As could be expected, many on the bloggosphere screamed "à la lanterne" when an article appeared in the Belgian magazine Trends on 9 March 2012 which said that AB-InBev’s CEO Carlos Brito was entitled to a super bonus of EUR 133 million. What had Mr Brito done to earn this? Bring down debt two years ahead of target that had been piled up following the acquisition of Anheuser-Busch.
In an effort to clamp down on binge drinking, the Prime Minister has radical plans. Taking his lead from Scotland, whose parliament voted on 14 March 2012 to introduce a minimum price per unit of alcohol as of next year, David Cameron, on 23 March 2012, proposed the same for England and Wales.
Intensifying their support to authorities to fight alcohol misuse, Europe’s 3,500 brewers launched a Pledge at the European Parliament on Tuesday to increase consumer information, enforce responsible advertising and conduct new awareness campaigns reaching out to young adults, drivers, and pregnant women.
Why worry about economic troubles in the eurozone? In 2011 the Americas, that’s mainly the U.S., Canada and Brazil, contributed a staggering 94 percent to AB-InBev’s profits in 2011 (as measured in EBIT). The world’s largest brewer AB-InBev reported on 8 March 20111 that last year it benefited from higher demand and higher prices in Latin America. This way it more than compensated the decline in sales in the U.S. and sluggish volumes in western Europe. Sales rose almost five percent to USD 39 billion (EUR 29.6 billion). AB-InBev actually sold less beer last year than in 2010, but charged more for it and grew its premium brands. It also cut sales, distribution and administration costs.
How did AB-InBev manage to raise its beer sales in Germany by 5.2 percent in 2011 while the overall beer market declined by almost 1 percent? Obviously by heavy discounting. According to estimates by GfK, a market research firm, Germany’s national pils brands, Beck’s among them, sold over two thirds of their volume on promotion last year. That’s usually at a price below EUR 10 for 10 litres or at a 30 percent discount.
The rumour mill is spinning wildly. According to gossip mongers, the Japanese brewer Asahi is only days away from buying eastern European brewer StarBev in a deal likely to fetch up to USD 3 billion. If Asahi finally manages to clinch a deal, it will be a true indication of how desperate the Japanese alcohol producers are to grow overseas sales.
They have had Sam Adams contract-brewed in the U.S. for decades, so why not have it produced under licence abroad? In February 2012, U.S. craft brewer Boston Beer said that Kent-based Shepherd Neame will now be producing the beer after having previously served as their importer into the UK.
Italy, the eurozone’s third-largest economy is in recession and prime minister Mario Monti predicted worse to come. What do brewers do in times of economic crisis? Change executives. Roberto Jarrín, 46, is the new CEO of Birra Peroni, the Italian subsidiary of SABMiller Group.
Brewers in Russia can expect another two years of disruption as the beer market adjusts to recent sales restrictions, Fitch Ratings agency reported in early February 2012. Wouldn’t Carlsberg know? The world’s number four brewer has long been looking for a way to reverse the steady decline in sales from its Russian market, which has been hit by a combination of spiralling taxes designed to curb alcoholism and intense competition.
Reporting season may be upon us, but who can really work up an interest in Big Beer’s profits going up or down while colourful Czech politicians are busy writing yet another cliff-hanger in the never-ending Budweiser saga?