What’s Schincariol up to?
In May, Schincartiol agreed to buy the Cintra brands that market leader AmBev had been forced to divest following a competition authority ruling.
At the Canadean Madrid conference in April there was open talk about Brazil’s privately-owned Schincariol brewing group being the next takeover target in Latin America. Schincariol is the country’s second largest brewer with an estimated market share of 13 percent. Which begs the immediate question: Hey, what’s become of Kaiser? The Kaiser brewery used to be in that slot. Is Kaiser, following its takeover by FEMSA in 2006, still in terminal decline?
Anyway, at the end of May Schincariol agreed to buy the Cintra line of beers from AmBev (part of InBev) – the brands not the two breweries that Cintra has in the states of Rio de Janeiro and Sao Paulo – thus helping AmBev out of a spot of bother.
Last year AmBev had bought Cintra, a brewing and beverage group started by some Portuguese, in a two-step process. First AmBev acquired Cintra’s production facilities for USD 150 million, and then it bought its brands for USD 10 million. Cintra has a 0.8 percent market share in Brazil and a 5 percent market share in Rio de Janeiro state. Apparently, AmBev’s main objective was to increase production capacity, especially for carbonated and non-carbonated soft drinks, in Rio de Janeiro and to block local rivals such as local brewer Schincariol and Portugal’s Sagres.
Unfortunately for AmBev, it got slapped on its wrists by CADE, Brazil’s competition authority, for so doing and told to sell off the brands.
That’s when Schincariol stepped in and took the Cintra brands off AmBev’s hands for the stately sum of USD 23 million. Cintra sells around 1.3 million hl of beer a year, mainly in Brazil’s south-east. The deal will increase Schincariol’s Rio de Janeiro market share and bring up its national market share to 12.9 percent from 12.1 percent, it was reported.
Many will be wondering: Why did Schincariol not buy the brands in 2007 when it could have got the assets at a cheaper price? And why help out AmBev now, unless Schincariol, through buying more beverage assets, tries to make itself pretty for an eventual sale?
