Woolworths buys China liquor business Summergate
The managing director of Woolworths Liquor Group, Brad Banducci, says Summergate, the large alcoholic drinks distributor in China which has just been acquired by the company, was able to increase sales in the past three months despite a tough market.
The acquisition is one of the first by Woolworths overseas as it lifts its focus from its domestic operations, where it is battling slowing sales in its core supermarkets business and heavy losses in its Masters hardware operations. Mr Banducci declined to comment on the price.
Woolworths runs the 189-store Dan Murphy's liquor chain and the BWS chain, with 1230 outlets, in Australia as part of a liquor division which generates sales of $7.4 billion annually.
Mr Banducci said austerity measures imposed by Chinese authorities had crimped sales across the market in China but Summergate had been able to "hold the line", and in the past three months had been able to increase sales.
He said Summergate generates annual sales of around US$40 million. "Its managed to actually hold the line, and in the last three months has managed to grow." Summergate is one of China's top drinks distributors and represents a portfolio of around 80 global brands, including Concha y Toro and Chateau Masur. It also includes a small fine wine retail business, Pudao, with two stores in Shanghai and Beijing, along with a small online and direct retail operation. Founders to stay Summergate has 13 offices and 11 distribution centres and employs more than 400 people. It was established in Shanghai in 1999 by two businessmen, Ian Ford and Brendan O'Toole. They will remain with the business for at least three years.
He said negotiations had been going on for up to a year, and the signing of the Free Trade Agreement between China and Australia was an added bonus over the past few weeks as negotiations were finalised. "The FTA has made it all the more interesting," he said. It would "absolutely" enhance the deal. Mr Banducci said it was a low-risk way for Woolworths to start building a bigger business in China, but it was a strategically important acquisition.
"It is strategically important. It is an opportunity for us to build a long-term business in a market which has huge opportunity and is close to us," he said. Mr Banducci said Woolworths intended to launch the Langton's fine wine business which it owns in Australia, into the Chinese market as part of the strategic plans for expansion.
Woolworths's liquor division has been one of the grocery chain's top performers as it's being outpointed by rival Coles in supermarket sales. Woolworths's Masters home-building centre chain is also incurring heavy losses, with a break-even point having been pushed out further and investors are troubled by the amount of capital it is soaking up, and the impact on overall returns at Woolworths. 'Conservative' approach Woolworths chief executive Grant O'Brien said on Wednesday the company would always be very conservative on international acquisitions. "We have a conservative investment lens, particularly in relation to international acquisition opportunities," Mr O'Brien said.
Mr Banducci said the wider Woolworths Liquor Group was trading solidly in the lead-up to the crucial Christmas period.
"We're optimistic for Christmas," he said. Woolworths runs the Dan Murphy's superstore chain, BWS chain and owns 75 per cent of the ALH pubs joint venture. Mr Banducci said he had known the two principals of Summergate for almost two decades. "I've actually known the founders of the business for a long time," he said. He said Summergate's main business was in the wholesaling of liquor.
Summergate general manager and founder Ian Ford said that he and his co-founder Brendan "are both very proud that a company of the calibre of Woolworths Liquor Group has chosen to acquire our great business. "I personally look forward to the years aheadcontinuing to lead and guide our fantastic group of people, striving to be the preferred partner to all stakeholders in the industry," Mr Ford said in a statement.
Michael Boddington from Asian Agribusiness Consulting (AAC) has been involved in agribusiness in Asia since 2000. AAC has office both in Vietnam Ho Chi Minh City and China Beijing. So AAC has a thorough understanding of the Viet Nam and China agribusiness industry and produces up-to-date research reports on the market. We can offer insights on supply and demand trends and comments on the future structure of Asian agribusiness. If you would like to know more please email: This email address is being protected from spambots. You need JavaScript enabled to view it.This email address is being protected from spambots. You need JavaScript enabled to view it.This email address is being protected from spambots. You need JavaScript enabled to view it.
Source: http://www.smh.com.au/business/retail/woolworths-buys-china-liquor-business-summergate-20141203-11ywsk.html#ixzz3Kp5T69HE
Jack Ma-Founded Fund to Invest in Unit of Milk Producer
HONG KONG—A private-equity fund co-founded by Alibaba Group Holding Executive Chairman Jack Ma will invest in a unit of a milk producer listed in Shanghai.
