South Africa: AB InBev may consider local production in the future - analyst

Brewing giant AB InBev, which listed on the JSE on January 15, could in future consider local production of some of its brands to make them accessible in the South African market, according to Chris Gilmour, an analyst at Absa Asset Management: Private Clients, quoted as saying by AllAfrica.

AB InBev has made an offer to acquire SABMiller for approximately £68 bln in one of the largest deals of all time. While AB InBev is the world's largest beer maker, its brands - which include Stella Artois, Budweiser and Corona - are not well known in South Africa. Most South Africans got to know Budweiser during the 2010 Fifa World Cup as Budweiser was a sponsor.

Speaking after AB InBev's listing on the JSE, Gilmour said the company could make its brands accessible through local production. "Instead of cutting jobs, the deal could create more jobs," he said.

Local production could also reduce the price of the beer brands currently selling at a premium in the local market, he said.

In his brief address during the listing ceremony, AB InBev CEO Carlos Brito said the listing was a demonstration of the company's commitment to South Africa and Africa that he said was central to the rationale of AB InBev's acquisition of SABMiller.

"Indeed this listing is a vote of confidence in South Africa and Africa. They could have waited until the deal is consummated, which is likely to be in the second half of the year. There are still a number of regulatory hurdles," Gilmour said.

"But they decided to list so that people can get accustomed to who they are. A number of South Africans do not know the company. I am not only talking about the corporate profile... its brands too," Gilmour said.

20 January, 2016