Blog: Europe - the troublemaker?
Olly Wehring | 3 September 2007
A brace of figures last week has highlighted the tough times currently being weathered (no pun intended) of late by drinks companies in Europe.
While Diageo saw its full-year results held back somewhat by Europe, and the UK in particular, InBev warned that volumes in the UK in its second quarter took a 10.7% dip, which "implied some share loss".
Coinciding with tricky conditions in Europe, came a report last week of the potential on offer in the so-called BRIC economies of Brazil, Russia, India and China. The four developing countries have long been seen as potential cash-cows for every drinks company out there.
So, have they all given up the ghost on Western Europe? Of course, they haven't. But, as Diageo CEO Paul Walsh told just-drinks last week: "I don't make irrational investment decisions just to look good in the UK. It's nice, but it's not essential."
With the spotlight moving away from the mature markets, and attention centring on the BRIC economies, companies should still keep an eye on the spinning plate that is Europe. Whilst there are pressures of late on consumers in the UK, premiumisation remains an important driving force in the drinks market here across many of the categories and one poor summer will not put an end to that.
Furthermore, as we have argued on these pages before, investment in the BRIC and emerging markets whilst promising higher rates of ROI, also carry with them far more risk. The political situation in Russia, the fear China’s economy could still overheat, economic uncertainty in Brazil and the regulatory barriers to trade in India mean continuing stellar growth is far from assured.
Want to know how to make it to the top of the beverage business? According to Muhtar Kent, it's all about the networking....
A red sticker to a shopper is like a red rag to a bull. And as the masses charge at the deals, UK off licences and supermarkets are finding new and novel ways to entice the herd. ...
To celebrate its 250th anniversary, Cognac brand Hennessy is trumpeting a virtual time capsule, making a parallel between it and a barrel of Cognac....
Rarely do sponsorship deals pay off so quickly. ...
- Focus - Edrington's FY Performance by Brand
- Where Beer is Brewed Can Leave a Bad Taste
- Analysis - Storm clouds lift over Diageo Towers
- Analysis - Cider's Campaign Gains
- Analysis - SABMiller's LatAm aim? Drink more beer
- Former Bacardi exec takes De Kuyper CEO role
- Pernod Ricard appoints Absolut Vodka VP
- Beam Suntory to re-package Courvoisier Cognac
- Edrington posts FY profits drop
- TWE, Pernod hail China-Aus FTA
- Global liqueurs insights - market forecasts, product innovation and consumer trends research
- The IWSR Company Profile 2014 – Remy Cointreau
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- Global Tequila insights - market forecasts, product innovation and consumer trends research
- Beer, 2014 and the future