Having risen to the position of the world's second largest brewer, SABMiller is now showing further signs of abandoning its long held 'go it alone' policy and embracing global branding, strategic alliances and joint ventures. The announcement that SABMiller is to take control of Italy's largest brewer, Peroni, is further proof of this new modus operandi.

In a new report, beverage industry analyst Canadean claims that although the company, which has overtaken both Heineken and Interbrew in volume terms, holds a considerable portfolio of brands, few if any can be described as international. SABMiller's best seller, Castle Lager, owes its position to its strength in the South African market and is unlikely to be developed globally, while even the Miller brand family derives 93% of its total volume from the US. The report indicates that only Pilsner Urquell, a Czech brand, has a truly international pedigree and although volumes are currently small, the company has high hopes for its future sales in the US, Germany and the UK.

During 2002, Miller brewing was fully consolidated, whilst new ventures and acquisitions were undertaken in Kenya, Tanzania and Mozambique. Canadean claims that it could be argued that the acquisition of Miller Brewing was in part defensive since now it renders the company virtually immune to take-over. Virtually all, previous merger and acquisition activity had focused on emerging and developing markets, whilst this purchase was SAB's first move into a developed market.

In Central and Eastern Europe, where SAB has a strong presence, the process of consolidation is complete and SABMiller is now one of the three leading players. The company expanded in China during 2001 with the acquisition of the Blue Sword Breweries Group and now has sufficient capacity to supply one sixth of the domestic beer market. In Central America, synergies should start to come through during 2003 with further potential moves into Guatemala and Nicaragua after the purchase of the monopoly brewers in Honduras and El Salvador.

SABMiller prides itself on being an efficient low cost beer producer; its new Port Elizabeth packaging plant is considered to be among the most up to date in the world. Since the acquisition of Miller Brewing, the company has undertaken a complete review of all aspects of the US operation - and now believes that it has identified potential synergies. Rationalisation may well be considered since Miller, prior to its acquisition, struggled for a number of years to compete effectively with Anheuser Busch in a beer market where the only growth area has been premium imports.