Economic sustainability
Our economic contribution
As the largest food and beverages company in Australasia, Lion Nathan National Foods has a significant impact on both the local and national economies in which we operate. We measure our contribution both in terms of our direct and indirect economic contribution and the value we add as a result of our operations.
The total (direct plus indirect) economic contribution made to the Australian and New Zealand economies is estimated at over $5.5 billion.
For the 12 months ended 30 September 2010 this contribution totalled $2,328 million1 in value added. The value we add is distributed to all our stakeholders: our people, industry, governments and the communities in which we operate.
The pie chart summarises the value created by Lion Nathan and how it was shared between the stakeholders who contributed to its creation. We have not included National Foods' contribution since financial information available at the time of writing would only reflect nine months of operations. Where we have included information on National Foods, this has been extrapolated for 12 months.
- Value added to the Australian and New Zealand economies is calculated as net sales revenue less operating costs and community investments, with depreciation and amortisation added back.
Lion Nathan economic value distribution in Australia and New Zealand*
| For the year ended | 2010 |
|---|---|
| Net Sales Revenue | $2,309 million |
| Direct economic value generated | $2,309 million |
| Distributed as follows: | |
| Operating costs | $1,652 million |
| Employee wages and benefits | $288 million |
| Payments to providers of capital | $312 million |
| Payments to government: tax, excise & levies | $1.3 billion |
| Community investments | $3 million |
* Since this is the first year of operations for LNNF, this data is based on financial data modelling and does not reflect the externally reported position of LNNF for FY10.
| We commissioned the independent economics consultancy Access Economics to model the economic impacts of our activities in Australia and New Zealand. In FY09 we used FY08 data because this was the most complete data set available to us at the time of publication. However, for this report we have used FY10 data since this was complete at the time of writing. All dollar amounts are in Australian dollars (unless stated otherwise), based on an average A$/NZ$ exchange rate of 1.256 and on operating numbers adjusted for the impact of one-time and significant items where appropriate. |
Our business has flow-on effects to the wider economy and is an important driver of the Australian and New Zealand agricultural, tourism and hospitality sectors.
It's estimated that a $1 million increase in demand for our products results in a $2.4 million and a $2 million increase in outputs across the Australian and New Zealand economies respectively. And every job we create leads to an overall increase in employment of 4.4 jobs in Australia and 4.4 jobs in New Zealand.
Then there is our significant investment in creative industries, through our marketing communications and sponsorship of artistic events, and in sport. The latter helps keep Australasian sport globally competitive by encouraging local talent to stay here rather than pursue careers overseas.
Overall, we're committed to playing our part in making Australia and New Zealand as internationally competitive as possible.
As well as contributing financially to these national economies, our business makes a significant contribution to the competitiveness of our home nations by providing training and development for our people and by supporting local suppliers. Importantly, our core purpose – bringing more sociability and wellbeing to our world – sees us taking an active role in helping deal with issues related to alcohol misuse, reducing our environmental footprint and building local communities.
Payments to and from government
In Australia, Lion Nathan pays excise on the alcoholic content of beer and spirits and Wine Equalisation Tax (WET) on the value of wine sold. In the year under review we made payments of $1.3 billion in excise, GST, WET, Alcohol Advisory Council of New Zealand (ALAC) levy and customs duty.
We also received around $3.9 million from Australian governments. As a wine producer, the company receives the WET producer rebate of $500,000 a year from the federal government. In addition we received $4.8 million from the Tasmanian Freight Equalisation Scheme (TFES), $3.4 million of which was in cash and $1.4 million has been accrued as cash rebate, but not yet received. The TFES compensates Tasmania-based manufacturers that service the mainland – such as J Boag & Son – for the costs incurred crossing the Bass Strait.
We received no financial assistance from the New Zealand government.
Business continuity
The merger of Lion Nathan and National Foods has created an opportunity to align the processes used for managing business continuity across the group. During 2011 business continuity management will focus on identifying key risks to the supply chain and implementing steps to minimise the impact of these on customers and consumers.
New Zealand's Christchurch earthquake on 4 September 2010 required our people to enact their contingency plans. The systems and processes they implemented allowed the Canterbury Brewery to be operational within seven days of the earthquake, minimising disruption to our customers and consumers.
Government taxes
Australia
Government taxes
New Zealand
