News

4 Feb, 2019
Dulux paints bright outlook as profit climbs
The Australian Financial Review

The boss of Australia's largest paint company, Dulux Group, says while the new housing market is in a "late cycle" position and coming off its peak it is still expected to remain relatively strong, while homeowners repainting existing houses will deliver solid growth.

Patrick Houlihan, who has been at the helm of Dulux for almost 11 years, said 65 per cent of the company's end market exposure came from maintenance, home improvement and renovations in Australia, and would continue to be a robust driver of the business.

Dulux on Thursday announced a 9 per cent rise in first half net profit after tax for the six months ended March 31 to $79.2 million, while revenues increased 4.2 per cent to $918 million.

The company lifted its first half dividend by 7.7 per cent to a fully franked 14.0¢ per share, to be paid on June 12.

Dulux is also working closely with Wesfarmers in the United Kingdom, which has made a big bet on the UK hardware market with the acquisition of the 244-store Homebase chain in early 2016 as it tries to build a profitable Bunnings business in the UK.

Dulux has a range of Selleys products in Bunnings and Homebase in the UK.

Wesfarmers is now weighing up whether it should continue with the hardware chain, which is struggling to make headway and is a big drag on the broader Wesfarmers.

Mr Houlihan said he was hopeful that Wesfarmers would persist with the UK plans.

"If Bunnings continues we would welcome that," Mr Houlihan said.

It provided a "pathway" for the Selleys business in particular in the UK, but he emphasised that the UK was only a small part of the overall Dulux operations and that if Bunnings did shut down in the UK there were other options.

"We were on the ground there in terms of our own activities before Bunnings turned up," Mr Houlihan said.

In Australia, Mr Houlihan said the 10 million dwellings in Australia, which are older than 20 years, will keep providing a robust platform for the Dulux operations to thrive.

He said there was a strong correlation between GDP growth and decorative paint market volumes, and even though house price houses were softening, there were other important positive factors such as low interest rates and solid consumer confidence.

New housing makes up 15 per cent of Dulux revenues but was still strong in an historical context.

Mr Houlihan said even though the high-rise apartment market was softening there was still good demand in smaller apartment projects.

"There still seems to be a big pipeline of low-storey residential," he said.

The Dulux Australasian operations produced a 5.2 per cent rise in earnings before interest and tax to $93.1 million, while the Selleys and Parchem Australasian business generated a 5.1 per cent rise in EBIT to $14.4 million.

Dulux also operates the B&D Group garage doors division and the Lincoln Sentry kitchen cabinets hardware business and both of those divisions delivered solid gains too.

Dulux also announced that chairman Peter Kirby would be retiring from the board on June 30, and that Graeme Liebelt would be taking over in the that position.

29 Jan, 2019
Marley Spoon secures more than $30m in funds to support meal-kit growth
Financial Review

Meal-kit delivery business Marley Spoon, which is burning through $5 million a month, has secured more than $30 million in debt funding to support growth until it starts to break even in 2020.

Marley Spoon, the second-largest player in the $500 million Australian meal-kit market, said on Tuesday it had raised €10 million ($15.95 million) in bridging loans from two funds affiliated with US-based venture capital firm Union Square Ventures and €2 million from two minority shareholders.

The company, which has a market valuation of $56 million, will seek shareholder approval in March to convert the loans to convertible bonds.

 

Marley Spoon CEO Fabian Siegel says more than $30 million in new funding will help support the meal-kit company until it breaks even in 2020. Louie Douvis

It has also signed a €2.5 million two-year term loan agreement with German lender Berliner Volksbank, extended the bulk of an existing €6.7 million loan from Moneda until 2020, and entered into a €2.6 million equipment-leasing agreement with CSC Leasing to finance equipment to support the automation of production lines in the US and Australia.

Marley Spoon shares rose 15 per cent to 55¢ in thin trade on Tuesday after gaining 27 per cent last Thursday. The shares have plunged 75 per cent since the company listed last July amid question marks over the long term economics of its business model.

