James Wilmore

Analysis - Group Modelo to fare worse than Heineken after Mexico probe

By | 12 July 2013

Modelo could be more affected than its rival Heineken, according to one analyst

Modelo could be more affected than its rival Heineken, according to one analyst

Grupo Modelo is likely to be worse affected than its rival Heineken by the opening up of Mexico's beer market, according to an analyst. 

In a note today (12 July), Nomura's Ian Shackleton said the Anheuser-Busch InBev-owned group has greater exposure to “mom-and-pop stores” in Mexico than Heineken's Cuauhtémoc Moctezuma. The Dutch brewer's subsidiary meanwhile has “greater exposure to convenience stores, mainly owing to its supply agreement to the Oxxo stores,” the analyst said. 

Shackleton added: “We believe that for both Modelo and Femsa (Heineken) the proportion of points of sale with written exclusivities is not dissimilar at just over 25%; however, Modelo has more non-written supply agreements.”

However, Grupo Santander analyst Anthony Bucalo said the agreements were a “long-term positive” for Modelo as it also opens up Northern Mexico where the group has a 30-40% share of the market and consumption is higher.

For SABMiller, Shackleton said it could make some share gains by importing more beer through its US JV MillerCoors. But he added: “Without access to a distribution system and with no local production, we see the opportunity here as limited.” 

To read SABMiller's reaction to the ruling, click here.

To see just-drinks' full coverage of the legal wrangling in Mexico, click here.

Expert analysis

Grupo Modelo S.A.B. de C.V. (GMODELOC) - Financial and Strategic SWOT Analysis Review

Grupo Modelo S.A.B. de C.V. (Grupo Modelo principally engages in brewing and sale of beer, stout, ale, lager, and lambic in Mexico. The company operates eight breweries and has a total annual installed capacity of 70 million hectoliters. It brews and distributes beer under 13 brands, including Corona Extra, Modelo Especial, Victoria, Pacifico, and Negra Modelo. The company exports six brands of beer and has presence across 180 countries such as Australia, Denmark, Greece, Ireland, Malaysia, Mexico, Norway, Singapore, Spain, Sweden, Taiwan, United Kingdom, and United States among others. The company, in alliance with Nestle Waters, engages in the production and distribution of bottled water brands such as Santa Maria, Nestle Pureza Vital and others, in Mexico. In addition, it imports the Anheuser-Busch InBev's products such as Budweiser, Bud Light and O'Doul's, as well as the Chinese Tsingtao brand and the Danish beer Carlsberg. Grupo Modelo S.A.B. de C.V. is headquartered at Mexico City, Mexico. In recent past, Anheuser Busch Inbev SA company anounced to acquire the remaining stake in Grupo Modelo S.A.B. de C.V., this step is taken to secure a leading position in the mexican domestic beer market.

Sectors: Beer & cider

Companies: Modelo, Heineken, Anheuser-Busch InBev, SABMiller

View next/previous articles

Currently reading -

Analysis - Group Modelo to fare worse than Heineken after Mexico probe

There are currently no comments on this article

Be the first to comment on this article

Related research

Heineken N.V. (HEIA) - Financial and Strategic SWOT Analysis Review

Heineken N.V. (HEIA) - Financial and Strategic SWOT Analysis Review provides you an in-depth strategic SWOT analysis of the company’s businesses and operations. The profile has been compiled by GlobalData to bring to you a clear and an unbiased view ...

Heineken: the battle for Asia Pacific Breweries

Asia Pacific Breweries is Heineken’s joint venture in Singapore, with a variety of brands and consumer beverages that enjoy prominence in their local markets. The venture is crucial to the firm's growth strategy. This has been compromised following a...

Grupo Modelo S.A.B. de C.V. (GMODELOC) - Financial and Strategic SWOT Analysis Review

Grupo Modelo S.A.B. de C.V. (GMODELOC) - Financial and Strategic SWOT Analysis Review provides you an in-depth strategic SWOT analysis of the company’s businesses and operations. The profile has been compiled by GlobalData to bring to you a clear and...

Related articles

just For Subscribers - The week in drinks

Here are the ten most viewed, subscriber-only items on just-drinks this week:

just the Round-Up - The week in drinks

The top ten stories published on just-drinks this week:

Analysis - Constellation Brands settles in to brewing role

It would have been easy to get carried away with Constellation Brands' third-quarter results yesterday.

Read more on this hot issue

Round-Up - Mexico's Beer Market Ruling

After a three-year investigation, Mexico's competition authorities announced the results of its probe into allegations of monopolistic practices in the country's brewing sector. Heineken and Anheuser-Busch InBev-owned Grupo Modelo seem satisfied, but the complainant - SABMiller - less so. Read just-drinks' full round-up of coverage here

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page