According to The Australian Financial Review, Japanese brewer Kirin appears to be finally losing patience with its $2 billion Australian dairy business, Lion Dairy & Drinks.
Lion, which is 100 per cent owned by Kirin, has launched a strategic review of Dairy & Drinks and is considering options including selling the business entirely after completing a three-year restructuring process.
Lion Dairy & Drinks is Australia's second-largest milk processor after Murray Goulburn, with an estimated 19 per cent share of the milk processing market, and buys close to 1 billion litres of milk a year, according to IBISWorld.
However, sales and earnings have been in decline for years as the business struggled to recoup rising costs amid stiff competition from other processors and pricing pressure from Coles and Woolworths, including $1 a litre milk.
Kirin paid $2.8 billion for the then National Foods in 2007 and $910 million for NSW-based co-operative Dairy Farmers in 2008, but has struggled to achieve a satisfactory return on its investment.
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