Post date: 11/25/2010 - 13:23
SAB MILLER to challenge AB-InBev in ARGENTINASABMiller Plc, the world’s second- biggest brewer by volume, bought the owner of Argentina’s Isenbeck and Warsteiner beer brands, entering a market which is dominated by larger rival Anheuser-Busch InBev NV.
SABMiller Plc, the world’s second- biggest brewer by volume, bought the owner of Argentina’s Isenbeck and Warsteiner beer brands, entering a market which is dominated by larger rival Anheuser-Busch InBev NV.
Cerveceria Argentina S.A. Isenbeck is the third-largest brewer in Argentina and sold 600,000 hectoliters of beer in 2009, SABMiller said today in a statement. AB InBev sold 12.86 million hectolitres of beer in Argentina in 2009, giving it 74 percent of the market, according to the company’s website.
“Its foray into an AB InBev-dominated territory shows the confidence SAB has in its Latin American division,” Simon Hales, an analyst at Evolution Securities in London, wrote in a report today. He has a “buy” rating on SABMiller stock.
SABMiller, the maker of Grolsch and Peroni beers, last week reported first-half profit that beat analyst estimates because of growth in emerging markets including Latin America, its biggest market. The brewer is market leader in six Latin American countries including Colombia, Peru and Ecuador.
Today’s acquisition, terms of which weren’t disclosed, is likely to prompt speculation that SABMiller may also seek to enter Brazil, according to Evolution’s Hales.
AB InBev controlled 69 percent of Brazilian beer sales in 2009 through its Cia. de Bebidas das Americas unit. The country has seen the fastest economic growth in more than two decades, and its gross domestic product may expand 7.6 percent this year, according to a central bank survey of about 100 economists.
SABMiller will “explore the potential in Argentina for its premium brands,” according to spokesman Nigel Fairbrass. CASA Isenbeck may allow the brewer to sell its beers in “adjacent markets” to Argentina, including Paraguay, Uruguay and the south of Brazil, Latin America’s biggest beer market, he said.
“The group is likely to concentrate its strategic efforts on growing share of premium segment in Argentina,” Hales said. “Successes and learnings from this strategy could be used to lay foundations for a move into the Brazilian premium segment.”