Fidest – Agenzia giornalistica/press agency

Quotidiano di informazione – Anno 34 n° 19

AB InBev results – what do they mean for the brewer

Posted by fidest press agency su giovedì, 5 Maggio 2016

John Colley, a Professor of Practice at Warwick_Business_School_Scarman_road_view who researches mega mergers such as that between AB InBev and SABMiller, has made the following statement:”Beer volumes and earnings both suffered in the first quarter as AB InBev demonstrated why it needs the SABMiller acquisition. Overall beer volumes were down 1.4% and earnings declined due to currency and increased expenses.
“SABMiller will provide growth markets in Africa and South America. AB InBev seem willing to readily part company with acquired brands in the mature markets of North America, Europe and China to appease competition authorities. Whilst AB InBev offers reassurance that the acquisition is on track for the second half of the year there may still be more demands from competition authorities to be met.”If you look at the numbers, volumes declined by 1.2% in the USA partly as a consequence of lost market share.”Brazil beer volumes declined 10% resulting from the economic turmoil there. Chinese volumes also declined by 1.1% as AB InBev remains under pressure.
“However a major positive was the 13% increase in Mexican volumes partly as a response to increased marketing investment. Overall pressure on volumes in difficult and mature markets has resulted in AB InBev increasing selling and marketing expenses by 13.5% to counteract the lack of growth.”AB InBev, despite the decline in earnings, continues to dominate the global beer industry with margins way ahead of their competitors. Following the SABMiller acquisition they will be almost six times the size of the next biggest brewer Heineken.”Unrivalled scale and scope economies together with market power and strong distribution channels and an ability to deliver on acquisitions makes them a formidable business. However further acquisitions in the beer industry may be difficult due to competition issues.”

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