World: InBev to seek acquisitions in Latin America and Asia
Belgian InBev NV, the world’s leading beer maker, is to look for more acquisitions in Europe, Asia and Latin America to increase sales faster than rivals such as Anheuser-Busch Cos., Chief Executive Officer John Brock said, according to a publication of Bloomberg from September 28.
Brock is interested in buying smaller companies in China, Russia, Germany and Latin America, he told reporters today at InBev's headquarters in Leuven, Belgium. InBev may look for purchases in Peru, Ecuador, Venezuela, Mexico and Spain, as well in Vietnam, the Philippines and Thailand.
InBev has emerged as the world's biggest beermaker by volume from 17th-largest in 1990 through transactions including the $11.2 billion-purchase of AmBev, South America's biggest brewer, a year ago. The Belgian company, which changed its name from Interbrew last year, also is introducing Brahma, Stella Artois and Beck's, its three main brands, into new markets to stimulate growth.
“The old Interbrew was an acquisition machine, but now we're seeing targeted mergers and acquisitions as a critical component but not the only one,'' Brock said. Asked if he would consider making another large transaction, the CEO said “never say never.''
InBev's takeover of Sao Paulo-based AmBev gave the 639-year- old Belgian brewer a foothold in six of the world's seven fastest- growing beer markets. InBev expects Mexico, Vietnam and Thailand to be among the top 10 growth markets by 2015. The company exports beer to those countries, though it doesn't yet have operations there, Brock said.
In China, the world's largest beer market with a value of $21 billion, InBev wants to increase its market share from 10 percent by making acquisitions in the five provinces it currently operates in, according to the CEO. The company has 28 breweries and 18 joint ventures in China.
Beer consumption in the Asian country is growing by an average of 8 percent a year, according to Brent Willis, the president of InBev's operations in the Asia Pacific region.
``Consolidation costs in China are high as all the four major players want their share of the world's fastest-growing market and see it as the holy grail of growth,'' said Willis, who helped introduce the Kraft brand to China when he was a marketing executive at Kraft Foods Inc.
InBev needs to expand further in Russia, where it's the No. 2 beermaker, because production capacity may run short, Brock said. Russians will probably drink an average of 70 liters of beer each by the end of 2010, up from about 54 liters last year, according to UBS AG. The market has doubled in size since 1999, the bank has estimated.
Heineken NV, the country's third-biggest brewer, has made four acquisitions in Russia this year, turning the country into the Dutch company's biggest market by volume. “In Russia, there is not a single acquisition that Heineken did that we would have done,'' Brock said. “Heineken overpaid and has the wrong brands.''
Brock is relying on expansion and sales growth in emerging markets to remain less dependent than Heineken and Carlsberg A/S on shrinking Western countries. The strategy has paid off: InBev reported an 86 percent gain in first-half profit earlier this month, led by beer sales in Latin America, while Amsterdam-based Heineken posted an 8.2 percent decline in earnings for the same period.
Heineken makes about two-thirds of its sales in Europe and the U.S., compared with a third for its larger Belgian rival.
Europeans are buying cheaper beers from supermarket chains including Tesco Plc after Ireland, Italy and Norway banned smoking in pubs and as slower economic growth reduced consumer spending.
In the U.S., consumers are increasingly opting for spirits and wine over beer amid a revival in a fashion for cocktails and entertaining at home. InBev's beer volumes dropped 3.7 percent in Western Europe and 2.3 percent in North America in the first six months of this year.
뒤로
E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .
