Something has to give over the deadlock between Lion Nathan and Allied Domecq: the question is what? The current situation, which sees Allied Domecq retaining ownership of 15% of Banksia Ltd, is clearly untenable for Lion Nathan, especially given that Banksia is set to report an after tax loss of $2.4 million for the first half of this year. In the corresponding period last year it recorded a profit of $332,000. The loss, which includes inventory write-downs of $1.5 million, may not be as dramatic as this, since the small 2002 vintage should drive up the price of bulk wines beyond the depressed levels at which this estimate was initially made. Banksia’s sales for the first half of the year have fallen from 161,000 to 138,000 cases, mainly due to a slowing down of the UK and US markets for its brands. Banksia is however predicting second half sales in excess of 200,000 cases against 168,000 last year, with a profit after tax for this period in the range of $1 to $1.2 million.
