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Beverage giant Lion Australia has restructured its leadership team, with James Brindley returning to lead the business alongside Anubha Sahasrabuddhe. David Smith, MD of Lion Australia for the past two years, will step down.

Lion Group CEO Sam Fischer thanked Smith for his contributions, and leading the company’s turnaround with a strong strategy and successfully integrating Fermentum into the business.

“David has been part of these conversations and contributed to the proposed changes, but after careful consideration, he has decided to leave Lion,” he continued. 

“The results can be seen in marketplace performance and customer feedback – and he leaves us well set up to continue to build momentum and perform into the future.”

In an internal announcement, Fischer outlined the changes to Sahasruddhe’s role and Brindley’s return to the business.

Sahasrabuddhe, who previously led the growth team, will now lead Lion Australia’s sales and marketing portfolios as chief growth and commercial officer in addition to her existing responsibilities.

“Anubha will continue to report to me and will remain a valued member of the group leadership team,” he continued.  

“Lion Australia’s sales director, Kerry Appathurai, and marketing director, Rachel Ellerm, will report to Anubha while continuing to remain core members of the Lion Australia leadership team.”

Meanwhile, Brindley will be stepping back into the role of MD and will be directly accountable for the group’s supply chain and the company’s functions for government & external relations, finance and people & culture.

Simon Edgar, the new GM of Lion’s craft spirits business, Four Corners, will also report to Brindley from the end of the third quarter of this year.

“James will play a key role with customers, supporting our marketplace success, and, along with Anubha, will be jointly accountable for overall Lion Australia business performance,” Fischer added. 

The changes will be effective immediately, with Smith agreeing to remain available to ensure a smooth handover.

Bubs Australia’s fiscal third-quarter gross revenue rose 25.9 per cent year over year to $19.9 million, largely driven by a growing demand for its goat’s milk infant formula in the US.

“The strong growth is primarily being driven by our USA operations where gross revenue was 82.8 per cent or $5.8m higher than the same period last year,” said Bubs CEO and MD Reg Weine.

“We continue to see strong demand for our products and brands in the USA, with scan sales for the quarter averaging approximately US$750,000 per week, a new quarterly record.”

The company also said that it has simplified and refreshed its US product portfolio to improve its shelf appeal and highlight its clean label credentials.

For the fourth quarter, the company said it is on track to exceed the forecasted revenue of $100 million with an underlying gross margin of 40 per cent.

Coles saw third-quarter revenue rise 3.4 per cent year over year to $10.03 billion, mainly attributed to higher supermarket sales.

“We have delivered another solid sales result across our supermarkets this quarter reflecting strong execution of our trade plans and our continued focus on delivering great value and great quality alongside improved availability,” said Coles Group CEO Leah Wecker.

“We have also seen a meaningful increase in customers interacting with our digital platforms and loyalty programs which is allowing us to engage on a more personalised basis with these customers.”

Supermarket sales revenue increased 5.1 per cent to $9.07 billion while liquor sales fell 1.9 per cent to $786 million. Other sales revenue stood at $182 million.

Meanwhile, e-commerce sales grew 34.9 per cent to $856 million.

During the quarter, Coles refurbished 11 stores, opened two and closed one, ending the period with 851 supermarkets.

Australians are buying more home-brand products and saving on alcoholic drinks amid ongoing cost-of-living pressures, the country’s second-biggest supermarket chain has revealed.

Coles’ total sales revenue rose 3.4 per cent to $10 billion for the third quarter of the 2024 financial year, driven by 5.1 per cent growth in supermarkets, a 34.9 per cent lift in online sales and an 8.8 per cent rise in private label brands. However, liquor revenue slid by 1.9 per cent.

“We know one of the key things that customers do when they’re trying to manage their budget is that they will look to trade into more affordable brands,” Coles chief executive Leah Weckert said on Tuesday.

Revenue growth for home brands (which was 8.8 per cent for the quarter) had outpaced overall supermarket growth for a while now, she said, as the company expanded its offerings, which now include Coles Finest products and a value range, Coles Simply.

“We’re really seeing customers go at both ends of the spectrum to look for value,” she said.

Coles-owned brands, which also includes Nature’s Kitchen, Wellness Road, Urban Coffee Culture, Daley St Coffee and more, make up about a third of the supermarket’s total sales.

Weckert said customers were starting to shift from the lower end of its private label brands to more premium own-brand options, which she said was a result of people choosing to replicate a dining-out experience at home.

