21 May 2009

Wine future uncertain at Lion Nathan

7:03 am on 21 May 2009

Lion Nathan is unsure what the future of its wine business will be if the company is taken over, but does not believe it's the right time to sell.

The Australasian brewer's profits increased by 7% to $A176 million in the six months to March, mainly due to increased sales of its core beers, like Four X Gold in Australia, as well as its premium brands.

But earnings from its wine business were more than halved due to excess supply and heavy discounting.

Chief executive Rob Murray says it's difficult to tell when conditions will improve.

Kirin Holdings is offering $A12.2 per share for the 56% of the company that it does not already own. Lion's board has recommended shareholders accept the offer.

The offer still requires shareholder approval but is expected to be completed by October.

Meanwhile, Lion Nathan says beer price rises to date have only partially alleviated the impact of rising raw material costs, and further price increases are likely.

The company has confirmed it expects to make a full year profit of between $A305 - $A315 million.