Emerging markets keep Inbev on track

By staff reporter

- Last updated on GMT

Related tags Inbev Europe

Rising beer sales across Eastern Europe and Latin America during
the second quarter have taken international brewer Inbev a step
closer to becoming the most profitable brewer in the world.

Inbev said beer volumes were up 6.6 per cent in Latin America and 11 per cent in Central and Eastern Europe in its second quarter of 2006.

The group said this, plus greater emphasis on cost savings, had kept it on course to achieve its goal of becoming the most profitable company in the beer business.

Inbev, like other brewers, has worked hard to improve efficiency over the last couple of years, including unveiling plans to close breweries in the more mature Western European market.

The firm said it managed to avoid any increase in cost of sales during the second quarter of 2006 and made margin gains, but added it still had some way to go before it realised its aim.

"We are putting major efforts into market execution programs, brand buildingknow-how and cost management programs that are not yet up to speed in all parts of ourbusiness,"​ said Carlos Brito, Inbev's chief executive.

Inbev saw volume growth in all regions in the second quarter, although a rise of 0.6 per cent in North America shows this market remains challenging. The firm also admitted it still has "some way to go" to improve its UK beer business.

Big brands such as Stella Artois and Becks helped to spur growth in Eastern Europe and, lesser so, Latin America. But there were signs too that new markets in these regions has begun to open up for Inbev.

Romania, Serbia and Ukraine were star performers alongside Russia in Eastern Europe, while the group's acquisition of Quinsa in South America has opened up new possibilities in Argentina, Bolivia, Chile, Uruguay and Paraguay.

Latin America already made up more than 40 per cent of InBev's earnings before interest, tax and appreciation (EBITA) last year, twice as much as Western Europe, according to a 2005 report by Goldman Sachs​.

And Brazil, the world's fourth biggest beer market by volume and Inbev's base in the region, was more profitable for brewers than either Russia or China in 2003, the report said.

Related topics Manufacturers

Related news

Show more