Analysis - Anheuser-Busch InBev, Carlsberg to miss out on Africa boom
Beer has good prospects in Africa
Analysts Bernstein said in its note today (19 March) that SABMiller and Heineken dominate the continent, taking about 56% of the profit pool. Meanwhile, A-B InBev and Carlsberg have “almost no exposure to the region”, the analysts said.
The two brewers will miss out on Africa's “superior operating margins by global standards” that stem from weak competition in local markets, the note said.
“Most of the future upside is likely to accrue to incumbents, as high barriers to entry make it very difficult for new entrants, especially those with little experience of this operationally challenging region,” the analysts said.
Africa has better long-term growth prospects for brewers than South America as consumption levels lag far behind global averages, according to Bernstein. Average annual beer consumption in Africa is nine litres compared to 70 litres in the US and 50 litres in Central & South America.
The three main brewers in Africa by EBIT as of 2011 are SABMiller (38%), Castel 20% and Heineken (14%), Bernstein said. Castel is 20% owned by SABMiller.
Africa accounts for 6% of global beer volumes, 7% of net sales and 9% profits, the note said.
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