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Panhead a 'runaway train': Lion

NZ Newswire logoNZ Newswire 13/02/2017 Jonathan Underhill

Drinks giant Lion says its newly acquired Panhead brand is a "runaway train" and the company can't keep pace with demand.

The local unit of Japanese brewer Kirin Holdings acquired Upper Hutt's Panhead Custom Ales from the family of founder Mike Neilson last year.

It was its second such purchase of a popular craft brewer after buying Dunedin-based Emerson's in 2012.

Managing director Rory Glass cites sales growth for its craft beers and the trend of consumers seeking out better and more expensive beers, for the company's 12 per cent gain in profit in 2016.

Net profit rose to $38.7 million in the 12 months ended September 30, from $34.7m a year earlier. Sales rose 5 per cent to $561m. Total volume sold rose just 1 per cent in the latest year.

"The amazing thing about Panhead is that we can sell every drop of beer they make. It's a runaway train, and so far we just haven't been able to keep up with demand," Mr Glass said in a statement.

Panhead lifted production by 80 per cent last year. Emerson's volume rose 49 per cent while Lion's Mac's range had 30 per cent volume growth last year, Lion said.

Big brewers have been competing to buy smaller boutique operators in a market where craft beer sales are on the rise, even as overall liquor consumption is down.

Heineken-owned DB Breweries last month announced the acquisition of Kapiti-based Tuatara.

"Our consumers are keen to experiment with new flavours and to trade up to more premium option across our portfolio, and this trend is reflected in our revenue results," Mr Glass said.

In November, the NZX-listed brewer Moa narrowed its first-half loss to $1.2 million and said it was on the look-out for acquisitions, having signed distribution agreements with Wellington's Parrotdog.

Another Wellington craft brewing mainstay, Garage Project, is outsourcing to ramp up production, announcing last month a deal with bStudio in Hawke's Bay, which will brew its beer at a new facility in Napier.

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