Path to breaking even

"It did look like it was running out of money, so I'm not surprised the stock has had a little bit of a bounce," Cyan Investment Management director Dean Fergie said. It was likely to be easier for the company to raise debt rather than issue new shares at a deep discount to its $1.42-a-share issue price last year.

Marley Spoon chief executive Fabian Siegel said the funds would help support the company on its path to breaking even on an EBITDA (earnings before interest tax depreciation and amortisation) basis in 2020.

However, the funding will come at a cost, incurring interest between 8 per cent and 12 per cent.

Marley Spoon also warned it was likely to lose €36 million EBIT in calendar 2018, compared with revised guidance for EBIT losses between euro 32 million and 34 million, after spending more on marketing to attract customers.

The company, which competes in Australia with HelloFresh, has been marketing heavily to attract customers, launching a television advertising campaign in early January taking aim at boring mid-week meals such as spaghetti bolognese.

The meal-kit market in Australia is growing more than 10 per cent a year, according to UBS, fuelled by time-poor shoppers. But take-up or market penetration is low at 9 per cent and in a recent UBS survey, only 5 per cent of consumers said they intended to subscribe over the next year.

Supermarket giants enter fray

Coles and Woolworths have also entered the market, launching a range of meal kits as part of their convenience strategies.

Marley Spoon sold 15 million meals in Australia, the US and Europe last year, mostly (75 per cent) to existing customers. Global sales rose 65 per cent in the December quarter - buoyed by additional menu choices - lifting annual sales 78 per cent to €92 million.

However, sales growth in Australia slowed to 15 per cent in the final quarter, less than half the rate of growth in the September quarter.

"Our increased investment in marketing at stable acquisition costs is paying off as we keep building our loyal customer base to serve as the foundation for strong growth in 2019 and beyond," Mr Siegel said.

Operating cashflows improved in the December quarter, from negative €11.2 million to negative €9.5 million, leaving the company with about €9 million in cash at year's end.

Under the revised loan agreement with Moneda, Marley Spoon must pay €2 million on February 20 and another €1 million on August 31.

29 Jan, 2019
Why the Sequoia Fund bought A2 Milk
Financial Review

A2 Milk is on of three new stocks added to a concentrated and highly regarded 49-year-old global portfolio known as the Sequoia Fund run by New York-based value manager Ruane, Cunniff & Goldfarb​. 

The addition was disclosed in the manager's investment letter of January 28 which shows the strategy owns just 23 stocks that meet its "open-minded approach to value". That means an emphasis on quality and growth and has led Sequoia to invest in stocks such as Alphabet, Berkshire Hathaway and Liberty Media.

Sequoia was attracted to A2 because it has "an unusually long story behind it". The fund manager acknowledges the theory that some populations of cows thousands of years ago developed a genetic mutation which affected the protein passed through their milk.

 

Sequoia thinks A2 can be as effective branding milk as Chobani has been marketing Greek-style yoghurt. Brendon Thorne

"While this is far from settled science, some researchers and nutritionists believe that because people have only been drinking A1-bearing milk for a relatively short period by evolutionary standards, our bodies have a harder time digesting it than 'pure' A2 milk," the manager wrote.

But for the purposes of mounting an investment case, Sequoia thinks A2 can be as effective branding milk as Chobani has been marketing Greek-style yoghurt.

"A good analogy here is Greek yoghurt, which is believed in some quarters to confer health benefits you can't get from regular yoghurt," the letter explains. A2-protein milk is a commoditised product, like yoghurt

"A2 Milk is attempting to do the same thing, to great effect thus far. Riding powerful consumer trends favouring products perceived to be healthy and natural, A2 has become the leading premium milk brand in Australia while making rapid inroads into the massive and quality-obsessed infant formula market in China.

"An effort to penetrate the US milk market is also showing early promise."

