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Posted December 2012

Egypt - Government plans tax hike on alcohol

As Egypt prepares for a referendum on a controversial new constitution 15 December 2012, the draft of which was boycotted by most liberals, secularists and Christians in the constituent assembly on 30 November, the news that the government had also drafted a law to raise the sales tax on several commodities, including alcohol, and services to 11 percent from 10 percent, went largely without comment.

Without quoting sources, the Al-Ahram newspaper reported in early November 2012 that the sales tax would rise on goods, such as passenger cars, cigarettes and tobacco, beer and alcoholic drinks, non-alcoholic beer, carbonated mineral water, coffee beans and water-resistant cement.

These tax changes are meant to cut a budget deficit running at about 11 percent of gross domestic product. Before the draft law on a higher sales tax comes into effect, it has to be approved by the president or parliament. No date has been mentioned yet.

It's highly unlikely that there will be a public outcry against the sales tax hike on beer and alcoholic drinks as it will only affect tourists (who can afford it) and small pockets of the Egyptian population that are best advised not to make a fuss over booze in a Muslim country.

But to liberals, secularists and Christians it will serve as an indication how far the Islamist government wants to push its religious agenda. Read on

 

Iraq – Have a beer but mind where you do

When the United States invaded Iraq, it hoped to turn the country into a booming economy fuelled by its oil reserves that are among the largest in the world. Alas, the fighting never stopped and the U.S. vision remained, well, a vision. A year ago, American troops left. But the nation’s leaders are still locked in a political crisis while insurgents launch attacks. Many wonder: where is Iraq headed?

Ironically, the sale of alcohol and beer may provide some pointers. Although Iraq is a mainly Muslim nation, there are several minority groups in Iraq, about 3 percent of the total population of 31 million people, which are tolerant towards alcohol. Often members of these groups will be the ones that run bars or alcohol shops.

The Iraqi media outfit Niqash reports that "in the 1970s and 1980s Iraq did have alcohol fuelled nightlife but Saddam Hussein’s religious campaigns ended this to a great extent in the 1990s. Then, after his regime ended in 2003, there was a small resurgence in alcohol sales but this too was brought to end by the religious nature of Iraqi society." Read on

 

France - Despite protests parliament approves beer excise bill

All protests were in vain: the French parliament on 3 December 2012 approved a bill to hike French beer tax by a massive 160 percent. Despite best efforts by the French Senate, twice sending the law back to the Parliament with a modest amendment to raise excise by only 120 percent – the law was finally passed without further modifications and will come into effect in January 2013.

The measure will hit all brewers and all beers, with only a slightly lower increase for some medium-sized breweries. Equally affected will be brewers exporting to France as one in three beers consumed in France is imported from Belgium, Germany, the Netherlands and the UK. Read on
 

Netherlands - Mexico, Brazil, Poland and Nigeria open new wine frontier, says Rabobank

That's some optimistic extrapolation: if they drink lots of beer, they will eventually drink wine too. No doubt, Mexico, Brazil, Poland and Nigeria sport comparatively high beer consumption rates. But to what extent consumers in these markets can be swayed towards wine remains to be seen.

With maturing or declining sales in many traditional markets, wine companies across the globe are increasingly searching for new growth markets. Emerging markets are attracting the interest of nearly all major wine companies. While China and South Korea probably rank as the most attractive emerging wine markets, Dutch Rabobank, in a recent report, has identified Mexico, Brazil, Poland and Nigeria as four hidden gems that have the potential to become important growth markets. 

As always, it's a case of first come first served, says Rabobank. Early investments to establish a route to market and build brand awareness hold the key to long term growth in these markets. Read on
 

Brazil - Jorge Lemann ranks 37th on Bloomberg's billionaires index

AB-InBev's investor Jorge Paulo Lemann is Brazil's richest man, according to Bloomberg's recent billionaires index. Bloomberg ranks Mr Lemann as the world's 37th most wealthy person based on Bloomberg's 30 November 2012 estimates, which put Mr Lemann's fortune at USD 18.7 billion.

Jokingly referred to as the "envy index", Bloomberg's index, which was launched for the first time earlier this year, takes daily measures of twenty of the world’s wealthiest people based on market and economic changes and Bloomberg News reporting.

Mr Lemann controls AB-InBev, the world's largest beer manufacturer, with two billionaire partners, Marcel Herrmann Telles and Carlos Alberto Sicupira. Through their buyout firm 3G Capital, the trio owns Burger King, the fast food chain they acquired in 2010. They also own retailer Lojas Americanas and real estate developer Sao Carlos.

However, Mr Lemann’s largest asset is his 10 percent stake in AB-InBev, worth more than USD 14.7 billion, says Bloomberg.

 

UK - Brits still prepared to splash out on high-end beers says SABMiller

How they are doing it, no one really knows, but even in hard times British consumers keep on buying high end beers. SABMiller announced on 22 November 2012 that its UK subsidiary, Miller Brands UK, has delivered another strong period of lager volume growth during its first half year ending 30 September 2012.

