Lion’s Dairy & Drink Brands Face Uncertain Future As Earnings Sour

Lion’s Dairy & Drink Brands Face Uncertain Future As Earnings Sour

The dairy and drinks arm of food and beverage giant Lion has been placed under strategic review, with parent company Kirin hinting at a possible sellout of the brand if sales fail to increase.

Several well-known Aussie brands sit under Lion Dairy & Drinks, including Dairy Farmers, Pura Milk, King Island Cheese and Dare flavoured milk.

The strategic review follows a three-year-long restructuring process within the Dairy & Drinks arm and could result in a sale of the business.

The sale of Lion Dairy & Drinks’ would be a massive blow to the brand’s media agency of record, Starcom.

Lion Dairy & Drinks is one of Starcom’s biggest clients, having won 100 per cent of the media buying for the brand in 2014.

When contacted by B&T, Starcom declined to make a comment on the future of its relationship with Lion Dairy & Drinks.

The restructuring is due to declining sales of Lion Dairy & Drinks-owned products, which may be thanks to the recent milk crisis in Australia as Woolworths and Coles continue to sell litre milk for $1 placing more pressure on other dairy farmers.

In a statement provided to B&T, Lion CEO Stuart Irvine said: “In order to reach its full potential and deliver its nutrition-focussed growth strategy, Lion Dairy & Drinks (LDD) requires new capabilities and investment.

“It’s therefore appropriate before we commence another three-year plan to consider the best pathway forward for LDD.”

According to Lion, the strategic review “is expected to take no longer than four weeks. All options will be canvassed, including retaining and investing in the business and a sale.”

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