Lion Nathan waiting for right time to sell wine assets
Lion Nathan, the subject of a takeover offer by major shareholder Kirin, has indicated they may sell their wine assets as soon as economic conditions improve.
Lion Chief Executive Rob Murray told analysts yesterday that the wine industry was still facing difficulties with a glut, with the economic climate exacerbating the problem. With this in mind the company was not currently considering a sale of the division, which accounts for about 7 per cent of sales.
“My view is there is still an opportunity to sell those businesses for a lot more (in the future),” Mr Murray said. “To buy these businesses at the peak … and then sell them at the absolute bottom of the market . . . is not best serving our shareholders.”
Their wine division saw volumes rise in the first half due to their new US distribution platform but sales fell 8 per cent and profit plummeted 55.7% as consumers steered clear of premium wines.
Lion Nathan said that fine wines had been impacted heavily in the US and UK as consumers switched to more at-home consumption, while supplier-funded discounts required by many retailers had also taken their toll. Similar trends were evident in Australia, the company noted, but wine sales had been more resilient, with Sauvignon Blanc the market standout.
Australia’s second largest brewer also confirmed yesterday that their first half net profit rose 6.9% – driven by premium beer sales. They first released the results last month, well ahead of schedule, to entice a better offer from Kirin.