Against the backdrop of a declining UK beer market (total beer volumes fell by 4.6 percent to the end of September), Miller Brands UK grew volumes by 5 percent in the half with the performance being led by strong sales of Peroni Nastro Azzurro.

Pub groups meanwhile continue to suffer as cash-strapped drinkers migrate to cheaper supermarket deals. But sales of Peroni on tap increased by more than 10 percent as those who still frequent pubs show no qualms about forking out GBP 5.0 (USD 8.0) or more for a pint. Read on

 

UK - SABMiller going strong - except in Australia

Funny it should only occur to hacks now that SABMiller's shares have surged more than 20 percent to GBP 28.1 so far during 2012, making the share one of this year's best performers in the FTSE 100. True, beverage stocks have climbed about 26 percent between 1 January and 30 November 2012. But hey, a share price hike is a share price hike.

Since releasing its interim results for the March to September period on 30 November 2012 it has climbed a few pennies higher, probably buoyed by the fact that in the past six months SABMiller managed to grow group revenue 11 percent to USD 17.5 billion, and pre-tax profit 12 percent to USD 2.3 billion.

Basic earnings per share increased 15 percent to USD 1.0, with the interim dividend raised by 14 percent to USD 0.24 per share.

The results also showed that Australia will continue to give SABMiller a headache. Last year, SABMiller paid AUD10.5 billion (USD 11 billion) for the Foster’s Group. Now SABMiller had to admit that its beer volumes fell 13 percent in Australia, which prompted the company to say that its share of the Australian beer market may not rise until 2014. Read on

 

UK - Will micropubs be the next big thing?

CAMRA, the Campaign for Real Ale, says that Britain’s pub closure rate has increased to 18 per week, with over 450 pubs across the country having been lost since March 2012. This is an increase from 12 per week for the September 2011 to March 2012 period.

But there is hope: there has been a lot of talk recently about a burgeoning micropub movement in the UK. Among the four pubs, which have been shortlisted in CAMRA's 2012 pub of the year competition, there is one micropub, the Conqueror Alehouse in Ramsgate, Kent.

As the name suggests, micropubs are small, sometimes as small as 4 metres x 4 metres, like the Butcher's Arms in the Kentish town of Herne, which was opened by Martyn Hillier in 2005 and today is credited with having been the first micropub. It is really tiny because in its previous life it used to be the village butcher's shop. Other micropubs have taken over former hairdressers or drycleaners. With about ten punters inside, they feel absolutely crowded - to give you an idea. Read on

 

Uzbekistan - Carlsberg said to ponder a sale to exit for good

The Carlsberg Group is reportedly looking for a buyer of its 100 percent subsidiary Carlsberg Uzbekistan. According to local rumour, Carlsberg is conducting negotiations and there are investors wishing to acquire its assets. This being Uzbekistan, the sale could drag on for a while to force Carlsberg to accept a lower price for its brewery with a capacity of one million hl beer.

As reported, Carlsberg Uzbekistan started experiencing serious problems a year ago, when “very important people” became interested in its earnings. After police raids - so I heard - its Russian CEO decided to leave the country. In its full year 2011 financials already, Carlsberg booked impairment losses for its Uzbek subsidiary of DKK 300 million (EUR 40 million).

Things got a lot worse this year. By March, Carlsberg had run out of raw materials and was forced to cease production. It sent its staff on leave until September, with only a few people remaining to maintain the brewery.

Hopefully, Carlsberg has a stash of the local currency left to pay its staff for looking after the brewery or valuable bits and pieces might start wandering off.

Another rumour had it that Carlsberg was considering packing up its brewery to send it to neighbouring Turkmenistan - a mainly Muslim country of 5 million people. Read on

 

Singapore - Kirin in bid to buy F&N's food and beverage unit

Now that Heineken has its acquisition of Asia Pacific Breweries all sewn up, a bidding war for the rest of Fraser & Neave (F&N) is gathering pace. In November the Singaporean conglomerate received a rival offer from a group led by Overseas Union Enterprise Ltd (OUE), which offered USD 10.7 billion for F&N's property and beverages conglomerate.

The OUE group offered SGD 9.08 (USD 7.44) a share, topping the SGD 8.88 (USD 7.27) offer by Charoen Sirivadhanabhakdi, the owner of ThaiBev and brewer of Chang beer.

OUE has enlisted Kirin, Japan’s largest drinks maker and F&N’s second-largest shareholder, in its bid. OUE, which is a Singapore-based property company, would get the company’s property business while Kirin would take the food and beverage unit.

The Japanese brewer, Asia’s biggest beverage maker, will is prepared to pay SGD 2.7 billion (USD 2.2 billion), for F&N’s food and beverage business, according to OUE’s statement.  Read on

 

 

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