China Mengniu Dairy to buy Lion Dairy & Drinks

By Rachel Arthur

- Last updated on GMT

Lion Dairy & Drinks crushes around 75,000 tonnes of fruit a year for its juice brands. Pic: getty/morganvaleks
Lion Dairy & Drinks crushes around 75,000 tonnes of fruit a year for its juice brands. Pic: getty/morganvaleks

Related tags Australia

China Mengniu Dairy Company will buy Kirin’s Lion Dairy & Drinks business in Australia: covering Lion’s milk-based beverages, juice, water ice brands and yogurt brands.

The AUD $600m ($407m USD) deal includes brands such as Dairy Farmers, Pura, Dare, Farmers Union, Yoplait, Daily Juice, The Juice Brothers and Berri.

Kirin announced its intention to sell the Lion Dairy & Drinks business last year: and has already sold the Specialty Cheese unit to Canada’s Saputo for AUD $280m on a standalone basis.

The deal with China Mengniu Dairy does not include Lion’s alcoholic beverage business in Australia. Kirin will also retain craft unit Lion Little World Beverages: which recently acquired US craft brewer New Belgium Brewing.

Driving dairy at home and abroad 

Kirin subsidiary Lion is one of Australasia’s largest food and beverage companies. Lion Dairy & Drinks is one of four divisions: alongside XXXX maker Lion Beer Australia, Lion Beer, Spirits and Wine New Zealand, and Lion Global Markets.  

Lion Dairy and Drinks produces, markets and distributes products across Australia in the milk, dairy, beverages, cheese, yogurt, juice and soy categories. The Dairy & Drinks business employs around 2,300 people across Australia, as well as some employees in Singapore, Malaysia and China.

Each year the business purchases around one billion litres of milk from more than 550 Australian dairy farmers, and crushes around 75,000 tonnes of fruit from orchards across the country.

Stuart Irvine, CEO, Lion, said: “After reaching an agreement to sell the Specialty Cheese business to Saputo on a standalone basis, we took some time to carefully assess all options for the balance of the Dairy & Drinks business that would best deliver on our objectives.

“We believe that Mengniu Dairy, a specialty dairy player, is an ideal owner to take Dairy & Drinks forward, given its track record of investing in the Australian dairy industry, together with its global reach and deep capabilities. 

“Bringing the businesses together will help drive Mengniu Dairy’s growth in the Australian domestic market, while also accelerating Dairy & Drinks’ aspirations in South East Asia and China.  In addition, Dairy & Drinks will benefit from access to leading-edge dairy research and development capability and further investment as part of the Mengniu business.”

China Mengniu Dairy notes that Lion Dairy & Drinks has a ‘portfolio of iconic dairy brands with No 1 market position’ across the dairy and juice categories.

“Its access to the significant volume of highly regarded Australian milk pool, its large scale of 13 manufacturing facilities across Australia and the extensive cold chain distribution network that service 35,000 customers, all make the Target Group [Lion Dairy & Drinks] a strong comprehensive vertically integrated dairy player in Australia.”

In addition, it believes these Australian products will be well received by South East Asian and Chinese consumers. “These iconic household brands will allow the Group to continue developing market-tailored, premium product offerings to customers in both existing and new markets and as such, realize tremendous market potentials in these regions.”

The sale is subject to ACCC and Foreign Investment Review Board approvals and other standard closing conditions.

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