Brazilian beer giant AmBev said on February 19 it would spend $38 million over the next 12 months to build its first brewer and distribution network in Peru, which it plans to have up and running in the first half of 2004. "AmBev's decision to pursue a greenfield project in Peru is a consequence of: the growth potential of the market, the company's internationalization strategy in Latin America, AmBev's developed know-how in the launch of greenfield projects, and the relatively low entry cost," it said in a statement.

AmBev's will go head-to-head in the Peruvian market with Union de Cervecerias Peruanas Backus & Johnston, the sole domestic brewer, which has a virtual monopoly in Peru's beer market. Since its formation in 2000, AmBev has tended to buy rivals rather than start operations from the very beginning.

Although analysts say AmBev's progress in the market will be slower than it is perhaps used to, they agree Peru's relatively low per capita beer consumption meant there was plenty of space to grow.

The move shows AmBev's appetite for expansion has not diminished as the ink is still wet on a $600 million alliance with top Argentine brewer Quilmes Industrial (Quinsa), which gave it greater access to Argentina, Bolivia, Paraguay and Uruguay.

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