Gregg's on the block

Wednesday 19 April 2017 05:36 PM

Gregg's on the block as Suntory prepares to sell ANZ Cerebos assets

By Pattrick Smellie

April 19 (BusinessDesk) - Ownership of two of New Zealand's oldest food brands, Gregg's and Raro, is up for grabs as the Japanese owner of the Cerebos businesses in New Zealand and Australia puts them up for sale.

Suntory Beverage & Food, a Japan-headquartered global soft drinks company, announced today it would prepare for sale its Australasian food and instant coffee businesses, along with its Singapore-based Asian Home Gourmet food business, in a process expected to take six-to-nine months, according to a statement from Terry Svenson, chief executive of the Australasian business.

The New Zealand subsidiary, Cerebos-Greggs, turned over $155 million in the year to Dec. 31, 2015, the latest period for which financial statements have been filed with the Companies Office.

It declared a tax-paid profit for that year of $17.5 million and spent $22.8 million on wages in New Zealand, down from $26.7 million a year earlier. The company contracted out its Auckland warehouse operation in 2015.

However, Suntory will retain ownership of its fresh coffee business, which in New Zealand is represented by a range of brands including Caffe L'affare, Atomic Roasters, Orb, and Robert Harris.

"The Fresh Coffee business ... will form part of a new business unit focused on capturing a larger share of the rapidly growing global fresh coffee market," said Svenson, who will lead the new business unit as chief executive.

A range of sauces, spices, curry powders, desserts and jellies are manufactured under the Gregg's brand, along with its staple instant coffee, which has been roasted in Dunedin for more than 150 years. The Raro, Bisto and F. Whitlock & Sons brands are also part of the New Zealand food business.

The 2015 balance sheet recorded non-current assets of $56.2 million and total current assets of $67.9 million.

Suntory's "core focus was on the beverage category," said Svenson. "Cerebos’ fresh coffee brands are a strong complement to SBF’s existing beverage portfolio globally. SBF remains committed to investing in fresh coffee to capitalise on our market leading positions to grow the business further."

Cerebos operates one food manufacturing facility in Sydney and the instant coffee operation in New Zealand.

“In the meantime, it’s business as usual for our people, our customers and our consumers with no change to our day-to-day operations," said Svenson.

UBS AG has been appointed as financial adviser to the sale process.

(BusinessDesk)

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