This won't be news to New Zealand and Australian investors who are familiar with the A2 story since it was floated in 2015 on the ASX, and in 2012 on the NZX main board. Since then the stock has ridden the Chinese consumption boom because of demand for its infant formula. A2 shares closed at $11.62 on the ASX on Tuesday.

"Notwithstanding its remarkable success to date, A2 remains a young company, and much will depend on whether management can navigate a thorny distribution landscape in China, solidify the positioning of an embryonic brand and exploit growth opportunities in new geographies and product lines," Sequoia argued.

"With good execution, particularly in China, we think A2 could become a much larger business than it is today, more than justifying the statistically high price-earnings ratio we paid for our shares."

The other stocks it added were Electronic Arts and Melrose.

A co-founder of Ruane Cunniff​, the late Bill Ruane, was a long-time friend of Warren Buffett. The strategy stumbled on account of a massive stake in Valeant Pharmaceuticals which ended a celebrated winning streak for the investment manager. Valeant nearly collapsed in 2016, , under the weight of an accounting scandal, and has since reinvented itself as Bausch Health.

29 Jan, 2019
Tesco to cut thousands of jobs as part of wide-ranging corporate overhaul
Financial Review

London | Tesco plans to slash thousands of jobs as the UK's largest supermarket group embarks on a shake-up to cut costs in the face of intense competition.

Tesco said on Monday that about 9000 positions were at risk as it reviewed in-store fresh food counters and head office staffing levels – but up to half the workers affected were expected to be redeployed to new roles.

The measures come four years after Tesco Launched a turn-around program under chief executive Dave Lewis. That program, which included selling assets such as Dobbies Garden Centres and moving the company's head office, is designed to save £1.5 billion ($2.75 billion) by the 2019-20 financial year.

 

Tesco briefed staff at dozens of stores throughout the UK on the wide-ranging measures. Among the changes are plans to close fresh food counters in about 90 stores.  DARREN STAPLES

"Whilst this turn-round continues, it does so in a competitive and challenging market," Tesco added. German discounters Aldi and Lidl continue to open about 100 stores between them each year, and seem content with low operating margins. Traditional rivals such as Wm Morrison and Asda have also improved their operational performance over the past two years. 

Tesco shares closed 1.3 per cent lower at 222p – about the same level they were when Mr Lewis took over as chief executive in September 2014. 

The retailer on Monday (Tuesday AEDT) briefed staff at dozens of stores throughout the UK on the wide-ranging measures. Among the changes are plans to close fresh food counters in about 90 stores. There will also be changes to stock control and merchandising processes, reducing workload.

Changes will also be made at the retailer's head office, which Tesco said would create "a simpler and leaner structure".

"We will be doing all we can to help colleagues affected by these changes, including offering redeployment opportunities wherever possible," Tesco said.

Steve Dresser, managing director of consultancy Grocery Insight, said the changes in part reflected a generational shift. "Counters are used mainly by older people. Younger shoppers are happy to wander round scanning things with the smartphones and using self-checkouts." 

Fresh food counters are also expensive to operate and their pricing structure has to some degree been eroded by the price cuts Tesco has made on its pre-packed ranges in response to competition from discounters, he added. The supermarket has invested heavily in a range of "farm brand" ranges of meat, poultry and fresh produce designed to match discounters' prices. 

Bruno Monteyne, food retail analyst at Bernstein and a former supply chain director at Tesco, said he was reassured by the plans and estimated they would save as much as £170 million a year. "This is the final big phase of rethinking the operating model. It is balanced and most likely well-tested," he said.

Along with cutting costs, Mr Lewis set a target of returning to a 3-4 per cent operating margin by 2019-20.

29 Jan, 2019
Laguna Bay and Peter Fogarty in McWilliam's Wines rescue
Financial Review

Agricultural fund manager Laguna Bay and West Australian businessman Peter Fogarty have injected $16 million into ailing McWilliam's Wines in a recapitalisation that new chief executive David Pitt says will enable it to break even this year after a dive into the red.

