Coopers lifts beer sales but dividend goes flat

The largest Australian-owned brewer, South Australia’s Coopers Brewery, has posted a 3.9 per cent lift in beer sales for the year.

Coopers’ Brewery CEO Dr Time Cooper. Picture: Supplied.

Tim Cooper, boss of the nation’s largest Australian-owned brewer Coopers, fears keg volumes through pubs, clubs and bars might remain depressed well into 2021 as the beer industry faces customer-base shutdowns or severe restrictions to its operations.

Dr Cooper told The Australian that recent industry data he had seen revealed that keg volumes were still down 30 per cent nationally compared with the same time last year with Victoria down 94 per cent as that state slowly emerged from stage 4 restrictions.

“It means that hospitality is still pretty hard hit. In South Australia (where Coopers is based) the beer industry is down about 14 per cent in terms of volume but in some other states, like Victoria, it is down 94 per cent and that’s hardly surprising with nothing being open,’’ he said.

“When it returns to normal is a good question. We would hope, as state borders open up, before Christmas — I guess would depend on how many of the outlets, currently shut or restricted, would be able to open and operate normally.

“But I have a feeling we are still going to see depression of keg volume until next financial year, and not until financial year 2022 getting back to 2019 levels.”

It comes as Coopers posted a 3.9 per cent lift in beer sales for the year at a time when the broader beer market was flat.

There was also strong demand for Coopers’ home-brew kits driven by drinkers stuck at home turning to brewing up their own beer.

But the owners of Coopers, a close-knit collection of about 150 individuals mostly descended from the 158-year-old company’s founder Thomas Cooper, will wear some of the pain of struggling overall profitability with their dividends cut for the first time since 1994.

Coopers, which has a market share of about 5 per cent, said bolstering the uplift in sales for fiscal 2020 was Coopers’ strong portfolio of canned beers with consumers favouring the old-fashioned way of imbibing.

Coopers reported profit before tax for fiscal 2020 of $34.3m, which was in line with the profit posted in 2018, but a strong recovery from the $23.1m recorded in the 2019 financial year.

The brewer is facing the same struggles as other Australian brewers, including the protracted shutdown and slow opening up of bars, clubs and other licensed venues at a time when beer consumption before the COVID-19 pandemic emerged at lows not seen since World War II.

“In a time of such uncertainty, Australian beer drinkers appear to be choosing brands they feel they can trust,” Dr Cooper said.

“The pandemic has had a significant impact on Australia’s hospitality industry and our keg sales, in particular, suffered as a result. To have emerged in an overall strong position is testament to the loyalty of beer drinkers, the sheer resilience of hoteliers and publicans and the determination of our team at Coopers Brewery.

“We’re looking to the year ahead with cautious optimism.”

Coopers said total beer sales, excluding non-alcoholic beers, for the financial year rose to 79.8 million litres, up from the 76.8 million litres recorded for the previous year. Across the states, there was a small decline in the Northern Territory of 1.3 per cent, a rise of 13.6 per cent in Western Australia, 5.8 per cent growth in NSW, 4.4 per cent growth in Queensland, 2.7 per cent growth in Victoria and a 0.4 per cent gain in beer sales in South Australia.

However, sales of Coopers international partner brand beers fell 2.5 per cent during the financial year, and keg sales fell 24.4 per cent as social restrictions kept patrons away from pubs across the country.

“We introduced a number of initiatives to support hotels and venues over this challenging time, including offering refunds on full kegs returned to the company. In total, 13,000 kegs were collected from venues across Australia at a cost of over $3m,” Dr Cooper said.

Coopers also posted a strong increase in sales of DIY brew kits arising from higher demand during the COVID-19 lockdown. Although retail sales experienced a decline in the first half of the financial year, growth of 166 per cent in the past four months resulted in DIY beer concentrate sales rising by 6 per cent, from 2600 tonnes last year to 2757 ­tonnes. Malted barley production — sales of which now represent about 10 per cent of Coopers’ revenue — increased 30 per cent, from 44,300 tonnes to 57,900 ­tonnes, reflecting a growing demand across Asia for high-quality malt.

The brewer said fully franked dividends of $12 a share were paid in the 2020 financial year, down from $13 last year. The reduced dividend reflected the climate of uncertainty, the brewer said.