SABMiller lifts LatAm beer target on economy boost

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* Raises beer volume target for Latin America
* Sees Q1 regional beer volumes up around 6 percent
* Looks at further opportunities in region (Adds detail)

By David Jones

LONDON, July 5 (Reuters) – SABMiller , the world’s No. 2 brewer, raised its forecast on Tuesday for beer volume growth in its biggest region, Latin America, due to price cuts and a strengthening economic recovery.

The London-based brewer of Grolsch, Peroni and Miller Lite, which is bidding for Australian group Foster’s , said regional beer volume in April-June was up around 6 percent while its key Colombian market had seen 10-percent plus volume growth in June.

“Our volume target is going up as economic recovery is now feeding through to consumption, and due to our strategy of making beer more affordable,” Karl Lippert, president of SABMiller’s Latin America region told an investor seminar.

The better performance and raised target contrasted with its year to March 2011, when regional beer volumes were flat and Colombia — which accounts for more than half of regional profit — saw volume drop 6 percent due to tax rises and heavy rains.

The brewer, which makes 31 percent of its profit from the region, said the recovery in its first quarter of April-June was very good in Colombia, Panama, Honduras and El Salvador, modest in Ecuador and soft in Peru and Argentina.

The group which makes Aguila, Club Colombia and Cusquena beers in the region, raised its 3-5 year target for volume growth to 5-8 percent a year from 4-6 percent, while cutting its revenue goal to 2-4 percent from 3.5-5.5 percent due to price cuts.

Lippert said the group was looking at expansion in Latin America away from its strongholds in Colombia and Peru after it made a brewery acquisition in Argentina last year, entered the Brazilian beer market in January, and the Bolivian beer market three weeks ago.

“There are opportunities going forward, Brazil is one opportunity on the table and you would expect us to have a look,” said Lippert, adding the group had started selling its Miller Genuine Draft beer in southern Brazil this year.

Brazil is the world’s third-largest beer market after China and the United States and, with a population higher than the rest of South America, is an obvious target for growth. The market is dominated by the world’s largest brewer Anheuser-Busch InBev with a market share of near 70 percent.

Brazil’s second-largest brewer, privately owned Schincariol, has been reported to be up for sale for around $2 billion, and SABMiller and world No 3 Heineken have been reported to be interested.

Lippert declined to comment further on Brazil and also on Foster’s after SABMiller launched an A$11.2 billion ($12 billion) cash bid including debt last month for the Australian brewer, which the Foster’s board immediately rejected.

SABMiller shares were 1.3 percent higher at 2,320 pence by 1320 GMT in a flat London stock market. ($1 = 0.931 Australian dollar)