Australia

Linfox buys out Lion from BevChain distribution joint-venture

Linfox buys out Lion from BevChain distribution joint-venture

Australian logistics major Linfox has bought out Lion’s 50% stake in BevChain for an undisclosed sum and will take full control of the drinks distribution and warehousing group.

Kirin-owned Lion set up BevChain in 2006 as a joint-venture with Linfox mainly to distribute its beers, wines and ciders across Australia.

But pressure on sales volumes for Lion’s beer brands, which include XXXX Gold, Tooheys, West End and James Boag, has prompted it to find economies, even though the joint-venture has been profitable.

In the 2017 financial year, BevChain reported revenues of A$250m (US$200m), having doubled in size since 2011.

Lion said that leaving the joint venture would allow it to "focus on its core beer business". Its former joint-venture partner will continue to provide warehousing and distribution services for Lion's Australian beer business. 

Linfox believes that full ownership will help it attract new customers that currently compete with Lion. These, according to chief executive Annette Carey, may have previously worried about a potential conflict of interest when BevChain was jointly owned.

The logistics firm sees growth in the distribution of water, low-sugar carbonated soft drinks, energy drinks, craft beer, mid-strength beer, premium beer and spirits.

The acquisition is aligned to Linfox’s growth strategy and we will continue to invest in sectors where we see an opportunity for growth,” Carey added.

BevChain, which has a fleet of more than 200 vehicles and employs about 700 staff, has 25 distribution centres across Australia.

It has more than 20 customers, including boutique beer brands such as Stone & Wood, 4 Pines and Vale Brewing; alcoholic spirits such as Campari and Bacardi; winemakers like Brown Brothers and McWilliam's; and retailers such as Coles and Woolworths.

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