Coca-Cola Amatil, SABMiller, Fosters Group in love triangle

Coca-Cola Amatil, SABMiller, Foster's Group in love triangle

Coca-Cola Amatil's MD has said that the company plans to return to beer in Australia in 2014, as last orders are called on its joint-venture deal with SABMiller.

The UK-based brewer's completion of the Foster's Group takeover means that the SABMiller is now obliged to buy Coca-Cola Amatil(CCA) out of their joint-venture, Pacific Beverages. CCA said today (16 December) that it will sell its 50% stake in Pacific for AUD305m (US$304.5m), with cash proceeds expected to come through in the first quarter of 2012.

As part of the deal, the Australia-based Coca-Cola soft drinks bottler has agreed to stay out of the country's beer industry for two years. But today, its MD, Terry Davis, said that CCA still has ambitions in brewing both inside and outside of Australia.

"We are not restricted in other markets and we would expect to be back in the beer business in Australia in early 2014," he said in a company trading update. As part of the fallout from SABMiller's takeover of Foster's, CCA has the right to acquire either all or part of Foster's' Fiji brewery, alongside Foster's' non-alcoholic drinks and RTD spirits business outside of Australia.

CCA will begin due diligence on these assets early next year. It said that it expects "an outlay of between AUD100m and AUD180m for the assets". 

Given that it is already the dominant player in Australian soft drinks, CCA has sought to increase its alcoholic drinks operations as a way of generating fresh sales. Davis said today that the group has developed a "strong and growing spirits business" in Australia, largely thanks to its distribution deal with Beam Inc.

For 2011, CCA said today that it expects net profits after charges to dip by 0.5% versus 2010. Excluding charges, profits should rise by 5%, it said, backed by better sales momentum in Australia. Despite lower levels of consumer spending, the group has seen "solid" rises in volume sales since November, when the Reserve Bank of Australia cut official interest rates.