Lion Nathan faces tough market conditions

Modern Brewery Age, Feb 14, 2005

Lion Nathan's beer sales in Australia and New Zealand are being battered by price competition, a decline in demand for draft beer and bad weather, the company said as it wrapped up its first fiscal quarter.

The brewer said that its Australian and New Zealand beer business has experienced difficult market conditions at the end of the first quarter, which continued into January, and beer volumes fell compared with the same period last year.

"The performance of our Australian and New Zealand beer business, particularly since the end of December, has been disappointing," said Lion Nathan CEO Rob Murray. "It is not easy to forecast what impact this will have on our full-year result."

Lion Nathan said beer volumes in Australia in the first quarter had fallen 2.6 per cent because of price competition and a drop in draft beer sales. In New Zealand, beer shipments fell 4.3 per cent as a result of poor weather and new on-premise regulations. Lion Nathan said it is facing stiff competition from other beer brands and ready-to-drink spirits.