Progress on Buyout talks.

Beer baron fuels rumours

The expected arrival of Carlos Brito, the global chief executive of the world’s largest brewer, Anheuser-Busch InBev, in Australia this week has intrigued many in the beverage industry. Apparently the Brazilian-born beer baron is rarely seen in this part of the world, and it has led some to conclude that the reason behind his trip is to meet with executives at Coca-Cola Amatil.

AB InBev is making moves to divest assets globally on the back of its $146 billion merger deal with SABMiller.
It comes at a time that discussion centres on SAB’s intentions for Corona, which has come under the spotlight of the competition watchdog on the back of the merger deal. SABMiller and Coca-Cola Amatil previously had a joint venture arrangement, which was pulled apart when SAB purchased Foster’s several years ago.
But Coca-Cola Amatil wants to wade further into the alcoholic beverages market on the back of declining consumption of soft drinks, and it is thought the company would be keen to buy the distribution rights of Corona beer from the newly merged entity.
But the big question is whether SABMiller/AB InBev will want to sell to one of its largest rivals. SAB has strong ties with Coke internationally with respect to bottling arrangements, particularly in South America.
Some in the market believe Coke could be working with Luminis Partners as an adviser. The company has previously called on the services of Simon Mordant and his team when they were working under the Greenhill Caliburn banner, although Luminis yesterday did not confirm the appointment.
Late last year the recently merged global AB InBev/SAB beer giant is understood to have made initial efforts to sell its $10bn-odd Foster’s Australian beer business to the Japanese company Asahi before weighing a possible spin-off via an initial public offering.
But a divestment of the local operation is now seen as less likely.
The Australian Competition and Consumer Commission’s recently launched investigation into the AB InBev-SABMiller merger was on the back of concerns that included its rights to distribute Corona, the country’s fourth biggest selling beer, and the overall impact of the deal on Australia’s $10bn beer industry.
AB InBev has no direct market share in Australia, but some of its beers such as Corona, Stella Artois and Budweiser are sold here via third-party distributors, and the takeover of SABMiller will maintain its slot as the second-biggest brewer in Australia with a 39 per cent market share.