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South America spurs SAB beer growth

By staff reporter , 10-Nov-2006

Emerging markets in South America have spearheaded beer sales growth for SABMiller over the last six months, outweighing doom and gloom in the US.

SABMiller's beer volumes in South America, aided by the group's takeover of the Bavaria brewer, rose ahead of expectations in the first half period, ended 30 September.

The news led a 33 per cent sales rise and a 22 per cent jump in pre-tax profit for SAB, which used strong branded growth in several emerging markets to offset more volume losses in the US.

 

SAB said it would increase capital investment in South America in order to position itself for long-term growth in the region.

 

The area has already shown promise for international brewers, and particularly InBev, but has long been overshadowed by fast-growing markets in Eastern Europe and Asia.

 

SAB recorded strong growth in these regions too. The firm's Chinese associated, CR Snow, became the country's largest brewer by sales volume during the half after its namesake beer brand moved into China's top 10.

 

Beer volumes in Russia, meanwhile, were up 25 per cent for the six months, twice the market growth rate.

 

The brewer also became the latest to report a beer sales boost across Europe from this summer's football world cup in Germany. The competition single-handedly helped volumes creep up one per cent in the Czech Republic.

 

Graham Mackay, SAB chief executive, highlighted variety, reach and brand building as key factors in the group's first half success.

 

"This good start to the year is a further demonstration of the advantage we enjoy in our access to growth markets and our ability to offer our customers and consumers comprehensive and varied portfolios of unique beer brands."

 

A rise in unique, imported beer brands has been credited for revitalising value in more stagnant beer markets in the UK and US.

 

SAB added to the trend, reporting that its Peroni Astro Nazzurro brand had increased volumes by 28 per cent in the UK and 23 per cent in the US. The firm said it will now attempt to combat losses in America by importing three of its South American beers, Cristal, Aguila and Cusquena.

 

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