SAB ups marketing spend for FIFA World Cup

SABMiller is reportedly investing in fan zones near World Cup stadiums, revamping existing bars in townships and conducting other promotions behind its Castle brand to help hold on to its near 90 percent share of the South African beer market.

The brewer hopes the World Cup starting on 11 June will boost South African beer sales by 4 percent to 6 percent over the six weeks of the tournament. Alas, this will only translate into a one percent volume uplift in the market during SABMiller’s financial year to March 2011.

Chairman of SABMiller’s South African operations Norman Adami is optimistic for beer sales as it gives SABMiller a chance to defend its market share of around 88 percent to 89 percent.

Heineken and Guinness/Diageo, which recently opened their first brewery near Johannesburg, are said to aim for a market share of 20 percent.

AB-InBev, which brews Budweiser, has rights to beer sales in the World Cup stadiums during the tournament, which is expected to attract 200,000 foreign football fans. Budweiser will be distributed to the stadiums with the help of a local distributor.

SABMiller has responded to the advent of competition in South Africa by raising the annual growth of its marketing spend above the domestic inflation rate of around 5 percent to back its key brands Castle, Carling, and Castle Lite.

South Africa is still SABMiller’s most profitable market, making 22 percent of group earnings and accounting for 17 percent of its worldwide beer volumes.