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SAB targets Africa for growth

By Adele Shevel | Jan 20, 2010 | COMMENTS [ 0 ]

SABMiller's beer volumes rose seven percent on an organic basis in Africa in the third quarter, proving the continent one of the group's primary growth drivers.

But the group did not meet analysts' growth forecasts as SABMiller reported flat volumes for the quarter compared with the previous year, which the group reported yesterday in a trading update.

The world's second largest brewer said that beer volumes were up 17percent in Zambia, 11percent in Mozambique, 17percent in Angola and volumes were strong in Uganda. Volumes in Botswana and Tanzania were down on a year ago.

SABMiller continues to take strain in South Africa where beer volumes dropped four percent as the country continued to experience a softening consumer demand.

Market share declined marginally over the quarter. SAB has been losing market share to Heineken, which started producing locally for the first time.

Soft drinks volumes dropped five percent in South Africa, due to a weak economy and "unseasonal" cold weather at the start of the quarter. Consumer demand varied across markets at group level with some showing tentative signs of recovery, while demand in others remained subdued.

Beer volumes grew four percent in Latin American in the quarter, while sales were weaker in Europe where beer volumes declined two percent on an organic basis and dropped 3,6percent in MillerCoors in the US.

The brewer, which owns brands such as Peroni, Grolsch, Castle and Miller Lite, said its financial performance in the quarter was in line with expectations.

SABMiller CEO Graham Mackay has earmarked Africa as the region with the strongest organic growth profit prospects for the group.

Not only do sales come off a low base, but population growth outstrips that of anywhere else in the world. Average consumption of clear beer is six litres a person a year, compared with 60 litres in South Africa.

SABMiller operates in 16 countries in Africa and is in a further 22 countries through a strategic alliance with the family-owned Castel Group.


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