Increased sales at Grupo Modelo

Grupo Modelo reported that during the third quarter ended 30 September 2000, shipments of beer grew 13.3 % compared to the same period last year. While domestic sales rose 5.3 %, export sales increased 42.7 %. Export shipments accounted for 27.0 % of sales, up from 21.4 % registered during the third quarter 1999. During the first nine months the Mexican brewer sold 27.6 million hl of beer. Total net sales for the third quarter were 7,467 million pesos (+ 16.8 %), operating income was 1,842 million pesos (+ 31.8 %). Net margin was up 25.6 % and at 833 million pesos represented 11.2 % of net sales. Operating expenses grew below net sales which shows the efforts Grupo Modelo has been making in order to improve productivity, commented Carlos Fernández, CEO of Grupo Modelo.

Higher output expected

Mexico anticipates a 5.2 % increase in beer output, together with higher exports in 2000. Due to positive trends in the sector, experts forecast good sales opportunities for suppliers of brewery equipment. The United States has a dominant role in the Mexican beer market in terms of exports and imports. According to the experts, the increase in beer output in 1999 was driven by exports with a plus of 17 %. Mexican beer is becoming more popular all the time, in particular in the United States. 86 % of the industry’s total exports of US$ 721m in 1999 went to Mexico’s northern neighbour. Sales opportunities for the well-known Corona and Sol brands are good in the US. By comparison, Germany imported US$ 2.5m worth of Mexican beer in 1999.6 % in 1999. Along with exports, beer imports rose also.

Heavy tax burden

About 70 of Canada’s microbrewers have begun lobbying for a 60 % reduction in the excise tax. The craft brewing industry employs 3,300 people directly and indirectly and pays about CAN$ 21 million per year in excise tax, according to the newly formed Canadian Council of Regional Brewers. Canadian brewers, irrespective of size, pay CAN$ 2.30 per case in excise tax. However, it costs them almost twice as much to produce a case of beer: CAN$ 230 per hectolitre against the major’s (Labatt and Molson) CAN$ 128. While US microbrewers already benefit from a lower excise tax burden compared with the big brewers, Canadian microbrewers have to operate in an uneven playing field. They fear that the excise tax makes them non-competitive and will eventually price them out of the market.

Kaiser’s new leader

In 2001, Miguel Alacron, formerly of bottling company Coffin, which is owned by Coca-Cola, will take the reins at Cervejaria Kaiser, replacing Humberto Pandolpho as president. The position of CEO was created for Augusto César Parada, whose task will be to increase Kaiser’s market share, which has fallen slightly from 13.2 % last year to 12.8 % this August, according to AC Nielson. Courtesy of a change in the distribution regulations, beers and other beverages can now be part of an establishment’s single account. Before CADE authorised the reclassification of the beverage market, retail outlets had two different accounts - for example, one with Kaiser and one with Coca-Cola. Parada announced that beer prices will go up between 5 % and 8 %..

Girl from Ipanema

Perhaps they should have remembered the song "The Girl from Ipanema" in which a haughty Brazilian Girl walks by and does not even take notice of the Bossa Nova-ing bloke. Let’s hope the same fate does not befall the Canadian brewer Molson, who is reported to be buying the Bavaria beer brand and five plants from market leader AmBev. The divestiture of the Bavaria brand and five plants was the condition made by the Brazilian competition watchdog, CADE, in spring this year for the approval of the merger between brewers Antarctica and Brahma. The deal being performance-driven, Molson will pay an initial US$ 98 million for the Bavaria brand plus access to AmBev’ distribution network. The balance of sale is triggered by increased market share over the next five years.5 %.5 % per year..

Did you know ...

... that on-premise beer consumers are predominantly male (84%), with 60% under the age of 35 and 73% having over US$30,000 in annual income? Makes the barfly an almost exclusive male phenomenon. Moreover, some 53% of weekly beer sales, on premise that is, occur on Friday and Saturday with consumption fairly consistent throughout the remainder of the week.

... Control is better

Anheuser-Busch and Mexico’s tequila regulatory council (CRT) have come to an agreement, which allows representatives of the CRT to enter A-B’s breweries where Tequiza is produced in order to verify tequila flavouring quality and authenticity.

A-B appoints European boss

Anheuser-Busch International has appointed Andrew Day as Vice-President and Managing Director of its European operations. He will also be overseeing operations in Africa and the Middle East. Day replaces William McNulty who has returned to the brewer’s US headquarters in St. Louis.

Budweiser fashion

While Marlboro is still rumoured to consider extending its brand to hotels, Budweiser has signalled that it will launch a clothing range for men next year. The range called The Genuine Article will consist of three lines: Genuine, Contemporary and Basic. Budweiser’s logo will be featured discreetly on the garments. Genesee in buyout talks.

Spreading its wings

AmBev and Groupe Danone have signed an option contract to buy Salus, the second-largest brewer in Uruguay. In 1999 Salus reported sales of US$30 million.