Who’s behind the rumour that SABMiller wants to buy Schincariol?
Looks like the end game of globalisation could turn nasty. The privately-owned Schincariol, Brazil’s second-largest brewer, has strongly denied the claim that it has been put up for sale for about USD 2 billion and that SABMiller was the likely buyer. People familiar with the situation believe that Brazil’s market leader AmBev could be the source of the allegation, first published by the London Sunday Times on 3 April 2011, in the hope of denting Schincariol’s public image.
Being at the centre of a takeover speculation isn’t new to Schincariol. In 2006, media reported that Schincariol had received an offer from SABMiller, a claim Schincariol refuted.
Schincariol knows only too well that rumours, even if totally unfounded, are harmful to its business. If rumours that a company is for sale reach its distributors, the distribution channel can be destabilised and sales can be adversely affected. Moreover, top people might jump ship.
To Schincariol this rumour is bad news aimed straight at its heart and it’s not random at all. Another company is aiming that arrow.
AmBev, part of AB-InBev, holds a dominating 70 percent market share in the country, which ranks as the second fastest growing beer market in the world after China. The Brazilian beer market is forecast to increase by 22 percent by 2015.
Grupo Schincariol, a 25 million hl beverage company, which produces an estimated 13 million hl beer, is the number two in the beer market (11.2 percent) and is particularly strong in the north and northeast of Brazil, where it has 8 production sites.
While the whole of Brazil saw beer volume growth of 21 percent between 2005 and 2009, these two regions registered a consumption increase of 43 percent and 40 percent respectively.
AmBev recently reported that helped by minimum wages and other social programmes the north and northeast regions have seen beer market growth ahead of other regions but are still underdeveloped when compared to other regions in Brazil. Average beer consumption in Brazil was 61 litres in 2009, compared to 33.6 in the north and 46.3 litres in the northeast regions.
Beer volumes in Brazil grew by 3.4 percent in the fourth quarter 2010, a sharp slowdown from the 14 percent seen in the first nine months of 2010.
Brazil may be a growing beer market but that does not mean that competition is any less fierce or unfair than elsewhere.
