SABMiller sees more LatAm growth, Brazil at standstill
LONDON (Reuters) - Global brewer SABMiller (SAB.L) expects more growth from its business in Latin America, its largest market, even though the company has limited exposure to high-growth Brazil and Mexico.
"We believe we can continue to deliver mid-single digit volume growth and upper-single digit revenue growth for the foreseeable future," SABMiller's Latin America regional chief Karl Lippert said in a presentation to investors on Monday.
The brewer has more than 90 percent of the beer market in Colombia, Peru, Ecuador, Honduras and El Salvador and the region provides around a third of global earnings for the brewer of Peroni, Cusquena and Pilsener.
It is seeking to increase consumption among its core low income consumers by attacking illegal alcohol sales and introducing new packaging, such as 750 ml sized bottles to improve affordability, Lippert said.
Per capita beer consumption in SABMiller's Andean and Central American markets still lags Mexico and Brazil, where the group has limited exposure.
Lippert said Brazil's market was complex and at current exchange rates competing in South America's biggest economy was not realistic. "For the moment we are at a standstill with Brazil," he said.
In Mexico, SABMiller has some imports, mostly in the northern regions close to its Miller's breweries in Fort Worth, Texas. But penetration into the market has been held back by the tight grip of Grupo Modelo (GMODELOC.MX), half-owned by AB InBev (ABI.BR), and Heineken's (HEIN.AS) local business, which have exclusive contracts with retailers.
SABMiller has joined with other companies to challenge the set-up with Mexico's competition regulator, and a ruling is due this month.
"We're feeling positive about it opening up," said Lippert.
(Reporting by Rosalba O'Brien. Editing by Jane Merriman)