Analysis - Group Modelo to fare worse than Heineken after Mexico probe
Modelo could be more affected than its rival Heineken, according to one 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.
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