Brazil: AB InBev convinced about the potential of Brazilian consumer market

Anheuser-Busch InBev, the world's largest brewer, remains convinced about the potential of the Brazilian consumer market despite declining beer sales over the past two years and a particularly tough 2016, Reuters reported on April 26.

The Belgium-based company has suffered successive years of declining beer volumes in Brazil, with the price it earned per litre also dropping in 2016 as disposable incomes fell and the unemployment rate reached its highest level since 1995.

The company's volumes in its second-largest market last increased in 2014, when Brazil hosted the soccer World Cup.

"It can be very deceiving," Chief Executive Carlos Brito told a news conference after a meeting of the company's shareholders on April 26.

"When we look at Brazil on a long-term view those two bad years don't change our view in terms of the fundamentals and the pillars that Brazil will continue to be an amazing market for consumer goods companies and beer," he added.

AB InBev, which paid around $100 billion to take over its nearest rival SABMiller last year, in 2016 suffered its first decline in core earnings since its formation over a decade ago as recession-hit Brazil depressed beer sales by even more than expected.

Brito said positive factors included population growth and a young demographic, the fact that some regions still had room to catch up, the willingness of consumers to buy higher-priced premium brands and the improved attractiveness of Brazil to foreign investors.

The AB InBev chief said that the two lean years did not break the overall upward trend for Brazil.

"It's just like many markets not a straight line. Sometimes you have one or two bad years and those fundamentals kick in again... We don't panic with one or two bad years because we always have our eye on the long term."

The maker of Budweiser, Stella Artois and Corona will report its first-quarter results on May 4.

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