By James Atkinson
Lion has blamed the general decline of Australia's beer market for a write-down of $213.2 million in its Australian liquor business.
The company yesterday revised the value of goodwill and brands on its balance sheet to reflect difficult trading conditions experienced during the 2011 financial year.
"Persistent poor global economic conditions have seen a sustained period of low consumer confidence and increased saving activity in Australia," the company said.
"This challenging environment has been further exacerbated by short-term factors such as poor weather and natural disasters in Lion's key markets."
As well as the liquor downgrade, Lion recognised an impairment charge of $1 billion in its dairy and drinks business, which it attributed to high input costs and a challenging pricing environment in white milk.
"Continued discounting activity has caused a transfer of sales volumes from higher margin branded products into private label and from the non-grocery channel to grocery," it said.
But Lion said the reduction in goodwill caused by the write-downs would not impact Lion goodwill at the Kirin group level, "because Kirin treats Lion as a single entity, and due to the prior year's amortisation".