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Australia: Lion Nathan Ltd, Australia's second-biggest brewer and the maker of Tooheys and XXXX, said on March 18 it had appointed a Nestle executive as its new chief executive. Rob Murray, who had been widely tipped to take over later this year from retiring Chief Executive Gordon Cairns, is not well-known to the Australian market, even though he has sat on Lion Nathan's board since September 2002.

Lion Nathan's core business is brewing in Australia and New Zealand, where its major brands also include Hahn and Steinlager. Areas targeted for growth are its China beer business and its small premium wine unit. Chairman Geoff Ricketts said there were unlikely to be major strategic changes under Murray, who is currently chief executive of food group Nestle's Oceania division, which covers Australia, New Zealand and the Pacific islands. "I don't see any major significant shifts in strategy given that Rob was on the board when the board signed off on the strategy direction," he told Reuters.

His appointment follows the announcement of a new chief executive by rival Foster's Group Ltd two weeks ago. Murray, 41, will formally take over on October 1 from Cairns, who is credited with driving steady earnings growth since he took the top job in 1997. "He has been talking about leaving for some time, so it certainly was not a surprise," Portfolio Partners analyst Chris Williams said.

Shares in Lion Nathan, 46-percent-owned by Japan's Kirin Brewery Co, rallied to a new high of A$6.14 early on Thursday but closed 1.1 percent lower at A$6.00 in a wider market down 0.3 percent. Murray, who grew up in the UK, has a track record of leading large organisations, international experience and expertise in managing brands and customers, Ricketts said. "We have observed around the board table in the last 18 months that he has competency in dealing with complexity and ambiguity which are the sort of issues that CEOs get faced with," the chairman said. On Thursday, Cairns affirmed Lion Nathan was still expecting annual profit from operations of between A$195 million ($144 million) to A$200 million for the year ending September 30. "We are broadly comfortable with that," he told Reuters.

The company, valued at A$3.2 billion by the stock market, remains on the prowl for small bolt-on acquisitions in the China beer market, where it has breweries in the Yangtze River Delta. "We are always on the look-out for opportunities because the market is consolidating," Cairns said. The company would also like to add to its small premium wine portfolio, but Cairns said Australian assets were overpriced. There were divided views on whether Australian grape supply and demand would come into balance in the next two years, or whether slowing export growth rates would cause an oversupply to persist, Cairns said. "I am of the latter view," he said.

"If you think there is going to be equilibrium, you clearly believe that asset prices are fairly valued and if you believe there is oversupply, then you believe that they (potential wine company targets) are overvalued." The other leading candidate for Cairns' job, Lion Nathan Australia Managing Director Andrew Reeves, will join the board as executive director next month, the company said. ($1=A$1.35)


18 March, 2004