Lion Nathan to sell RTDs through Bacardi-Lion

Posted by Daniel Palmer on 6th June 2008

Lion Nathan Australia (LNA) has announced today that its spirit and ready-to-drink brands, McKenna Bourbon and Inner Circle Rum, will be sold in Australia exclusively through Bacardi-Lion, the 50/50 joint venture between Lion Nathan and Bacardi Martini, from October 1.

Andrew Reeves, LNA Managing Director, indicates the decision was made to strengthen the portfolio of Bacardi-Lion. “Following the successful launch of McKenna Bourbon and Inner Circle Rum through LNA and the widespread distribution achieved, we had a decision to make as to whether we scale up our dedicated LNA spirit and RTD sales force or invest in and leverage our larger Bacardi-Lion platform,” he said.

“Combining our dark spirit portfolio with Bacardi-Lion’s strong presence in the full-strength spirits and RTD segments will create a complete and powerful portfolio,” Mr Reeves added. “We will be combining sales resources and, as a consequence, we will have more people selling our dark spirit brands.”

Mr Reeves also advised that the plan was orchestrated to help limit the risks now associated with the RTD category. “The recent RTD tax changes have created a level of uncertainty around the RTD category and it is reasonable to believe that there will be a decline in the size of the category,” he said. “Our decision to use the Bacardi-Lion JV as the route to the market for McKenna and Inner Circle Rum will help to mitigate these risks.”

Mr Reeves does, however, consider that growth for Lion Nathan can be achieved in the RTD and spirits categories. “Spirits and RTDs remain a very attractive growth option for Lion Nathan as we are currently a relatively small player in the spirit and RTD market and we believe that the Bacardi-Lion joint venture offers a strong platform to achieve our ongoing growth aspirations.”

Lion Nathan Australia will retain ownership of the McKenna and Inner Circle trademarks and maintain responsibility for the marketing of the products.