Lion keeps ready money

Lion Nathan gave its shareholders a Christmas present of sorts by deciding not to pay over the odds for New Zealand ready-to-drink maker Independent Liquor, raising the prospect that it will make capital changes instead.

Rumours of an escalating price war, with a price tag of over $1 billion for the company founded by the late Michael Erceg, were worrying investors, who felt that it would further delay the brewer’s attempts to improve its profitability.

Lion Nathan has enough problems on its plate – ranging from intense competition in the Australian premium beer as well as in the New Zealand beer market, over-production in the Australian wine industry and the headache over its ownership of Wither Hills -without it paying too much for Independent Liquor. It would have been risky integrating into its existing multi-stream business a specialist company that provides ready-mixed drinks, or RTDs, for the youth market.

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