Kirin Holdings reported today that it expects to incur an impairment loss of nearly JPY20 billion (USD178 million) related to the sale of its Australian specialty cheese business on a stand-alone basis to Canadian dairy giant Saputo. The proposed transaction was anounced today and is part of the intended sale of the whole Australian unit Lion Dairy and Drinks. However, Kirin still has to find a buyer for the rest of its business which is for sale since last fall in an effort to trim unprofitable operations.Kirin acquired Lion’s dairy and beverage business, National Foods, from San Miguel Corporation, Manila, the Philippines, for about JPY294 billion (USD1 billion at that time) in 2007 as it sought growth away from stagnating beer sales.
The intended sale Lion Dairy and Drinks will not include the beer and wine business of LionBeer Australia, the largest brewer in Australia with four large and four small breweries across the country, and Lion New Zealand, the country’s largest alcohol beverage company with a focus on the production, marketing, sales and distribution of beer, wine, spirits, cider and ready-to-drink products, as well as a range of non-alcohol beverages.
In Australia Lion operates the iconic XXXX Brewery in Queensland and Boag’s Brewery in Tasmania and craft breweries such as Malt Shovel Brewery in Sydney and Little Creatures in Fremantle and Geelong. In addition, Lion has bought within the last year several craft brewers and a craft distiller in the U.K., New Zealand and Australia (inside.beer, 10.4.2019).
Along with the impairment loss, Kirin has also revised downward its consolidated forecast for the fiscal year ending December 31, 2019 to JPY81.9 billion (USD730m), compared with a previous JPY139.0 billion (US1.25bn) forecast.
“The accounting for an impairment loss will not impact on Lion’s Beer, Spirit and Wine business in Australia and New Zealand, or its Global Markets business unit,” Kirin said in today’s press statement.