AUSTRALIA: SABMiller finds Foster's a drag - analyst

By | 23 August 2012

Fosters Group will soon be up against Coca-Cola Amatil in its home market

Foster's Group will soon be up against Coca-Cola Amatil in its home market

An analyst has downgraded SABMiller's rating as the brewer's recently-acquired Foster's Group looks set to face tougher competition in Australia.

In a note released today (23 August), Nomura changed its advice from 'Neutral' to 'Reduce', blaming expected weaker margins by the end of the year. The analysts also said yesterday's announcement by Coca-Cola Amatil to enter the beer market will put further pressure on the underperforming Foster's unit.

SABMiller bought the brewer last year but has revealed that lager volumes in Q1 fell 13% at Carlton United Breweries, the Australian drinks arms of Foster's.

Nomura said its cautious view was confirmed by Heineken's first-half results yesterday, which reported higher input costs and foreign exchange fluctuations.

“In addition, price/mix appears to have been weak in Central and Eastern Europe, exacerbated by growth in discount channels,” the note said.

The long-term outlook for SABMiller remains attractive, Nomura said, adding that Anheuser-Busch Inbev's recent acquisition of Grupo Modelo makes a further bid for SABMiller by the rival brewer unlikely.

Expert analysis

Foster's Group Limited - Strategy, SWOT, and Corporate Finance Report

Datamonitors' Foster's Group Limited’s SWOT, Strategy and Corporate Finance Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and service offerings, detailed financials, and corporate actions, providing a 360° view of the company.

Sectors: Beer & cider

Companies: Foster’s, SABMiller, Amatil, Heineken, United Breweries, Modelo

There are currently no comments on this article

Be the first to comment on this article

Related articles

just the Round-Up - The week in drinks

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

AUS: Coca-Cola Amatil makes executive switch

Coca-Cola Amatil (CCA) has appointed a new director of new ventures in the company's Australian beverages division.

just On Call - CAGNY 2013: SABMiller CEO talks up local approach in global markets

SABMiller has prospered by taking a "bottom-up" approach in local markets instead of "force-fitting" a standard corporate model, according to the group's outgoing boss.

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