Inbev aims at cost cutting with pub sale
Belgian real estate group Cofinimmo in a bid to cut costs and focus
on its core beer operations.
The company announced Friday that it will sell a 90 per cent share in Immobrew, though it will continue to operate the outlets through a lease agreement with Cofinimmo. Immobrew operates about 1,000 pubs and bars in Belgium and the Netherlands The move continues Inbev's emphasis on cost savings, in a bid to achieve its goal of becoming the most profitable company in the beer business by expanding its brand globally. 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. Stéfan Descheemaeker, InBev's president of Western European operations, was confident the deal would continue the company's drive for greater profitability without forsaking its pub sales. "Freeing up resources will allow us to concentrate on winning with consumers, via our beer brands," he stated. "The on-trade segment in Belgium and the Netherlands remains a key priority for us as it is one of the main channels through which we connect with consumers." Despite putting a greater focus on brewing, InBev added that the commercial relationship with its pub tenants would not be affected by its latest strategy. By retaining a 10 per cent share in Immobrew, the company said that it would hold a 27 year long lease agreement with Cofinimmo as a condition of the sale. The agreement will cost Inbev €26.8m annually and comes with a renewal mechanism to extend the arrangement further beyond the original date The sale will allow Inbev to extend its focus on pushing further into emerging markets like Latin America and Eastern Europe where it has had increasing success within its beer brands. During the second quarter last year, Inbev improved beer volumes by 6.6 per cent in Latin America and 11 per cent in Central and Eastern Europe.
