Brazil: SABMiller might bid for Schincariol, according to media

SABMiller might bid for Brazil's second-biggest beer maker as part of its drive to expand in Latin America, the Valor Economico newspaper said on Friday, February 24, citing people familiar with the situation.

According to Bloomberg, Primo Schincariol Industria de Cervejas e Refrigerantes executives contacted their counterparts at SABMiller and Molson Coors Brewing last year to sell part of the company, the paper said.

SABMiller, which bought Colombian brewer Bavaria last year, might be negotiating a reduction in Schincariol's 1 billion real (R2.9 billion) tax debt, Valor said, citing sources it did not identify.
Schincariol has 12 percent of Brazil's beer market.

Valor quoted SABMiller spokesperson Nigel Fairbrass as saying the company did not comment on "market rumours". Adriano Schincariol, the chief executive of Schincariol, was not in his office when sought by Bloomberg for comment.

Meanwhile, SABMiller, the world's third-largest brewer, said it expected an increasing preference among drinkers for premium beers and rising demand in emerging markets such as eastern Europe and Latin America to fuel the company's growth.

Consumers were "moving into beer as an aspirational mainstream alternative to cheap spirits, or other types of local indigenous alcohol", chief executive Graham Mackay said last week at the Consumer Analyst Group of New York's annual conference in Arizona. "This is increasing beer's share of total alcohol across the emerging market landscape and there is a long way to go."

London-based SABMiller said last month that beer volumes in Africa and Asia rose 12 percent in the fiscal third quarter, led by China. The growth rate for Europe was 4 percent. South American beer sales by volume rose about 7 percent, fuelled by the takeover of Bavaria, which was completed in October.

SABMiller is pursuing growth in eastern Europe, Russia, Latin America and Asia as consumption in the US and western Europe wanes. The company has made two of the three biggest acquisitions in the industry's history, including the purchase of Bavaria.

In the US and other developed markets such as western Europe, consumers were increasingly opting for spirits and wine and were trading up to premium beer brands, Mackay said.

At the same conference, Norman Adami, the president of SABMiller's Miller Brewing, said the business would "strengthen" and "clarify" Miller Lite's brand position, while establishing a "clear" and "bold" position for Miller Genuine Draft.

Miller would focus on balancing brand building with cost management to "weather the likelihood of ongoing price pressures," he said.

SABMiller also said it would invest "significant" resources in improving the image of beer through marketing and packaging in Panama, Colombia, Ecuador and Peru, where it has bought businesses. SAB shares fell 1.09 percent to R122 on the JSE on Friday, while the Top40 index fell 1.03 percent.

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