Australia Food and Drink Report Q1 2009

Publication Date	February 2009
Publisher	Business Monitor
Product Type	Report
Pages	82
ISBN Number	not applicable
Product Code	BMI03358

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Summary

The food and drinks market in Australia continues to consolidate quickly, with a number of major deals struck in the past few months. In October, it was announced that Japanese food and beverage giant Suntory had agreed a EUR600mn (US$750.4mn) deal for Frucor, the Australia and New Zealand beverage business of French major Danone. In the same month, Heinz acquired Golden Circle, a fruit juice and canned food producer and a month before, Kelloggs acquired Australian natural cereals manufacturer Speciality Cereals.

In a signal that further consolidation in the food and drink sector is probably still inevitable, in November, Australian soft drinks major Coca-Cola Amatil (CCA) turned down an AUD7.6bn (US$4.92bn) merger offering from compatriot brewing giant Lion Nathan.

However, the outlook for Australia's economy has deteriorated in recent months. The slowdown is being led by a downturn in private consumption, with consumers feeling the pinch from record high inflation and interest rates. Household spending is traditionally a key pillar of Australia's economic growth, accounting for around 60% of the economy. BMI expects Australia's real GDP growth to register 2.9% in 2008 and 2.0% in 2009, representing a significant deceleration from 4.1% in 2007.

Indeed, rising commodity costs are still prompting a number of companies to close or scale down their Australian manufacturing operations. In December, Japanese tobacco giant Japan Tobacco called time on its Australian chilled meats venture Hans Group, putting the unit and its subsidiaries into voluntary administration under the care of KordaMetha. Widespread speculation continues on the possible demerger of the Australian beverage company Foster's beer and wine divisions with the conclusions of a strategic review on the wine business expected in early 2009.

Although Australia continues to offer opportunities based on high per capita disposable income and consumption, the country's major drawbacks include its small population (of around 20mn) and - more importantly - mature and competitive retail industry as well as the rising costs of production. In October, however, US wholesale giant Costco confirmed that economic stagnation in the Australian market would not derail its entry or expansion plans for the country. Costco intends to make its entry via a site in Melbourne in 2009, with a store in Sydney to follow soon after. On the other side of the coin, retail market leader Woolworths has now revealed that the company is evaluating international acquisition opportunities in order to maintain growth rates in future years and diversify away from its saturated home market.

Content

Executive Summary
Business Environment
Asia Pacific Food & Drink Business Environment Ratings
- Table: Regional Food & Drink Business Environment Ratings
Australia Food & Drink Business Environment Rating
SWOT Analysis
Food
Australia Food SWOT
Drink
Australia Drink SWOT
Mass Grocery Retail
Australia Mass Grocery Retail SWOT
Macroeconomic Outlook
- Table: Australia Economic Activity
Food
Industry Forecast Scenario
Food Consumption
- Table: Food consumption indicators - Historical Data & Forecasts
Confectionery
- Table: Australias Confectionery Sales
Canned Food
- Table: Australias Canned Food Sales
Trade
- Table: Australias Food & Drink Trade Balance (US$mn)
Industry Developments
Market Overview
Food Processing
Functional Foods
Confectionery
Canned Food
Trade
Global Top 10 Wheat Producers & Exporters (mn tonnes)
Agriculture
Organic Farming
Drink
Industry Forecast Scenario
Alcoholic Drinks
- Table: Australias Alcoholic Drinks Sector
Hot Drinks
- Table: Australias Hot Drinks Sector
Soft Drinks
- Table: Australias Soft Drinks Sector
Industry Developments
Market Overview
Alcoholic Drinks
- Table: Recorded Per-Capita Alcoholic Drink Consumption (Litres)
Beer
- Table: Australian Beer Market Market Share By Company
Wine
- Table: Australia Wine Exports By Country, Volume (mn litres) & Value (AUDmn), MAT At January 2008
Hot Drinks
Soft Drinks
Mass Grocery Retail
Industry Forecast Scenario
- Table: Australia MGR Sales by Format - Historical Data & Forecasts
- Table: Grocery Retail Sales By Format Historical Data & Forecasts
Industry Developments
Market Overview
Leading MGR Players
- Table: Structure Of Australias Mass Grocery Retail Market By Estimated Number Of Outlets
- Table: Structure Of Australias Mass Grocery Retail Sector Value By Format (US$bn)
- Table: Estimated Value Of Sales Per Outlet Type 2007
Competitive Landscape
Key Players
Food And Drink
- Table: Key Players in Australia's Food & Drink Sector
Mass Grocery Retail
- Table: Key Players in Australia's Mass Grocery Retail Sector
Company Analysis
Mass Grocery Retail
Aldi
Woolworths
Coles
FoodWorks
Food
National Foods
Dairy Farmers
Drink
Fosters Group
Lion Nathan
Coopers Brewery
Coca-Cola Amatil
- Appendix: Agricultural Commodity Prices
- Appendix
Food & Drink Business Environment Ratings
Ratings Methodology
Ratings Overview
Ratings System
Indicators
Limits Of Potential Returns
Risks To Realisation Of Potential Returns
Weighting
Weighting
Country Snapshot: Australia Demographic Data
Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2012
Section 2: Education And Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics
Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Wages, 2000-2012
BMI Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
BMI Food & Drink Forecasting & Sourcing
How We Generate Our Industry Forecasts
Sourcing