just the Facts - SABMiller in Asia Pacific
SABMiller now has 90 breweries in China, through its Snow brewery
SABMiller presented its current thoughts on its Asia-Pacific unit at a seminar in London yesterday (17 July). Here, just drinks takes a closer look at the company's businesses in the region:
SABMiller's Asia Pacific footprint
Asia Pacific represents 28% of the group's global volumes and 13% of its earnings.
Marketshare – 22%
Breweries – 90
Marketshare – 25%
Breweries – 10
Marketshare – 41%
Breweries – 6
Rest of Asia
In seven markets
Beer volumes in the country have almost doubled over the last decade, to 456m hectolitres in 2012. The top four players in the market – Snow (SABMiller), Tsingtao, Anheuser-Busch InBev and Yanjing Beer – have grown their combined market share from 28% in 2001 to 61% in 2012. SABMiller estimates that volumes will rise by 4.8% to 575m hl by 2017. The company has invested US$1.2bn since acquiring Snow in 1994, taking its number of breweries from two to 90 in that period. Its strategy in China is to develop premium brands, strengthen its existing position and look at new provinces to enter.
SABMiller estimates that its acquisition of Kingway will add around 1.5% to its marketshare in China.
Beer has a 4% share of the Indian market by volume and 14% by value. Alcohol is one of only three industries to be regulated on a state as opposed to a federal level. This means drinks companies are faced with 35 seperate excise regimes. SABMiller says beer is also at a disadvantage to other categories due to its affortabilbity, affected by higher duty levels relative to spirits.
Brewers are not required to specify alcohol content, but beer is either classified as mild (3% to 5% abv) or strong (5% to 8% abv). Around 80% of beer sold in India is in the 'strong' category'.
SABMiller is focussing on packaging innovation in India, such as selling its Knock Out and Foster's brands in PET bottles. It is also giving a big push to its re-launched Indus Pride, which is available in eight major cities.
The brewer is working on “fixing the fundamentals” at Carlton & United Breweries since acquiring the then-named Foster's Group in 2011. Asia Pacific MD Ari Mervis admitted that the company had been “potentially chasing volumes that didn't exist”. SABMiller highlighted its re-launched Victoria Bitter, with the original abv restored, a new 3.5% of Peroni and the fact that it owns Australia's leading on-trade draught cider - Bulmers.
Here, courtesy of analysts at Nomura, is a list of the purchases made in the global brewing industry between 1999 and last year, along with the EBITDA multiples paid....
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