E-Malt.com News article: 3095

Australia: Beer sales in Australia have stagnated over the past year for liquor giant Lion Nathan, but the brewer is hoping to reap rewards from higher prices. Lion, which runs a portfolio including XXXX, Tooheys, Steinlager and high-class wines -- blamed the flat sales volume on overall industry trends. The brewer and distributor, commenting on third-quarter performance, confirmed on August 12 full-year net profit after tax was on track with previous forecasts of $195 million to $200 million, according to the Herald Sun.

Lion Nathan investor relations director Warwick Bryan said while many were anticipating a result on the upper side of guidance, the company was comfortable with its forecast. But one analyst said he was expecting the result to surpass this.

Shares in Lion rose 5 to $7.06. Group beer volumes, excluding XXXX in Britain, lifted 7 per cent to 261 million litres in the quarter. "We've had very, very strong growth in volumes in China," Mr Bryan said. The past three months in Australia were a bit slow but the year-on-year result was flat. "It's pretty much in line with trend," Mr Bryan said.

Queensland was stronger than the national market. Lion also was recouping "some costs" after pumping up wholesale beer costs about 3 per cent from August 1, a move coming as half-yearly excise duties impacted. "Going into the final quarter, the Australian beer business will benefit from a further price increase," he said. "We continue to reinvest behind our brands. "What we are seeing is very strong growth in the premium sector." This includes boutique, pricier beers like Heineken. "Currently premium in Australia is only around about 7 per cent of the total beer market in volume terms," he said. "Now if you look at New Zealand it's around 18 per cent."

Lion last month said it was in talks about consolidation in the Chinese market, where it has three breweries in the Yangtze River Delta.


14 August, 2004