Mr Pitt, who took the helm in July, said the historic wine company had to modernise and start making more wines that consumers wanted to buy rather than focusing too much on the past.

"We need to get the balance right," he said.

 

A McWilliam's advertisement from the 1970s. The new CEO says McWilliam's needs to modernise and he aims to be in a break-even position in 2018-19 after a $16 million injection from outsiders. Supplied

He also intends cutting up to $10 million in costs from McWilliam's operations and wants the winemaker to move further up the value chain to focus more on higher quality wines.

He said a new range under the MCW banner was showing good signs and was evidence of a more modern, consumer-focused approach, steering clear of "wines that we're making for ourselves rather than what consumers want".

"If you don't play the game properly, then you are going to miss out," Mr Pitt said.

Laguna Bay is injecting $9.6 million into the company via the Margaret River Wine Production vehicle controlled by Mr Fogarty, who has extensive wine interests in Western Australia's Margaret River region, and also controls the Lake's Folly brand in NSW's Hunter Valley. Mr Fogarty is pumping a further $6.2 million in via the MRWP entity.

The looming recapitalisation and heavy losses at McWilliam's were revealed in The Australian Financial Review early on Tuesday.

Mr Fogarty said he and Mr Pitt were "aligned on strategy" and the two groups would work more closely.

Mr Pitt said McWilliam's generated 85 per cent of its sales in the domestic market, but China would be a much larger focus: "We certainly see that as a significant growth opportunity."

Been through upheaval

He said the "cash flow challenges" of the past year would be addressed partly by the recapitalisation, but costs needed pruning and "we're obviously starting that journey now". The company had also had too many brands and product lines. "We've diluted ourselves by playing with a number of different brands," he said.

McWilliam's, with a history dating to 1877, is an unlisted public company owned by 70 family members. It is the sixth largest wine group in Australia.

It has been through upheaval after shifting its bottling line and packaging operations from suburban Sydney to its Hanwood winery in the Riverina region in NSW, and faced lower yields from its vineyards after drought in the Riverina and Hunter Valley. It has also been squeezed after being too reliant on the commercial wine segment under $10 per bottle, where margins are razor thin.

The company sells brands including Mount Pleasant and Hanwood Estate.

Documents lodged with the Australian Securities and Investments Commission late last month show McWilliam's made a bottom-line loss of $5.5 million for the 12 months ended Junes 30, 2018, but that losses had been reined in from the disastrous $22 million tumble into the red of a year earlier. Sales revenue fell 13 per cent to $87.4 million in 2017-18.

Mr Fogarty bought a controlling stake in the Evans & Tate wine brand and production assets from McWilliam's in October 2017 for $32 million under a previous deal, where McWilliam's was left with 30 per cent. McWilliam's also entered into a three-year loan agreement with MRWP at that time, and has been in breach of some of those financial covenants.

Mr Fogarty's broader wine operations include Deep Woods, Millbrook Winery and Smithbrook in Western Australia, and Lake's Folly.

McWilliam's also has a $12 million trade receivables facility with AssetSecure, and at June 30 was in breach of an interest cover ratio covenant connected to that facility.

McWilliam's also breached a loan contract with privately owned Californian wine giant E&J Gallo, which held a small stake in McWilliam's until late 2014. Under a loan agreement with E&J Gallo, $1.675 million was due to be repaid on July 1 last year but McWilliam's did not make the payment. Six weeks later, the companies agreed the amount would be repaid in three instalments.

29 Jan, 2019
UK grocers warn of chaos in no-deal Brexit as Tesco supermarket sacks 9000
Financial Review

London | Britain's food supply could be seriously disrupted if it leaves the EU without a deal, a lobby group representing Sainsbury's, Asda, McDonald's, KFC and other firms said on Monday.

