DBBC and BBC are participating in the privatization of Dednovo Brewery ("Dednovo"), located in Bobruisk of the Mohilev Region in central Belarus.
This is the first privatization of a brewery involving western investors. For many U.

Hunting the tiger

Asia Pacific Breweries Ltd. (APB) announced in July that its brand Tiger Beer would shortly be brewed locally in Thailand. This makes Thailand the seventh country to brew the popular beer according to APB. First launched in 1932, Tiger Beer is available today in more than 60 countries including the UK, the US and the Middle East. Tiger Beer is not new to the Thai beer market as Singapore has been exporting it to Thailand since the 1930s. In view of Thailand’s improving economic progress, its sizeable beer market and growing affluence of its population, APB decided that it is now timely to brew Tiger Beer locally, thus growing the premium beer segment which is currently 80 percent dominated by the Heineken brand according to APB.

Tidying up the house

Singapore’s Asia Pacific Breweries Limited (APB), jointly owned by Heineken International and Fraser and Neave Limited, announced its intention to make an unconditional takeover offer for the purchase of the 23.09 percent of New Zealand brewer DB Breweries Limited (DB) that it does not already own. It was in 1991 that APB first bought into DB Breweries. In 1993 it raised its equity participation to 54.7 percent.
The offer price is NZD9.50 cash per share. This represents a 20.25 percent premium to the last trade of NZD7.90. The bid values DB at about NZD479 million (USD319 million). This means that APB is entitled to record a relevant interest of 85.25 percent in the capital of DB. The offer is being made
to enable APB to privatise and de-list DB...

Light at the end of the tunnel

Sapporo Holdings Ltd announced that it expects to post a profit in the first six months of the 2004 business year; the first time in four years, due mainly to higher sales of its Draft One beer-like alcoholic beverage. The Japanese company said that it hopes profit to rise by 120 percent to a record JPY14.7 billion (USD133.8 million) for the year to 31 December. The brewer had initially projected a 32 percent decline for 2004 to JPY4.6 billion. The company mentioned it believes group sales will rise by 2 percent this year, while net profit should leap by 110 percent to JPY5 billion. The major Japanese brewery said it expects its group net balance to swing into the black in the period to 30 June 2004 with a profit of JPY2.7 billion, a turnaround from a loss of JPY6...

Seizing opportunities

As China is shaping up to be the main strategic battleground for businesses in the 21st century, Carlsberg (helped by the Danish Industrialisation Fund for Developing Countries) has decided to acquire 50 percent of the Lanzhou Huanghe Brewery’s operations in the Gansu and Qinghai provinces in western China.
The deal involves three breweries in Gansu province and one as yet to be built brewery in the Qinghai province. Construction will start this summer.
Carlsberg and the Fund have paid a total of DKK115 million (USD19 million) for the four breweries, which equals USD17 per hl installed says Carlsberg. This year the breweries are to sell 1.6 million hl of beer..

On a growth track

Australia’s third largest brewer, Coopers Brewery, has enjoyed its second consecutive year of double digit growth with total beer sales rising 16.4 percent during 2003/2004. In the 12 months to 30 June 2004, Coopers’ sales of bulk or kegged beer rose by 26.4 percent, while packaged beer sales were up 14.1 percent. Coopers’ Managing Director, Dr Tim Cooper, said the results had been fuelled by growing demand nationally for premium beers, which currently make up about 8 percent of the total Australian beer market. Coopers Brewery has started an AUD7 million (USD8 million) expansion programme at its Regency Park brewery in Adelaide to meet rising demand.

Sobering up

Australia’s leading juice maker Berri Ltd will sell a 50 percent stake to Filipino beverages giant San Miguel Corp, which will give Berri an entry into the Asian market. San Miguel, the largest Philippine food and beverage company, said that it valued Berri at AUD236 million (USD169 million) but did not reveal the price it paid. Last year Berri was a target for Coca Cola Amatil Ltd in an AUD300 million takeover attempt which was rejected by the competition watchdog. The remaining 50 percent of Berri are held by the Australian agribusiness company ICM Group.
This is San Miguel’s second investment in Australia. In 2000, it established a presence with its acquisition of the Tasmanian brewer J. Boag & Son for an estimated sum of USD55 million..