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.
It seems even 250-year-old Cognac houses want to be like Google these days....
It's not even available on pre-order yet, but Apple's latest piece of kit has already got a breathalyser app....
just-drinks is now closed for the Easter weekend....
Last year was tough for The Coca-Cola Co. So staff in Atlanta won't be pleased to read that Pepsi has overtaken Diet Coke as the no. 2 soda brand in the US. ...
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