Problems will be particularly acute in the lead-up to the March 29 deadline, when Britain is scheduled to quit the bloc, and when most of its produce from lettuces to tomatoes is out of season, with a higher per centage imported, the British Retail Consortium (BRC) added.

Coming at the same time as the retailers' warning was news that Tesco, the country's biggest retailer, may axe as many as 9000 jobs in its UK stores and head office as it tries to cut costs.

 

British supermarket chain Tesco has announced a major revamp of its operations across the country.  supplied

About one third of the food eaten in the UK comes from the EU, and in March, 90 per cent of Britain's lettuce, 80 per cent of its tomatoes and 70 per cent of soft fruit will be sourced from the bloc and subject to new customs duties.

The statement, signed by the bosses of the Co-operative, Marks & Spencer, Lidl and Waitrose supermarkets, was published before key Brexit votes in Parliament set for Tuesday in London (Wednesday AEDT).

Responding to the BRC's letter, a spokesman for Prime Minister Theresa May said plans were in place to keep customs working and traffic flowing in the event of a hard Brexit. Food security was high and that would "continue to be the case whether we leave the EU with or without a deal, he said.

The bosses said in the letter they had been making contingency plans with suppliers but "it is not possible to mitigate all the risks to our supply chains and we fear significant disruption in the short term as a result if there is no Brexit deal.

"We are therefore asking you to work with your colleagues in Parliament urgently to find a solution that avoids the shock of a no-deal Brexit on 29 March and removes these risks for UK consumers."

Only about 10 per cent of Britain's food imports are currently subject to tariffs. If the UK were to revert to WTO Most Favoured Nation status in a no-deal scenario, it would greatly increase import costs, which could in turn put upward pressure on food prices, the BRC said.

 

A spokesman for Prime Minister Theresa May said plans are in place to keep customs working and traffic flowing in the event of a hard Brexit. Alastair Grant

The signatories said they were stockpiling where possible, but noted that all of Britain's frozen and chilled storage is already being used, with very little general warehousing space available.

Tesco, which employs more than 300,000 people says it may be able to redeploy about half of the 9000 positions that it is going to eliminate, a move that would "limit the impact" on its workforce.

The main change in its supermarkets across the country would be to its fresh meat, fish and delicatessen counters. It expects to close counters in about 90 stores, with the remaining 700 trading with either what it called "a full or flexible counter."

Tesco's move shows its operation diverging from rivals such as No. 4 player Morrisons, which emphasises its army of trained butchers, fishmongers and other specialists who prepare food in-store.

All of Britain's big four food retailers - including No. 2 Sainsbury's and No. 3 Asda who want to combine - are chasing efficiency savings to fund price cuts so they can better compete with discounters Aldi and Lidl, who are still winning market share.

Tesco set out a plan in October 2016 to reduce operating costs by £1.5 billion pounds ($2.8 billion) over three years through efficiencies in its distribution network and stores and from procurement savings.

It needs the cost savings to help achieve its target of a group operating margin of 3.5 per cent to 4.0 per cent by financial 2020, up from 2.9 per cent in fiscal 2018.

23 Jan, 2019
Subway strikes national delivery deal with Uber Eats
Inside Retail

Subway on Monday announced a strategic partnership with Uber Eats, making it the latest national quick-service restaurant (QSR) business to embrace third-party delivery apps.

The deal will see more than 700 Subway restaurants offer on-demand delivery, as the company seeks to tap into the growing demand for convenience.

“With almost 14,000 searches on the Uber Eats app for ‘sandwiches’ each month, we know Subway delivery will be a game-changer for Subway fans,” Kate Brody, Subway ANZ director of marketing, said.

This is in line with a spate of national QSR chains, including McDonald’s, Hungry Jack’s and KFC, that have started offering delivery of online food orders through third-party apps like Uber Eats, Deliveroo and Menulog.

While delivery traditionally has been viewed by restaurants and consumers as a time-saving option for dinner, the ease of ordering through smartphones and ability to scale delivery fleets through the gig economy have redefined delivery for any time of the day.

