Beer exports decline
EBITDA rose 16 percent to MXN 5.45 billion (EUR 317 million), and operating profit was up 18 percent at MXN 4.65 billion (EUR 271 million) in the fourth quarter.
Crown Imports LLC, a joint-venture with a unit of Constellation Brands, which distributes Modelo beer brands in the U.S., had sales of USD 473 million (EUR 351 million), and operating profits of USD 84 million (EUR 62 million).
Grupo Modelo is 50 percent owned by Anheuser-Busch InBev. Chief Executive Carlos Fernandez said in a conference call with analysts that the company expects to make capital investments of MXN 5 billion (EUR 290 million) in 2010. It plans to start production in the second quarter at a new brewery in the northern Coahuila state, which by early 2011 will increase installed capacity to 10 million hl.
As concerns the widely publicised arbitration case against AB-InBev, Mr Fernandez admitted that he had no new information on the outcome. Modelo took AB-InBev to court over the acquisition in 2008 of Anheuser Busch by InBev, which gave AB-InBev the 50 percent non-controlling stake in Modelo that Anheuser-Busch had. The arbitration hearing took place this past autumn but the judges have refrained so far from publishing a verdict.
As Modelo pursues arbitration against AB-InBev, it faces increased competition from Mexican rival FEMSA. In January, FEMSA agreed to swap its beer business for a 20 percent stake in Heineken.
Mr Fernandez acknowledged that the FEMSA-Heineken hook-up represents a competitive challenge for Modelo both in Mexico and abroad.
He said Modelo, which has a 58 percent share of the Mexican beer market, will continue with the marketing and administrative initiatives that helped the company increase sales in 2009 despite recessions in many markets.
Modelo’s officials said they expect the company to spend more on advertising in the second and third quarters because of the 2010 World Cup in June and July. If the Mexican soccer team fares well in the tournament, Mexico could even witness a minor beer sales boom.
"If our national team does good, I think we’ll do very good," Mr Fernandez was reported as saying.
