E-Malt.com News article: 1705

Australian Brewing and wine group Lion Nathan Ltd, maker of XXXX and Tooheys lager, said on October 21 it was confident its Chinese beer operations would reach cash-flow break even in the financial year ended September 30, according to Reuters. Lion Nathan, which ranks as Australia's second-biggest brewer behind Foster's Group Ltd, also said its beer sales at the start of the Rugby World Cup were ahead of plan. "I think it's fair to say that our sales in Australia in beer in the first week...are ahead of plan which is encouraging," Chief Executive Gordon Cairns told reporters.

The firm is supplying its Hahn Premium Light Beer at stadiums during the World Cup while its Tooheys New brand is the official beer of the Australian Wallabies team. However, Cairns said the group has lost a small amount of market share over the past quarter.

Lion Nathan earns most of its profits from Australia and New Zealand brewing with lager brands, but is now seeing growth from its Chinese beer operation and an expanded premium wine business. The SARS outbreak only impacted Lion Nathan's Chinese beer sales for a few weeks, said Cairns, who earlier told a lunch Lion Nathan had so far lost around A$100 million of its original A$200 million ($138 million) investment in China. "We committed to the market this year that we would not lose money so we would be at break even at a cash flow level. I'm very confident we can meet our guidance for this year, that's 2003," said Cairns. Volumes in China grew around 30 % over the year to September 30, said Cairns, who said an internal candidate would very likely succeed him when he retires in September 2004.

The group also said it has no plans to make any acquisitions over the next year in the United States where it is trying to increase its presence.

Japan's Kirin Brewery Co has a 46 % stake in Lion Nathan.


21 October, 2003