As customers shop around to get a better deal on their groceries, Coles is looking to compete more closely with German discount supermarket chain Aldi and aims to narrow the price gap in categories such as kitchen and home cleaning as well as pet food, which are being sold by non-supermarket retailers including Bunnings, Amazon and Chemist Warehouse.

“We know at the moment that there are a lot of customers that are trying out Aldi, and being in a strong position on products that they would compare across the retailers is really important,” Weckert told investors and analysts.

Australians are continuing to cut back on liquor purchases by swapping champagne for prosecco or sparkling wine and choosing more affordable brands of red and white wine. At the same time, many appear to be moving back to beer, which had been experiencing a long-term decline, as it tends to cost less per serve, and gravitating towards canned or ready-to-drink products instead of spirits.

Inflation at Coles has eased from 6.2 per cent this time last year to 2.2 per cent, or from 6.4 per cent to 1.9 per cent excluding tobacco. Prices of fresh produce are falling, particularly apples, avocados and lamb, while bakery prices remain elevated amid higher wheat prices.

“We’ll continue to see some moderation in inflation overall, but I don’t think in the short term we’re moving into an overall deflationary position,” Weckert said.

Coles’ share price closed 0.3 per cent lower on Tuesday, with Jarden analysts describing the company’s figures as “a good result” and “a touch ahead of consensus”.

MST Marquee senior analyst Craig Woolford pointed to its decline in liquor sales as “very poor”.

“We expect Coles has lost market share in the quarter and may have done so because it reduced its level of price discounting and exited non-profitable bulk sales,” he wrote in a note to clients.

Coles and Woolworths face accusations of price gouging and have been under significant pressure to lower prices as Australians struggle with cost-of-living pressures across several fronts.

Weckert and her Woolworths counterpart Brad Banducci fronted a Senate inquiry into supermarket prices on April 16, where the pair were grilled on profits, and their relationship with suppliers.

The Senate committee has said it intends to call multinationals to front the inquiry. Weckert declined to comment on whether companies such as Nestle and Coca-Cola should be called to front the inquiry, but said these global giants owned “must-have products” in several categories.

“We definitely have experienced [multinational suppliers withholding stock] over time,” she said. “There can be quite robust conversations that occur between both parties, but these are really must-have brands for us in store, and we work as hard as we can to have a partnership approach.”

Coles chief executive Leah Weckert says keeping supermarket shelf prices down will require the cooperation of suppliers to ensure customers, who are shopping around more than ever, get a good grocery deal.

Ms Weckert, who was hauled before a Senate inquiry earlier in April along with outgoing Woolworths boss Brad Banducci, said suppliers and Coles would need to help fund discounts to lift sales volumes, which remains in positive territory.

“What we are having a lot of conversations with suppliers about at the moment is how we stimulate volume, and so to be able to do that effectively, it usually takes investment from both sides,” she told The Australian Financial Review after delivering third-quarter sales growth in the supermarket business of 5.1 per cent.

Ms Weckert said that with average Australians shopping at two or three supermarkets to get their groceries each month, it is critical to remain competitive.

Group third-quarter sales rose 3.4 per cent to exceed $10 billion, but liquor sales fell as shoppers elected to cut back their non-discretionary spending.

Shelf price inflation fell to 2.2 per cent in the third quarter from 3 per cent in the second quarter, due to moderating increases in packaged goods and deflation in fresh produce like avocados and apples, meats and bakery items.

Supermarkets revenue reached $9.1 billion, advancing 5.1 per cent, or 4.2 per cent on a comparable sales basis. There was upbeat commentary on the margin front, with theft moderating after the roll-out of loss technology – smart gates and new bottom-of-trolley detection of bulky items – across hundreds of Coles stores.

Coles’ Ocado pick-and-pack customer fulfilment centre in NSW is on track to open this quarter.

Ms Weckert said she expected to see more softness in packaged goods over the next few quarters. Talks with suppliers are “leading to more conversations around promotional activity,” she said.

“In areas like health and home, it is very competitive in the market between all the different players that are playing in that space at the moment and I think that is definitely leading most players to be very sharp on pricing.”

By July, short of another weather event, price inflation should fall further, especially fresh vegetables and fruit, she added.

Jarden analyst Ben Gilbert said the results were strong, suggesting ongoing market share gains. He flagged new opportunities in sectors such as pets were positive, but the key question now would be the gap versus larger rival Woolworths, which presents its third-quarter sales on Thursday.

