Africa the new fron­tier for AB InBev

The Star Early Edition - - BUSINESS REPORT - Tawanda Karombo

AFRICA will be the new fron­tier for An­heuser-Busch InBev (AB InBev), which re­cently con­cluded a merger deal with SABMiller and ex­ec­u­tives at the com­pany reckon that fo­cused in­vest­ment on mar­kets such as South Africa, Zim­babwe, Zam­bia and oth­ers will boost eco­nomic growth and op­por­tu­ni­ties for farm­ers.

The com­pany has for­ayed into Africa at a time of dif­fi­cul­ties for some of the re­gion’s economies, with growth ex­pected to con­tinue to be muz­zled for the next few years, ac­cord­ing to some econ­o­mists.

Di­rina Mançel­lari, a se­nior econ­o­mist at Fo­cusE­co­nomics, says growth in sub-Sa­ha­ran Africa will “re­main sub­dued (for this year) on the back of eco­nomic and po­lit­i­cal chal­lenges across the re­gion” as well as lack of much-needed struc­tural re­forms.

“Eco­nomic progress will de­pend to a sig­nif­i­cant ex­tent on how fast govern­ments can im­ple­ment re­forms aimed at pro­mot­ing growth, re-es­tab­lish­ing macroe­co­nomic sta­bil­ity and en­hanc­ing trade links within the re­gion,”

But rid­ing on SABMiller’s ex­pe­ri­ence on the con­ti­nent, AB InBev – the big­gest brewer in the world – has set its im­me­di­ate sights on un­der­stand­ing the African mar­kets and boost­ing growth.

Al­though Robyn Chalmers, a communications di­rec­tor for AB InBev African op­er­a­tions, reck­ons that it is “too early to com­ment on in­vest­ments in spe­cific mar­kets,” the com­pany is “com­mit­ted to ac­cel­er­at­ing growth across” the value chain, from re­tail­ers to grow­ers.

At­trac­tive

“The long-term out­look for Africa is hugely at­trac­tive: mar­kets with in­creas­ing gross do­mes­tic prod­ucts, a grow­ing mid­dle class and ex­pand­ing eco­nomic op­por­tu­ni­ties,” Chalmers said.

Africa had been a strong mar­ket for SABMiller be­fore its amal­ga­ma­tion into AB InBev and av­er­age beer sales vol­umes have been around 50 mil­lion hec­tolitres. South Africa, a ma­ture beer mar­ket, makes a big con­tri­bu­tion to this, said Chalmers.

AB InBev geared up to cre­ate a giant brew­ery com­pany that will grow its top line and bring in new in­vest­ments. But its ef­forts will likely be dented by fears that it will in­sti­tute re­trench­ments in some of the African mar­kets that it gained ex­po­sure af­ter merg­ing with SABMiller.

In some of the mar­kets, AB InBev has been given the nod for its merger deal with SABMiller units on the un­der­stand­ing that grow­ers will con­tinue to be sup­ported and that the com­pany will not in­sti­tute re­trench­ments.

Sub­sidiary com­pa­nies such as Delta Cor­po­ra­tion in Zim­babwe ini­tially said there would be no sig­nif­i­cant im­pact to op­er­a­tions from the merger deal.

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