Australian beverage demand flat, says Coca-Cola

By Ankush Chibber

- Last updated on GMT

Australian beverage demand flat, says Coca-Cola

Related tags Spc ardmona Alcoholic beverage Beer Coca-cola

Once-surging demand has slowed among Australian consumers over the last quarter, according to Coca-Cola Amatil (CCA), the maker of Coke in the country. 

According to CCA, while there has been an improvement in volume and market share in the Australian beverage business in the third-quarter of the year, the fourth-quarter is not seeing the expected post-election uplift in consumer spending.

“The non-grocery business has continued to grow volumes in the second-half, however consumer demand has been more subdued than expected,”​ said Terry Davis, group managing director at CCA.

“While we have seen some improved momentum in the Australian grocery channel, with carbonated beverages returning to growth and an improvement in market share, the aggressive competitor pricing activity has continued, which has limited price realisation in the half to date,” ​he added.

Alcohol on a high

According to CCA, its alcohol, food and services division is trading in line with expectations, where the Beam portfolio continues to gain share in spirits and the alcoholic ready-to-drink category.

Davis also announced that CCA had entered into a long-term exclusive agreement to distribute American craft beer Samuel Adams into Australia from mid-December.

“With just over a month left until CCA re-enters the beer and cider market in Australia, we are ready to hit the ground running with a great portfolio of beer and cider brands,”​ he said.

CCA’s line up will include Molson Coors premium beers, Rekorderlig ciders and its own brands — Alehouse, a draught beer, and Pressman’s cider, an Australian craft cider.

Meanwhile, CCA said that its subsidiary SPC Ardmona would continue to expect a reduction in earnings in 2013. SPC Ardmona specialises in large fruit packing.

Peter Kelly, managing director at SPC Ardmona, said that while the business continues to be challenging, the company has secured commitment from its major customers to convert to 100% Australian-grown produce for multi-serve packaged fruit.

“The Anti-dumping Commission has found that Italian tomatoes have been dumped into the Australian market, damaging our business, and has imposed an immediate tariff penalty on these imports,”​ he revealed.

“We are currently seeking government support for co-investment with SPC Ardmona to ensure a stronger future for our business and fruit and vegetable growers in the region, and we continue to pursue safeguards and support through the Productivity Commission.”

Kiwi demand growing

According to Davis, positive momentum in demand has continued in New Zealand over the past year. “Since July, overall market conditions in New Zealand have continued to improve and our business has delivered improved volumes, earnings and market share gains.”

Davis added that third-quarter demand slowed in Indonesia as the economy adjusted to higher levels of inflation, which impacted consumer spending.

“The fundamental drivers of increased consumption per capita of commercial beverages remain strong and for 2013 we would expect the Indonesian business to deliver low double-digit volume and earnings growth,”​ he said.

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