In liquor, Ms Weckert said 30 per cent of shoppers were cutting back in purchases across its Liquorland, First Choice Liquor Market and Vintage Cellars shops. Early fourth quarter sales have been broadly in line with the March quarter, when sales fell 1.9 per cent to $786 million. Same-store sales fell 3.1 per cent.

“We’re seeing people trading into low-cost alternatives, so, for example, out of champagne into things like prosecco or Australian sparkling,” she said. “People are moving back into beer because this tends to be a category where there are cheaper alternatives.”

Big international brands in the spirits category are suffering with sales dropping away and shoppers looking to cheaper ready-to-drink options.

Ms Weckert does not believe Coles is losing market share to rivals like Endeavour’s Dan Murphy’s, saying Coles is moving away from less profitable bulk liquor sales.

Ms Weckert warned that Coles was facing higher cost of doing business across labour, rents, insurance and interest costs, and therefore keeping volumes up was important.

Supermarket CEOs have been in the political firing line over their pricing to beef up profits, market power and the treatment of suppliers. The Greens-led Senate inquiry is due to release its final report on May 7.

Food and beverage company Chobani has named Scott Hadley as MD of Australia and New Zealand.

Prior to the new role, Hadley served as CEO of TasFoods and held senior roles at Asahi Beverages, Fosters Group, GlaxoSmithKline, and Cadbury Schweppes.

“As we thought about the leader we needed, it’s clear Scott is the natural choice to lead the team in this next phase of our journey. He is proven and inspirational,” said Chobani founder and CEO Hamdi Ulukaya.

“He shares our passion for innovation, positively impacting humanity, and he believes deeply that food can and should be a force for good. We are thrilled to welcome Scott into the Chobani family.”

Hadley will report to Chobani president and COO Kevin Burns.

Shoppers will pay less and farmers will be paid more under the Albanese government’s pledge to make controversial reforms to address the nation’s cost-of-living crisis, which may force major supermarkets to reveal the markup they charge on fresh food and what they pay farmers.

An interim review of the grocery code of conduct released on Monday said compulsory regulations should be imposed on supermarkets to govern how they deal with suppliers, backed by heavy fines and new rules to address claims of price gouging and market manipulation.

Treasurer Jim Chalmers said the government agreed in principle with the recommendations and the current voluntary code of conduct would “absolutely” be beefed up to drive down prices for shoppers.

“The whole point of this interim report is: how do we make the code tougher, how do we make it compulsory, better dispute resolution processes and bigger penalties for people who do the wrong thing,” Chalmers said.

The government would also announce “very substantial changes” to laws governing company mergers to streamline the regime, which Chalmers said would make the economy more productive.

Price gouging claims were first levelled late last year when plummeting livestock markets delivered cheaper cuts of red meat to supermarket shelves.

Cattle prices fell 66 per cent across the east coast in the 12 months to October, and lamb prices were down 38 per cent in the same timeframe, but lamb cutlets sold in major supermarkets for about $43 a kilogram, and rump steak $28 a kilogram.

Farmers argue that a more transparent market would deliver fairer returns and predictable prices to enable them to invest in efficiency measures and drive down wholesale costs. Supermarkets would also be held to account if retail prices rise steeply above wholesale costs.

“If the senior management of a supermarket chain establishes an incentive system for their buyers and category managers that rewards maximising margins and penalises low margins, the buyers and category managers will squeeze suppliers as hard as possible,” the interim report stated. It was led by Craig Emerson, a former competition minister in the Rudd and Gillard governments.

Opposition Leader Peter Dutton said the interim recommendations supported by the government would not reduce prices at the checkout. “They are not going to be the solution consumers are looking for,” he said.

“I think this is a Mickey Mouse review that’s been conducted by a Labor mate with an outcome predetermined by the treasurer.”

Farmers told the inquiry that supermarkets have in some instances set unrealistic standards for the quality of produce and can reject shipments from suppliers who seek higher prices.

National Farmers Federation chief executive Tony Mahar said the government must deliver on its promise and prevent supermarkets squeezing farmers with unsustainable prices.

“We are going to hold them 100 per cent accountable to this process. What we don’t want is for it to be just a show of support, but then nothing materialises,” Mahar said.

“Senior management have got to be accountable for the pressure they put on their buyers. That behaviour should be transparent and if it’s detrimental to suppliers, then there should be ramifications.”

