EUROPE: Drinks companies forced to consider euro break-up
Heineken pools more cash in low-risk countries
Europe's ongoing debt crisis is forcing drinks companies to consider how they might insulate themselves in the event of a break-up of the eurozone.
As leaders of Europe's biggest economies this week meet to try to agree on a deal that would prevent crisis from translating into disaster, many of the region's largest companies are working on contingency plans. Despite Germany's call for a deeper fiscal union in Europe, it remains possible that one or more countries may leave the eurozone altogether.
Multinational drinks firms are among those planning for all outcomes. A Heineken spokesperson told just-drinks today (5 December): "Heineken is a firm believer in the euro and the eurozone. However, like every other international company of our size and scope, we are following the euro crisis closely and are updating our business continuity plans accordingly."
He said that Heineken has increased efforts to pool cash resources in countries that are considered more financially stable. The Netherlands-based brewer is placing a greater focus on storing cash resources outside of the eurozone, "in case European money transfers get hampered".
Heineken's comments follow those by Diageo's Europe president, Andrew Morgan, who was quoted in the Financial Times newspaper last week as saying that the company has started looking at how a eurozone break-up would affect business. "With countries coming out of the euro, you’ve got massive devaluation that makes imported brands very, very expensive," he said. His comments were subsequently confirmed by a Diageo spokesperson.
A spokesperson for Anheuser-Busch InBev declined to comment specifically on the crisis, but said: "A-B InBev has limited exposure to Europe as a whole and especially little to the Southern part of it. In the first nine months of 2011, Western Europe represented 8% of our total global volumes, 11% of total revenue and only 7% of the normalised EBIT of the group. These numbers include the [non-eurozone] UK business, the largest business unit in the zone by volume and revenue." She said that the brewer believes it has the right strategies and plans in place for its brands.
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