Mexico & Brazil: Grupo Modelo seeking to enter Brazil in the short term

Mexico’s largest beer maker Grupo Modelo SAB may begin in about a year exports of Corona to Brazil, Latin America’s biggest beer market that’s dominated by Modelo’s partner, AB InBev NV, Bloomberg reported on November, 8.

The brewer is seeking an “established channel” to sell Corona in Brazil, where there are few imports and the company has tried three times to penetrate, said Jose Pares, Modelo’s chief sales and marketing officer.

“We’re doing the analysis, and the idea is in the short term to enter Brazil,” Pares said.

Brazil is the third-largest beer market behind China and the U.S., with a growth rate that exceeded both in 2009, Modelo Chief Executive Officer Carlos Fernandez said in a Nov. 5 presentation at the company’s new factory near the border city of Piedras Negras, Mexico.

Brazil’s beer market has the second- highest operating margin behind the U.S., he said.

In earlier attempts, Modelo grappled with taxes, tariffs and other obstacles, Pares said. The brand has good acceptance and is imported informally by consumers, he said.

“Now, we see a more favourable environment for the possible development of our market there,” he said without specifying. “That’s why we’re doing an analysis of an established channel through which to develop the brand.”

InBev became owner of a non-controlling 50 percent stake in Modelo after the $52 billion purchase of Anheuser-Busch Cos. in 2008. Modelo tried to block AB InBev from becoming its partner in a failed arbitration proceeding. AB InBev’s local unit, Cia de Bebidas das Americas, has a 71 percent share of the Brazilian beer market.

Modelo, which is based in Mexico City, exports six of its 13 brands, including Modelo Especial, Negra Modelo and Pacifico, to 167 countries and is the largest importer into the U.S.

08 November, 2010