Lion Brewery not sober on portfolio expansion
The Lion Brewery says its recent appointment as exclusive distributor (duty paid sector) in Sri Lanka for Diageo PLC – the world’s largest premium spirits company-, has added value to its portfolio.
“The brands of Diageo include Smirnoff vodka, Johnnie Walker Scotch whisky, Bailey’s liqueur and Guinness stout. Diageo sells its brands in over 180 countries across the world. This has made our portfolio much nicer and fuller,” Suresh Shah, CEO Lion Brewery Ceylon PLC told the Business Times.
Whilst Lion Brewery will be responsible for the supply chain of these brands in Sri Lanka, all marketing activities will be carried out via a newly formed subsidiary, Luxury Brands (Private) Limited.
Mr. Shah said that a month before the budget the beer prices increased and the taxes on spirits increased after the budget. “We will pass this on to the customers and the net impact will be shrinking margins,” he said, noting that the efforts will be to cut costs in other areas.
On a turnover of Rs 10.5 billion, Lion Brewery Ceylon PLC’s Group’s Ceylon Beverage Holdings PLC recorded a pre-tax profit of Rs 960 million and a post-tax profit of Rs 619 million for the first six months of the current financial year.
The Group’s contribution to government coffers during the first six months of the year amounted to Rs 6.4 billion, an increase of Rs 2.1 billion or 50 per cent in comparison to the previous period. The combined increases ranged between 15 per cent – 18 per cent.
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