SABMiller SA lager volumes flat, up 3% globally
Business Live - Oct 20th 2011, 09:54
SABMiller, one of the world's largest brewers with interests and distribution agreements across six continents, on Wednesday noted flat lager volumes in its native market South Africa in the first half of its 2012 financial year, impacted by weaker consumer demand. Overall however, the group said it sold 3% more beer in the first half.
SABMiller is listed on the London and Johannesburg stock exchanges and by late afternoon, shares in the group climbed slightly ahead of the local market average, gaining R3.38 or 1.19% to R288 on the local bourse.
"Beer consumption continued to vary across markets with further healthy growth in Latin America and Africa and underlying weakness persisting in North America and Europe," the group said in a trading statement covering the six months to end September 2011.
However, it said growth slowed in the second quarter, in part reflecting stronger prior year comparatives, and some particularly poor weather in Europe and China.
Soft drinks volumes grew by 6% for the half year.
In SA, "lager volumes were level in the first half year compared with the prior period in a market that declined slightly". The group said that although volumes benefited from an Easter peak in the first quarter, performance was impacted by weaker consumer demand and a higher base in the prior period reflecting the impact of the 2010 FIFA World Cup.
"The portfolio continued to benefit from targeted investments in its core power brands as well as continuing improvements in retail execution and customer service. Castle Lite remained the top performer, growing strongly, while Castle Lager also made good gains, and the successful repositioning of Castle Milk Stout translated into solid growth," the group said.
Soft drinks volumes declined by 3% during the first half year, cycling strong growth in the second quarter of the prior year. "Volumes in the period were adversely affected by colder and wetter weather and consequent subdued consumer demand," SAB said.
In Africa lager volumes for the six months grew by 15% with strong growth across the region. "Robust lager volume growth of 20% was delivered in
Tanzania aided by strong growth of the local brand portfolio. In Uganda, volumes grew by 23% driven by increased penetration in the west of the country and enhanced outlet branding and sales execution," SAB said.
Zambia volumes ended 22% ahead of the prior year assisted by favourable economic conditions and a strong performance by the Castle brands. Lager volumes in Mozambique grew by 11% driven by healthy growth of the mainstream portfolio. In Ghana, the brewer noted that strong economic conditions and improved availability resulted in lager volume growth of 54%.
The group lamented that growth slowed in the second quarter, in part reflecting stronger prior year comparatives, and some particularly poor weather in Europe and
China in the current period.
In Latin America, lager volumes grew 8%, while soft drinks volumes in the region ended the first half 12% ahead of the prior year driven by stronger distribution of non-alcoholic malt drinks in Colombia and the recent launch of a non-alcoholic refreshing malt variant, Maltizz, and strong performance across our Central American markets.
Lager volumes in Europe were level with the prior year, affected by the continuing fragile economic environment which further reduced consumer confidence and expenditure during the period.
In the six months ended September 2011, MillerCoors domestic sales to retailers (STRs) were down by 2.3% in a market which continued to be impacted by high unemployment and subdued consumer spending.
Asia's lager volumes were up by 4% for the first half, but with the benefits of regional acquisitions in China were up by 9%, in absolute terms. In China, lager volumes grew 5%, with double digit first quarter growth followed by a slight decline in the second quarter as a result of prolonged heavy rains in the Central region which limited consumer demand.
In India, volumes declined by 7% with robust growth in September, following the lifting of trading restrictions in Andhra Pradesh, partially offsetting the impact of excise increases implemented across a number of key states at the beginning of the half year, SAB reported.
In the year ended March 2011, the group reported US$4.491 billion adjusted pre-tax profit and group revenue of US$28.311 million.
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