Coles stopped short of endorsing the recommendations, saying only they are committed to the objectives of “delivering value to our customers while maintaining strong, collaborative relationships with our valued suppliers”.

Woolworths said it supported a mandatory code “for all large retailers and wholesalers of groceries to engender public trust and to level the playing field for retailers and wholesalers alike”.

In Woolworths’ submission to Emerson’s review, the dominant grocery giant said major multinational suppliers were raising the prices of well-known brands, but would not give examples.

IGA operator Metcash said it did not object to the code “in its current form” becoming mandatory and was considering the report’s implications on the broader business. Aldi, which is a voluntary signatory to the code, said it supported the code becoming mandatory.

The Australian Competition and Consumer Commission said large fines as well as arbitration between suppliers and supermarkets were needed.

“The interim report highlights and recommends several changes that the ACCC sees as important, such as meaningful penalties and a more independent dispute resolution process,” a spokesperson said.

Consumer advocacy organisation CHOICE said Emerson’s interim report was recognition that voluntary codes were ineffective.

“Unfortunately, big businesses need strong incentives to comply with the law,” said CHOICE director of campaigns Rosie Thomas, who also called for stronger merger laws.

“This highlights why it’s important we have those merger laws right first, to stop supermarkets and other businesses growing bigger and more powerful in ways that harm consumers.”

Australia’s major supermarkets could face fines that run into the billions of dollars if they fail to comply with a revamped and mandatory code of conduct designed to protect farmers and families.

An interim review of the Food and Grocery Code of Conduct, to be released on Monday, has the country’s big four supermarket retailers and wholesalers – Woolworths, Coles, Aldi and Metcash, which supplies IGA – squarely in its sights with a series of recommendations designed to deliver cheaper prices for consumers and fairer prices at the farm gate.\

The review is being led by Craig Emerson, who was competition and small business minister in the Rudd and Gillard governments. He was tasked with undertaking the review by the Albanese government in January amid growing outcry that supermarkets were failing to pass savings on even as the prices paid by the big retailers for meat, fruit and vegetables were falling.

The federal government is under intense pressure to address cost-of-living concerns in the May budget. The interim review is being released as the Greens push new laws – which the Nationals and a handful of Liberals have backed – that would allow the Australian Competition and Consumer Commission (ACCC) and the courts to force corporations such as Woolworths and Coles to sell assets if they grow too big.

The big four signed on to the voluntary code of conduct when it was established in 2015, but in his interim report, Emerson found a heavy imbalance in market power between the major supermarkets and their smaller suppliers, who fear retribution if they complain under the current code.

To remedy this, Emerson has recommended the code be made mandatory and major breaches of the code should be met with fines which would be the greater of $10 million, 10 per cent of a company’s turnover or three times the benefit gained from the breach of the code. Penalties for minor breaches of the code would be set at up to $187,800.

If a fine of 10 per cent was imposed on one of the major supermarkets, it would probably be one of the largest fines in corporate history.

Coles reported turnover of just over $40 billion in the most recent financial year, so a fine of 10 per cent of its turnover would be about $4 billion. Woolworths reported sales of $48 billion.

Metcash reported $9.6 billion in food sales in the financial year to June. Aldi reported about $12 billion.

Emerson said the interim report offered the government a practical, low-cost solution and that the idea of imposing a fine equivalent to 10 per cent of turnover had been modelled on the franchising code of conduct.

“I hope this is well received,” he said. “I have sought to achieve the best of both worlds – a tough penalty regime for systemic bad behaviour but mediation and arbitration which, if agreed by the supermarkets under the constitution, would do most of the work to resolve complaints.”

In the report, Emerson says critics of the voluntary code point to the small number of disputes filed under the code as evidence of its failure.

“They nominate the fear of retribution by supermarkets as the dominant reason for so few disputes being raised by suppliers,” Emerson wrote.

That retribution could lead to unfavourable terms and conditions being imposed on suppliers, relocation of products to less popular locations in stores and even delisting of a supplier’s products.

Treasurer Jim Chalmers said the review was an important part of the government’s competition reform agenda, which included an ACCC inquiry into supermarket prices, a boost in funding for supermarket price monitoring by Choice and a comprehensive review of competition policy settings.

“We want a fair go for families and a fair go for farmers,” Chalmers said.

“This work is all about making our supermarkets as competitive as they can be so Australians get the best prices possible.”

