Weak US sales affect Modelo and Femsa

It’s official now: The US recession began in March. But it was only during the third quarter of 2001 that beer sales began to slow down. Grupo Modelo, the brewer of Corona Extra, reported a sharp drop in third quarter profits due to weak sales in the US. With over 85 percent of its exports headed to the US, Modelo announced an operating profit of 1.9 billion pesos, a 7.2 percent decline year-on-year. Total sales rose 0.7 percent to 7.9 billion pesos, and domestic sales increased 4.6 percent but export revenue dropped 10.5 percent. Net profit for the third quarter fell 3.4 percent to 855 million pesos.
Femsa, Modelo’s domestic competitor, was also affected by the recession north of the border and 11 September atrocities, but apparently to a lesser extent. Beer sales declined 3..

Weathering the storm

Although the fizz has gone out of the Brazilian economy with economic growth declining to under 2 percent and reai’s value dropping 27 percent during the first nine months, AmBev reported firm third quarter results. The company announced a 17.1 percent increase in EBITDA to 389.7 million reais (US$149 million). The EBITDA margin, however, decreased 2.4 percent to 25.8 percent compared to last year. Analysts have not seen any indication yet that Brazilians will loose their thirst for beer but they warned that the longer the downturn lasts the greater the likelihood that poorer income groups will turn to cheaper alcohol alternatives.

CCU Chile opens new brewery in Temuco

Compañia Cerveceria Unidas S. A. (CCU) is a widely diversified beverage company operating mainly in Chile and Argentina. It is Chile’s biggest brewer, its second-largest soft drinks manufacturer, its biggest mineral water producer and its second-largest winemaker. In 1999, its share of Chile’s beer market was around 90 %.

Its premium beer brand Cristal is also Chile’s best-selling beer, with a market share estimated at 64 %. CCU is the only brewery which produces and distributes on a nationwide basis. It possesses two production facilities and one dedicated bottling plant. In January 1999, CCU discontinued production in the city of Concepción and replaced this facility by opening a new brewery in Temuco. CCU’s main competitor is Cerveceria Chile S.A.A.A.
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Great expectations

Interbrew’s North American operations, which include Labatt Brewing Company, the Oland Speciality Beer Company, Labatt USA, 50% of the Cuban brewing operation Bucanero and a 30% stake in Mexico’s Femsa, posted strong results in the first half of 2001. In the US, the sale of Labatt’s Canadian brands rose more than 10%. Its Mexican brands were up 10%. In the coming year Labatt expects to overtake Heineken as the major beer importer to the US.

Redevelopment plans for former Pabst brewery

The BrewCity Redevelopment Group, LLC (BrewCity) announced that it has negotiated an accepted offer with the Pabst Brewing Company for the purchase of the former Pabst Brewing Company complex in Milwaukee, Wisconsin. Located on approximately six city blocks centred near 10th Street and Juneau Avenue, the complex consists of 25 separate buildings on over 20 acres of land with over 1,600,000 square feet of space. The City of Milwaukee has designated the Pabst Brewing Company as a Historic District subject to the oversight of the Milwaukee Historic Preservation Commission. The City has nominated the Pabst Brewery for inclusion in the National Register of Historic Places in an application to the United States Department of the Interior..

Anheuser-Busch reaffirms positive growth outlook

The outlook for Anheuser-Busch Companies, Inc.’s sales and earnings growth continues to be favourable, executives of the company told a gathering
of investors at the Prudential Securities Consumer Conference in September.
W. Randolph Baker, Vice President and Chief Financial Officer, reaffirmed the company’s 12% target for earnings per share growth in 2001. Baker also reaffirmed that the company expects its domestic beer shipments and sales-to-retailers to increase 1.5% for the full year 2001, while at the same time achieving a revenue per barrel gain of approximately 2.8%.
"The domestic beer industry outlook for both volume and pricing is very strong," August A. Busch IV, Group Vice President, Marketing and Wholesale Operations, was quoted as saying.1% and were up 0..

Get it on, get it down, agogo

This is what guys and gals do. Brewers do it too - they only call it "sealing a partnership". Brazil’s AmBev and Mexico’s Femsa Cerveza are the latest couple to form an alliance in order to exchange strategic information and obtain distribution know-how in Latin America. Femsa holds 45% of the Mexican beer market, AmBev 70% of the Brazilian. Although the brewers claim that they pose no threat to each other as they are not be competing on the same turf, one should bear in mind that Interbrew North America has a 30% stake in Femsa. Now who’s in bed with whom?

Only a rumour

It may have been the Silly Season but a British newspaper reported that South African Breweries (SAB) was in talks with Kaiser, Brazil’s second largest brewer. The purpose? The purchase of Kaiser for an estimated US$500 million. After all Kaiser is controlled by Coca-Cola and SAB, which bottles and distributes Coca-Cola in South Africa, has a close relationship with the US beverage group.
Kaiser has been the target of many a take-over story all year. For months speculation has been rife that Heineken would finally raise its 15% stake in Kaiser and become more active on the Brazilian market (beer consumption was 81.8 million hl in 2000) which is firmly in the hands of AmBev. AmBev retains a 70% share of the market with beer volumes of 57.3 million hl.0 million hl of beer..

Stretching its wings

Having received the go-ahead to buy a 27% stake in New Zealand’s wine company Montana - while Lion Nathan was ordered to reduce its 62% stake to 43% - British drinks group Allied Domecq has bought the Buena Vista Winery in California. The world’s num-ber two drinks company paid US$85.5m for the US company from Germany’s Racke Company. The deal, which includes US$20m debt, would not produce any earnings in the first full year, according to Allied Domecq.

Coors second quarter profits down

Adolph Coors Co., the third largest brewer in the US, reported a 5.5% drop in second quarter earnings attributed to poor sales in Texas and California. Net income declined to US$50.5m from US$53.4m for the same period of last year. Net sales went up 3.4% to US$692.7m as gross sales rose 0.5% to 6.4m barrels. However, distributor sales to retail outlets declined 1.1% during the second quarter.