AUS/NZ: Lion H1 sales flat as consumer confidence "subdued"
Lion, the Australasian drinks and food unit of Japan's Kirin Group, has seen flat half-year sales, but profits rose due to currency movements.
The unit, which operates in the beer, spirits, wine, soft drinks and dairy categories, said sales in the six months to the end of June came in at AUD2.7bn (US$2.51bn). Operating profits rose by 1.9% to AUD420m, helped by a “favourable New Zealand exchange rate”, the company said.
In Australia, Lion's alcohol unit – including beer, wine and spirits – saw a 2.5% drop in first-half volumes due to the “declining beer market” and the timing of Easter. However, an “improvement” in sales mix saw a “moderate” growth in sales, the company said.
Australia's beer market remains “challenging”, but Lion said its portfolio is “geared to the growth segments of the market, including mid-strength, contemporary, craft and international premium”.
In New Zealand, the company said market conditions remained “challenging” and it continued to experience “aggressive competition”, without revealing figures.
For Lion's dairy and soft drinks business across the region, volumes fell by 3.2%, with the company blaming “subdued consumer confidence and a deflationary retail environment”.
Lion said it is planning to “leverage and optimise the health and wellness credentials of its portfolio”. It also revealed its has deleted 20% of its portolio to allowed “renewed focus on high performers such as milk based beverages, which continued to grow volume and value share during the half”.
Stuart Irvine, Lion's CEO, said: “Like all FMCG businesses, Lion is navigating a highly-competitive market against a backdrop of subdued consumer confidence and rising input costs. In this environment, we are firmly focused on high-value category and brand growth, while reviewing operational efficiency across the business."
Lion's parent company, Kirin Group, saw its first-half sales slip, partly due to a rise in sales tax in its domestic market of Japan.
To read Lion's official statement, click here.
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