SABMiller (SAB) plans to re-enter the Brazilian market next year while also distributing its own beers in Canada‚ adding two new markets to the group’s Latin American unit.
Latin America is SABMiller’s most profitable region‚ though the group no longer has a direct presence in Brazil – the world’s third largest beer market. SABMiller last cut ties with Brazil in 2012‚ when a difficult exchange rate made importing beers inefficient.
The Brazilian market is dominated by SABMiller’s larger rival and the world’s biggest brewer‚ Anheuser-Busch InBev (AB InBev).
AB InBev is also the largest player in Canada‚ where SABMiller’s North American partner‚ Molson Coors‚ will halt the distribution of SABMiller beers from April next year.
SABMiller will try its hand in Brazil again through a joint venture with the country’s second biggest player‚ Grupo Petropolis. In contrast to SABMiller’s prior arrangements in the country‚ Petropolis had a strong route to market capabilities‚ SABMiller’s Latin America president‚ Karl Lippert‚ told investors. A good distribution network and in-country production were prerequisites to SABMiller rejoining the market‚ Lippert said. The companies will target the small but growing premium segment of the Brazilian market.
Petropolis will initially produce one of SABMiller’s premium beers‚ which SABMiller will market in the country and invest in building the brand. The joint venture had the potential to produce 1-2 million hectolitres annually in Brazil over the next 10 years, he said.
Meanwhile‚ SABMiller also plans to start exporting to Canada from the US‚ after Molson Coors’ distribution deal comes to an end in April. The Canadian market will fall under SABMiller’s Latin America region.
Lippert said SABMiller’s Latin American business was likely to experience difficult trading conditions in the near term‚ as depressed commodity prices weighed on the region’s economic growth.
The International Monetary Fund last month trimmed its growth forecast for Latin America and the Caribbean to 1.3% this year and 2.2% next year.
Beer baron set to to samba again
Latin America is SABMiller’s most profitable region‚ though the group no longer has a direct presence in Brazil – the world’s third largest beer market. SABMiller last cut ties with Brazil in 2012‚ when a difficult exchange rate made importing beers inefficient.
The Brazilian market is dominated by SABMiller’s larger rival and the world’s biggest brewer‚ Anheuser-Busch InBev (AB InBev).
AB InBev is also the largest player in Canada‚ where SABMiller’s North American partner‚ Molson Coors‚ will halt the distribution of SABMiller beers from April next year.
SABMiller will try its hand in Brazil again through a joint venture with the country’s second biggest player‚ Grupo Petropolis. In contrast to SABMiller’s prior arrangements in the country‚ Petropolis had a strong route to market capabilities‚ SABMiller’s Latin America president‚ Karl Lippert‚ told investors. A good distribution network and in-country production were prerequisites to SABMiller rejoining the market‚ Lippert said. The companies will target the small but growing premium segment of the Brazilian market.
Petropolis will initially produce one of SABMiller’s premium beers‚ which SABMiller will market in the country and invest in building the brand. The joint venture had the potential to produce 1-2 million hectolitres annually in Brazil over the next 10 years, he said.
Meanwhile‚ SABMiller also plans to start exporting to Canada from the US‚ after Molson Coors’ distribution deal comes to an end in April. The Canadian market will fall under SABMiller’s Latin America region.
Lippert said SABMiller’s Latin American business was likely to experience difficult trading conditions in the near term‚ as depressed commodity prices weighed on the region’s economic growth.
The International Monetary Fund last month trimmed its growth forecast for Latin America and the Caribbean to 1.3% this year and 2.2% next year.
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