South Australia's family-owned brewery, Coopers, said it experienced ongoing growth during the 2013-14 financial year with record sales and turnover figures.
Its profits, however, dropped by 9.1%.
Coopers is now the largest Australian-owned brewer, following the foreign takeovers of Lion and Foster’s. A full-year net profit drop is significant. Coopers' dropped to $28 million for fiscal 2014 from $30.8 million in 2013.
But why is also significant. Coopers stated that costs associated with a second bottling line and beer sales shifting from kegs to less profitable packaged beer formats squeezed its earnings.
The profit slump is unusual for the brewer that has managed to build year-on-year profit growth despite the downturn in the Australian beer market as drinkers turn to other beverages such as cider or wine.
Total bulk or kegged beer sales fell 1.5% during the year, while packaged beer sales were up 10.3%, Coopers managing director, Dr Tim Cooper, acknowledged.
“Total beer sales in 2013-14 grew 8.1% to 75.3 million litres, continuing the steady growth Coopers has enjoyed since 1994. Turnover for the year reached a record $231 million, 6.9% better than the $216 million in 2012-13.”
Cooper noted that a substantial factor in the profit decline has been the twice yearly indexation of beer excise, which put downward pressure on sales.
“It is now reaching the stage that the excise rises are counter-productive with the additional tax raised being offset by a drop in overall sales.”
Coopers' sales in its home market, South Australia, fell 0.8% during the year, but it remained Coopers’ largest market, accounting for 26.8% of its total beer sales.
Sales in NSW grew 8.2% and now account for 26% of Coopers’ volume. Victorian sales were up 15.3% for the year, Queensland sales rose 14.4% and Western Australia's sales grew by 12%.
Overall, Coopers now represents just under 5% of the total Australian beer volume. Total Australian sales for 2013-14 fell about 1%. This is the fifth year in a row in which total volume has fallen.
Exports, which account for 2.4% of Coopers' total sales, were up 16.6%.
Sales on the international beers Coopers distributes - Sapporo, Carlsberg, Kronenbourg 1664, Kronenbourg Blanc and Mythos - rose 44% in volume and now represent 9.8% of Coopers' total beer volume.
Dr Cooper said Coopers planned to spend more than $4.5 million in the next few months to streamline truck movements around the brewery and install four more fermenters to cope with ongoing growth. The new fermenters will be installed in early 2015, taking the total number at the brewery to 28.
Installing the new fermenters required changes to internal roads within the brewery and this work has already commenced. The works will also streamline truck movements within the brewery and enable up to 60 semi-trailers to be loaded each day.
