Philippines, Manila: Strong beer sales by San Miguel Corp ahead of next month's Philippine elections should have boosted first-quarter profits at Southeast Asia's largest food and drinks group by at least 17 %, analysts said. Reuters wrote on April 19 that a wider local distribution network and stockpiling by sales agents ahead of an average 8% rise in Philippine beer prices last month were also seen as positive factors for the country's biggest company.

San Miguel, 15 % owned by Japan's Kirin Brewery Co, is due to report first-quarter results at its annual meeting on April 20. Analysts said that while it was unlikely a surge in beer sales could be sustained after the May 10 election, San Miguel's profits are expected to grow by five to 20 % this year from 2003 as consumption mirrors a recovery in the local economy. "We expect a robust first-quarter driven by domestic beer sales, which should benefit from election-related spending," said Julian Tarrobago, analyst at Philippine Equity Partners Inc.

The government has said it expects candidates to spend up to 30 billion pesos on their election campaigns, much of which was likely to go on giving away food and drink to potential voters.

San Miguel, which sells nine of every 10 bottles of beer consumed in the Philippines, is likely to report first-quarter net income of between 1.6 billion pesos and 2.8 billion pesos ($29-$50 million) versus 1.34 billion pesos in the same 2003 period, analysts said. For the full year, group profits are seen climbing to between 7.7 billion pesos and 9.0 billion pesos from 7.37 billion pesos in 2003, with an average forecast of 8.6 billion pesos from among 11 brokers polled by Reuters Research.

San Miguel has broadened its regional network in Australia, China, Hong Kong, Vietnam and Indonesia with deals to produce food and beverages in Thailand.

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