Read the following extract from an article entitled Coopers is ale and hearty for growth by Christopher

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Read the following extract from an article entitled ‘Coopers is ale and hearty for growth’ by Christopher Russell (The Advertiser , 1 June 2013, p. 67) and then answer the questions that follow.

COOPERS Brewery is looking for new licence deals and interstate sales to sustain the growth it has recorded over the past two decades.

Coopers managing director Tim Cooper said the company was about to conclude 20 years of continuous growth at an average 9.9 per cent a year. ‘It is going to be harder (as the base grows) but we reckon there’s still scope to keep growing our volumes,’ he said.

‘We may never reach 10 per cent of the national market, but we certainly think we can get to 7 per cent. It may take us another 10 years but we think we can get there.’ Coopers accounts for 4.3 per cent of the total national volume.

‘We’d like to expand the portfolio even though there are fewer opportunities because of consolidation in the industry globally,’ Dr Cooper said.

Coopers has the licence to brew for the Carlsberg group, based in Germany, and Japan’s Sapporo.

The state’s biggest beer maker, SA Brewing, is owned by Lion, which has partnerships with Anheuser-Busch Inbev and Heineken—the biggest and third biggest beer companies in the world. Australia’s other major player, Carlton and United Breweries, is owned by SABMiller, the world’s second biggest. Carlsberg, which includes the Kronenbourg label, is fourth globally.

Dr Cooper was speaking as the company this week published an updated edition of a book tracing the Coopers history. It shows Coopers’
production hit a low point of 11 million litres a year in 1992–93 after four years of decline.
Since then the brewer has chalked up an increase every year to be on target for about 70 million litres a year now. Profits, while not as linear, have grown from an after-tax loss of nearly $2 million in 1992–93 to a record $27.3 million for 2011–12.
‘We’re going along pretty well this year but we don’t know yet exactly where we’ll end up,’ Dr Cooper said. ‘Our volumes are up and our profitability has improved.’
‘We’ve had an increase in our Coopers beer volume but more than 50 per cent of the extra volume is coming from the new arrangement to brew for Carlsberg and Kronenbourg.’

(a) How would a brewery company account for the social costs created by alcohol abuse?

(b) Should a brewery company account for the social costs created by alcohol abuse?

(c) Would GDP be positively or negatively affected by costs that arise from alcohol abuse? (Such costs might include those that arise from alcoholrelated accidents and alcohol-related crime.)

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Financial Accounting Theory

ISBN: 9780071013147

4th Edition

Authors: Craig Deegan, H. Bierman

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