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China, Russia buoy SABMiller sales

By Chris Mercer , 13-Apr-2006

Emerging beer markets in Asia and Eastern Europe have continued to buoy SABMiller over the last year, amid problems in North and Central America, the firm said in a trading update.

Shares in SABMiller dipped slightly on Thursday morning, after the brewing giant announced sales of its Miller beer brand to North American retailers dropped one per cent in the year up to 31 March.

The group also said beer volumes in Central America had dropped five per cent compared to 2004, while poor summer weather dented its volumes in South Africa.

The news adds further evidence that trusty emerging markets in Asia and Eastern Europe, led by China and Russia, are increaasingly keeping sales growth afloat for several international brewers.

SAB said it increased lager volumes in China by 14 per cent compared to 2004. Volumes were up five per cent in Europe, thanks to Russia, Romania and Poland.

Graham Mackay, chief executive of SABMiller, said at a recent analyst conference that beer still had a long way to go in emerging markets. He said some consumers were trading up to better quality beers, while others were choosing into beer as an alternative to cheap, local spirits.

Average per capita consumption of beer stands at 60, 31 and 23 litres per year in SAB's markets in Eastern Europe, Latin America and China respectively, compared to an average of 84 litres per year in the US.

SAB is thought to be eyeing opportunities to enhance its position in China, to take better advantage of the strong growth it has seen there.

A source close to the group told BeverageDaily.com recently that it had held preliminary talks with Australian brewer Foster's, over a possible deal to buy Foster's Asian brewery network.

SAB is already number two on China's beer market, and analyst group Goldman Sachs has predicted the Asia Pacific region as a whole to show the fastest beer market growth up to 2010.

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