Under Emerson’s proposed law changes, the ACCC would help enforce the code but, rather than leaving the enforcement process to potentially years-long court cases, an independent arbitration system would be used so suppliers that brought a complaint would not go bankrupt while waiting for their case to be heard.

The ACCC would continue to be able to issue public warning notices, seek injunctions, initiate court proceedings and accept court-enforceable undertakings.

Compensation for suppliers affected by breaches of the code by one of the major supermarket chains would be capped at $5 million. Emerson also advocated for an anonymous complaints process to be established.

Eight recommendations, including the penalties making it mandatory, and changes to the code to ensure supermarket suppliers don’t fear retribution will not change between now and the final report being handed over on June 30 but three recommendations, including how to implement low-cost dispute resolution, are still to be finalised.

Quadrant Private Equity is understood to have recently launched a beauty parade to pick an adviser to sell Darrell Lea owner The RiteBite Group, say sources.

It is understood that investment banks have received requests for a proposal in recent weeks.

The understanding is that the Sydney-based Quadrant had aspirations to sell the business this year.

However, some believe it now may be backing away from that plan as the cost of cocoa has gone through the roof which is likely to push up the cost of chocolate across the industry even further in 2025.

This may cause product costs to rise sharply, impacting earnings.

The private equity firm was believed to be thinking about a sale of RiteBite in 2021 but pulled back in an effort to focus on growing earnings.

Likely buyer candidates could be groups like Kohlberg Kravis Roberts, which owns Arnott’s Biscuits, Fererro Group, of Ferrero Rocher chocolates and Nutella, and the locally based Pacific Equity Partners.

Mondelez would be ruled out as a buyer because it owns chocolate giant Cadburys.

Quadrant bought Darrell Lea in 2018 for about $200m before creating the RiteBite Group the next year.

RiteBite owns other confectionery and snack brands such as New Zealand’s RJ’s and Life Savers, along with Well Naturally, The Bar Counter, Munchme, Systemax, Planet Food, CrispyFruits and Smooze.

The brand Darrell Lea is best known for its licorice, chocolate bullets, All Sorts and Rocklea Road sold widely now in supermarkets and has been run by former Allied Pinnacle boss James Ajaka since 2020.

Mr Ajaka told The Australian last week that the rising cocoa price had been the greatest challenge across the industry, increasing 220 per cent for the past two years.

The Wall Street Journal reported before Easter that cocoa futures topped $US10,000 a metric ton for the first time ever as major West African producers like Ghana and Ivory Coast reported lacklustre harvests due to bad weather and crop disease.

The industry as a whole has responded through price rises, ranging from 5 to 11 per cent in that two-year time frame.

Darrell Lea was a family business founded in 1927. Quadrant purchased it from the Quinn family and now has plans to expand further into the US market, which accounts for a fifth of its $500m of annual sales.

The business had collapsed in 2012 after earlier having hundreds of retail stores across Australia, and the Quinn family, founder of VIP Petfoods, bought it out of administration, reportedly for about $25m.

Reports are filtering through the private equity market of a number of beauty parades afoot to pick banks to sell businesses in funds from the second half of the year onwards.

The rising interest rate environment in the past 18 months has made asset sales hard because of the large debt costs, so funds have had few strong divestment opportunities for some time.

Quadrant also wants to offload its Affinity Education business this year and Amart furniture company, and an adviser is also potentially being sought for that company after Jefferies had been on the ticket.

Other sellers are Potentia and Crescent Capital, while global fund Kohlberg Kravis Roberts is believed to be holding back on divestments for now, until interest rates fall.

According to a report from MergerMarket, private equity and venture capital exits for 2023 totalled $US7.8bn across Australia and New Zealand.

This compared with $US20.7bn in 2021 and $US32.8bn in 2022 as managers made the most of highly liquid markets when interest rates were low.

Aldi bagged the Supermarket of the Year 2023 title from the Roy Morgan’s Customer Satisfaction Awards – for the seventh time and the fourth consecutive year.

The supermarket chain boasted an average 95.7 per cent customer satisfaction score.

“This the fourth consecutive year that we’ve received the award, and at a time when shoppers are continuously seeking better value, we have never been more aware of the need to continue to deliver on our promise to offer Aussies the highest quality products at the lowest possible prices,” Aldi Australia director Simon Padovani-Ginies said.

Aldi claims to have delivered $3.4 billion in savings to local consumers in 2023.

“Aldi’s business model is about saving people money. We aim to cut out unnecessary costs and pass these savings onto customers.”