According to Uber Eats, the number of lunch orders on the app more than doubled in 2018, which is just one more reason that delivery has become an attractive proposition for QSR chains like Subway.

While some restaurants have highlighted the large cut that such delivery platforms charge, Subway ANZ country director Geoff Cockerill told IR in a previous interview that they are definitely a win.

“There is a cost to it, but you can price your menu items accordingly. People purchasing products on third-party delivery apps are prepared to pay more than they are for normal menu items,” he said.

“If a menu item costs $10 and the delivery platform charges [the restaurant] a fee of 30 per cent – I’m making up these numbers – you would price your product somewhere in between. If you price it at $13, you’re probably going to lose your guest, but if you price it somewhere in the middle of $10 and $13, you’re likely to drive a profit because you’re utilising the resources you already have in the restaurant.

“What you’ve also got to remember is that it doesn’t matter if we’re a firm believer in this or if the restaurant is, it’s what the guests want. They want it now, so either you’re in it, or you’re not, and our view is you need to be in it.”

 

23 Jan, 2019
Australian wine exports grow by 10 per cent
Inside FMCG

There was a strong demand for Australian wine overseas in 2018, with an increase in wine exports of 10 per cent in value to $2.82 billion.

Bottled wine shipments increased by 7 per cent in value to $2.24 billion and decreased in volume by 3 per cent. This saw the average value of bottled wine grow by 10 per cent to a record $6.20 per litre FOB.

“These figures demonstrate strong international demand and they highlight how Australian wine exporters have worked diligently to develop and maintain international markets”, Andreas Clark, CEO Wine Australia said.

“This demand translated into growth in almost all price segments.”

Unpackaged wine reached record levels in value and volume. The average value of unpackaged wine continued to grow, increasing by 14 per cent to $1.17 per litre.

Red wine continues to be the most popular wine style exported from Australia, and value increased by 12 per cent to $2.14 billion in the year ended December 2018. The value of white wine exports also grew – by 10 per cent to $607 million.

There was growth in Australian exports to nearly every region of the world last year. Exports to North America are starting to level out after more than 12 months in decline. The value of exports to the region declined by 0.1 per cent to $636 million.

Northeast Asia grew by 19 per cent to $1.23 billion, Europe grew by 7 per cent to $615 million, while Southeast Asia grew by 3 per cent to $171 million.

 

23 Jan, 2019
API investor Andy Gracey wary of Sigma Healthcare merger
Financial Review Supplied

 

The Australian Ethical portfolio manager, who controls about 3 per cent of the drug wholesaler and pharmacy marketing outfit, said he struggled to see how the $1 billion-plus merger benefited API investors.

"We're not particularly comfortable with the bid in terms of we think Sigma was in a tough situation and it feels like API is kind of handing them a pretty reasonable opportunity, and to the detriment of API shareholders," he said. "We feel like we're giving away more than we're getting."

API and Sigma are competitors in the $14 billion pharmaceutical wholesaling business alongside a third ASX-listed player, EBOS. The three operate in a highly regulated, government-subsidised sector, to deliver prescription and over-the-counter medicines to pharmacies around the country. Each wholesaler has exclusive distribution and support agreements with different brands – such as API and Priceline, or Sigma and Amcal.

Sigma investors got a shock in mid-2018 when the pharmacy industry gorilla Chemist Warehouse pulled its agreement in favour of a new exclusive distribution contract with EBOS.

API shares collapsed in the weeks after the proposed merger was announced on December 14, but are back trading at the $1.48 level they were at previously. The shares are flat over the year and at current levels are trading well below a 12-month high of $1.935 hit in September.

Earnings target

Sigma shares are down 32 per cent in the past year, mostly due to concerns about its earnings prospects after losing the Chemist Warehouse contract. They jumped 44 per cent to 58¢ on the merger news and have traded around that level since. The stock, however, has lost 32 per cent in the past year.