Mr. Ma's Yunfeng Capital Management Co. and China-based Citic Private Equity Funds Management Co. will invest in the unlisted unit of Inner Mongolia Yili Industrial Group Co. by buying new shares valued at at least two billion yuan (US$320 million), Yili said
Michael Boddington from Asian Agribusiness Consulting (AAC) has been involved in agribusiness in Asia since 2000. AAC has office both in Vietnam Ho Chi Minh City and China Beijing. So AAC has a thorough understanding of the Viet Nam and China aqua industry and produces up-to-date research reports on the market. We can offer insights on supply and demand trends and comments on the future structure of Asian agribusiness. If you would like to know more please email This email address is being protected from spambots. You need JavaScript enabled to view it.This email address is being protected from spambots. You need JavaScript enabled to view it.
Japan Starts Worrying About El Ni?o
Japan has joined the list of Asian countries worried about agricultural production as a possible El Ni?o weather cycle inches closer.
Its agricultural ministry said Wednesday the country needs to be proactive in preparing for “negative effects on crops” caused by a return of El Ni?o. Typically Japan experiences cooler and wetter conditions during an El Ni?o while Southeast Asia is drier and hotter. The last El Ni?o was in 2009.
The ministry said crops in Japan that may be affected include rice, vegetables, and feed grasses for cattle.
If it happens, this could lead to Japan having to import more rice, which goes very much against the grain. Rice is one of Japan’s most protected sectors, with it sporting an import tariff of 280% and the government also pays high subsidies to Japanese rice farmers. As a result, only 7% to 9% of the rice eaten in Japan is imported.
The last time very cold weather caused large-scale Japanese rice imports was in 1993, sending ripples through the regional rice market.
Japanese households are already feeling the pinch from higher vegetable prices due to unusually hot weather last summer and a bitterly-cold winter and heavy snow which damaged greenhouses. Though Japan is more open to imports of vegetables than it is rice, about half of Japan’s vegetables are produced at home.
Bakeries and households in Japan will also be paying more for butter this year, due to a shortfall in milk production in Hokkaido which has created a shortage of butter and skim milk powder. As a result, Japan will import its largest-ever emergency shipment of butter.
The Japan Meteorological Agency, like the weather bureaus of India and Australia, is forecasting a return of El Ni?o this summer and while Japan didn’t provide a probability in its June update, Australia’s Bureau of Meteorology predicts a 70% chance of its arrival by August.
The good news is that the climate disruption this time is not expected to be as severe as some previous El Ni?o years, and grain and rice stocks are comfortable in Asia.
Even so, some governments are already taking action.
The Philippines Department of Agriculture has started cloud-seeding operations in some parts of the country, while the Indian government is stocking up on seeds of fast-growing crops and is deepening reservoirs to hold more water.
Michael Boddington from Asian Agribusiness Consulting (AAC) has been involved in agribusiness in Asia since 2000. AAC has office both in Vietnam Ho Chi Minh City and China Beijing. So AAC has a thorough understanding of the Viet Nam and China aqua industry and produces up-to-date research reports on the market. We can offer insights on supply and demand trends and comments on the future structure of Asian agribusiness. If you would like to know more please email This email address is being protected from spambots. You need JavaScript enabled to view it.This email address is being protected from spambots. You need JavaScript enabled to view it.This email address is being protected from spambots. You need JavaScript enabled to view it.
Source from: http://blogs.wsj.com/moneybeat/2014/06/11/japan-starts-worrying-about-el-nino/
China Live pig price soared in May
Live pig price was CNY13.4/kg, a 24.6% increase from the previous month. Pig price had nearly a threefold increase in the first three weeks, and then showed a downtrend in the last week in May.
Experts believe there are five factors to promote the live pig prices.
- 1n Sow inventory declined continuously. According to data from MOA, sow inventory was 46.72 million heads which is lower than the normal quantity.
- 1nMay Day Holiday stimulate a big demand of pork.
- 1nLive pig farmers started to hold back suppliers in May Day holiday, so slaughterhouse have no choice but to passively increase price.
- 1nIn south region, government enforces a trial of selling iced fresh chicken. Customers started to switch their purchase willing to pork rather than chicken.
- 1n There are rumors that the government interference live pig market via require the slaughterhouse to increase price.
But experts believe that the live pig price will keep increasing only in a short term, because soar of the live pig price is attributable to the temporary effects of government policy and holiday demand. Oversupply in live pig market will inhibit the rising live pig price.
Source: http://www.feedtrade.com.cn/livestock/pigforecast/2014-06-04/2073473.html