CANBERRA: The Australian arm of energy drinks company Red Bull has increased its annual profits for the first time in four years in a highly-competitive $1.2 billion energy drinks market, where rival Coca-Cola Amatil is stepping up the pressure now that it has the rights to Monster Energy drinks. Red Bull is the global leader in the energy drinks sector and the No.2 player in Australia, just behind the V brand operated by Frucor Beverages, with Coca-Cola Amatil in third position.
Red Bull Australia reversed a persistent downward profit trend locally, with a 58 per cent rise in net profit after tax to $11.4 million in calendar 2015, as sales revenues climbed by 9 per cent to $217 million. Directors are expecting sales to rise again in 2016 in Australia, saying “the company expects continued growth in sales in the coming year”. The vastly improved results prompted a dividend payout by the Australian arm to its Austrian parent of $11.5 million, compared with just a $1 million dividend declared last year.
The figures are contained in the latest accounts lodged by Red Bull Australia with the Australian Securities and Investments Commission for the 12 months ended December 31, 2015, which also show that pre-tax profits were up by 53 per cent to $16.7 million. It paid $5.3 million in tax in 2015, up from $3.7 million in 2014.
Red Bull, set up by an Austrian entrepreneur in the mid-1980s, has a large global marketing budget and one of its flagship sponsorships is the Red Bull Racing Formula One team which has Australian Daniel Ricciardo as one of its drivers. The Red Bull team was in the spotlight in late May because of a botched pit-stop at the Monaco Grand Prix which cost Ricciardo an almost certain victory.
Industry experts say the energy drinks market in Australia has been rising by between 6 to 7 per cent per annum, on average since 2010. The profit margins are higher than on carbonated soft drinks.
The Australian energy drinks market is in for a significant shake-up with Coca-Cola Amatil having secured a 20-year distribution contract for Monster Beverage’s portfolio of energy drinks in Australia and New Zealand from May 1. It is taking over the distribution of the Monster Energy brand from Schweppes, which is owned by Japanese brewer Asahi.
Coca-Cola Amatil’s main product in the energy drinks market in Australia has been the Mother brand, which has been innovating through different pack sizes and extensions of the brand through products such as Mother Big Shot.
The energy drinks category is now a staple in the aisles of major supermarket chains Woolworths and Coles, with Red Bull figuring prominently. A spokeswoman for Red Bull said the firm was a private company and didn’t want to comment about specifics in its Australian operations. The brand is sold in 169 countries and first appeared in the Australian market in 1999, 12 years after it was first sold in its home country of Austria. Red Bull Australia’s highest net profit of the past few years was in 2011 when it made $16.7 million, but it then tapered off to $14.3 million in 2012, $7.41 million in 2013 and $7.18 million in 2014 according to its financial statements.