Given that change to its business Mr Gracey said he is concerned that Sigma's 2020 earnings target of $40 million to $50 million is "overly optimistic". Similarly, estimates from Sigma that losing the Chemist Warehouse contract will free up about $300 million in working capital may underestimate what's required to run the remaining business, he said.

Under the proposal API is seeking to buy out Sigma investors in a mixture of 0.31 API shares and 23¢ cash for each Sigma share.

 

 

23 Jan, 2019
Pub owners bristle at Carlton & United Breweries' dual role as online steps up
Financial Review Supplied

 

Angst levels are rising among the country's 5500 hotel owners at the e-commerce strategy of the owner of big beer brands Victoria Bitter and Carlton Draught.

On-tap beer sales inside hotels and bars by the two main players in Australia's beer industry, CUB and Lion, are still a major money-spinner for pub owners along with sales of packaged beer made through attached bottle shops and drive-through operations.

CUB and its parent AB-InBev, the world's biggest brewer, in November began a trial selling CUB products via eBay in a direct-to-customer push sweetened with sharp discounts.

This followed the separate acquisition in August of Australian-based online e-commerce platform BoozeBud which sells alcoholic products direct to consumers.

BoozeBud's current offerings include a promotion to buy three cases of "Aussie icons" beer to save 10 per cent, mostly featuring CUB products, although there are a handful of rival beers on offer too.

Australian Hotels Association chief executive Stephen Ferguson said concerns were being raised by hotel owners. They are worried about the blurring of the lines between supplier and retailer.

"This is a new channel," Mr Ferguson said. "We've had issues raised by some of our members".

Craft beer acquisitions

The AHA was trying to resolve the concerns initially through meetings with CUB.

"We're just trying to better understand what they're trying to achieve and to let them know of our concerns," Mr Ferguson said.

A CUB spokesman said on Tuesday that the brewer was in talks with the AHA to listen to their concerns. "We deeply value our relationships with local bottle shops and hotels across the country," the spokesman said.

The angst comes as all mainstream beer companies battle against declining beer sales, with consumers increasingly shifting towards smaller craft brewers.

The situation has close similarities to an angry stoush which flared almost two decades ago at the height of the dotcom boom in 2000. CUB's then parent, the ASX-listed Foster's Brewing Group, sparked outrage when it bought a 25 per cent stake in an online retailer, Wine Planet.

Big liquor retailing players were furious behind the scenes at Foster's daring to move into the retail space, and threatened to use their clout to undermine it by pulling CUB products off their shelves. Foster's subsequently sold its holding after Wine Planet suffered heavy losses and failed to make the inroads Foster's had hoped for.

Foster's in 2011 split into beer and wine divisions, with ASX-listed Treasury Wine Estates being spun off into a wine-only operation.

AB-Inbev acquired BoozeBud last year via its entrepreneurial division known as ZX Ventures. CUB became part of AB In-Bev in 2016 through a global mega-merger where AB In-Bev acquired SABMiller, which had bought the Foster's beer business in 2011 for $12 billion.

AB-InBev and CUB have been buying up craft beer brands such as Sydney's 4Pines and the Adelaide-based Pirate Life in 2017 to try to generate more growth.

The craft beer industry in Australia is worth an estimated $740 million annually and is growing at 15 per cent to 20 per cent a year, outstripping mainstream beer sales, which are going backwards.

CUB is the No.1 beer company in Australia, with a market share of about 46 per cent, ahead of big rival Lion, which has 42 per cent.

 

APPLY NOW

Upload Resume/Portfolio

One file only.
5 MB limit.
Allowed types: pdf, jpg, jpeg, doc, docx.
One file only.
5 MB limit.
Allowed types: pdf, jpg, jpeg, doc, docx.
* Required Fields. † For Designers, Design Assistants and Product Developers please attach your Portfolio including sketches, illustrations, trend boards, finished products etc... Please send through in pdf or jpg format. File uploads maximum size 5MB.