Sales of beer in the Central and South American region will continue to rise in the medium term future according to a new report. Beverage industry analyst Canadean claims that low per capita consumption levels provide scope for volume demand to rise by almost a fifth by 2007.

The report contains data on all of the sub continent's markets and takes a detailed look at the seven major beer consuming nations of Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela, which between them account for 94% of volume.

Although many beer markets declined during 2001, the region's overall demand rose by 2% to 230 billion litres, led by real growth in Brazil, Mexico and Venezuela, which were responsible for more than three quarters of sales. Canadean believes that in recent years all Central and South American markets have shown a strong relationship between economic performance and beer sales. Any major positive developments will therefore be initiated in the core markets.

The strong trend to concentration is mirrored at the production end of the equation, with the emergence of a number of monopoly and duopoly markets and major brewers developing pan-regional aspirations. While the top ten players satisfied more than 90% of demand, the largest, the Brazilian Ambev, which also operates in Argentina, Venezuela and Uruguay, accounted for 30% of regional volume. The second largest, the Mexican Grupo Modelo, lost out slightly in terms of its domestic market share but recovered ground by increasing export volume, more than 80% of which went to the US.

The low level of imports to the region is expected to remain largely unchanged, mainly due to the expertise of the larger brewers in arranging an increasing number of licensing arrangements. Ambev, for example, has recently acquired the rights to market Skol Pilsen, Brazil's favourite beer, throughout the whole of the region. Since the top ten brands already scoop 64% of all regional sales this latest move will further reinforce the trend to consolidation.

Other aspects of the industry are not expected to demonstrate major changes in the foreseeable future. Packaging presents a stable picture, with refillable bottles continuing to dominate for reasons of economy. The only significant development in the last five years has been the increase in the use of cans, particularly in Brazil where a quarter of all beer is now sold in this format.

Distribution is also thought likely to continue along traditional lines with the tiendas or traditional stores dominating sales, and supermarkets making only small gains in Brazil and Mexico.