RED BULL FACES COMPETITION

Rival Carabao makes aggressive move in China following a distribution deal

THERE’S another energy drink pouring out massive wealth in Thailand. Sathien Setthasit, chairman and chief executive officer of Red Bull challenger Carabao Group Pcl, has become a billionaire after the company’s shares rose 38 per cent this year and lifted his net worth to US$1.1 billion (RM4.65 billion), according to the Bloomberg Billionaires Index.

The surge has also boosted the fortunes of multi-millionaire shareholders Nutchamai Thanombooncharoen, the group’s managing director, and Yuengyong Opakul, lead singer of the Thai rock band that inspired the company’s name.

Carabao had revenue of 9.97 billion baht (RM1.27 billion)last year compared with US$6.9 billion for Red Bull. Both drinks have origin stories in Thailand, where Carabao outsells Red Bull. Enthusiasm for Carabao has grown along with its move into China, where Red Bull captured 80 per cent of energy drink sales by retail value last year, according to Euromonitor.

Global consumption of energy drinks is booming, producing a new crop of billionaires despite warnings from the World Health Organisation that the product is a health concern for young people. Red Bull has created 12 billionaires, including Austrian marketing guru Dietrich Mateschitz, and the 11 Thai heirs of his late partner, Chaleo Yoovidhya.

Sathien stepped up sales of Carabao Energy Drink, famous for its water buffalo logo, to China this year after he reached a distribution deal with local partners. The company reported in its second-quarter results that China, representing 16 per cent of total sales, had passed Cambodia as its leading market outside of Thailand.

Sathien sees an opening as Red Bull becomes the centre of a dispute between its Thai owners and a China-born tycoon over rights to produce and distribute in China after a 20-year licensing deal expired.

Thailand remains the world’s most advanced energy drink market, where workers can be seen pounding cans of Carabao, Red Bull or M-150 drinks. The country’s per capita consumption is the highest in the developing world, but China could be a sleeping giant, with sales expected to grow 60 per cent by 2021 to US$11 billion, according to Euromonitor. Bloomberg

BLOOMBERG PIC Red Bull captured 80 per cent of energy drink sales by retail value in China last year, but lost the crown to local rival Carabao which posted higher revenue last year.