Coca-Cola Amatil building beer portfolio

08 May, 2013 by

By James Atkinson

Coca Cola Amatil (CCA) has made "material progress" in developing opportunities in beer and cider ahead of its re-entry into the Australian beer market in December, according to boss Terry Davis.

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In a trading update released to the ASX, the CCA managing director yesterday said he had no doubt the company will have a strong portfolio of international beer brands to kick off with in 2014.

"We are well advanced in our discussions with a number of international brewers and would expect to make further announcements at the half-year results on our beer business," Davis said.

He said CCA's first four months of 2013 trading had otherwise delivered mixed results, with the Indonesian business continuing to be the standout performer.

"In Australian beverages, the grocery channel has experienced a very difficult start to the year due to the continuation of higher levels of competitor discounting and the impact to volume from lower retailer inventory levels," Davis said.

CCA said the outlook for the first half was for a decline in EBIT of 8 to 9 per cent, before significant items, with an expected return to earnings growth in the higher volume second half.

"Alcoholic beverages remain the most logical extension of our brand portfolio as we can do it for little additional cost by leveraging our large-scale sales, manufacturing and distribution infrastructure with our existing customer base," Davis told investors at CCA's AGM yesterday.

"Australia represents one of only six markets globally with a beer profit pool worth over $1 billion, so the earnings growth available to CCA for executing successfully is substantial."