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Malaysia: It would be difficult for Guinness Anchor Berhad this year to repeat the strong financial performance posted last financial year (FY) ending June 30, 2004, its chairman Tan Sri Saw Huat Lye said. Guinness Anchor Bhd expects a bleak outlook for the duty-paid malt liquor market following the imposition of high excise duty on beer in late September, The Edge Daily revealed in a statement on December 1.

“We are bracing ourselves for a difficult year ahead. We are not too optimistic of the prospects and outlook. The inevitable increase in the retail price will have a significant impact on sales volume. Beer and stout have been hit hard in Budget 2005 compared with hard liquor and wine, which have relatively lower excise duty increase despite a higher alcohol content,” he told a press conference after the company’s AGM in Subang on Dec 1.

Guinness Anchor’s net profit for FY2004 rose 26% to RM98.42 million from RM78.01 million a year before while revenue was RM886.21 million — an 11% increase from RM796.60 million previously. For the first quarter to Sept 30, 2004, Guinness Anchor’s net profit surged by 39% to RM29.31 million from RM21.13 million, while revenue improved to RM282.41 million from RM241.24 million.

The better turnover and earnings were a result of higher sales volume. Guinness Anchor’s three key brands — Guinness Stout, Tiger Beer and Heineken — enjoy some 50% market share in the local beer and stout segment. However, Saw said 1Q results were not reflective of the prospects of the company for the rest of the year. “It was not the norm but an exception. The higher sales volume was pre-Budget prospective buying on speculation of likely increase in excise duty,” he said.

He added that Guinness Anchor had noticed a decline in sales for November. “The real test will be Chinese New Year; we will know by then if the market can absorb the price increase,” he said.

Guinness Anchor managing director Theo de Rond said it had taken various cost-cutting and modernisation measures at its brewery over the past few years to improve its efficiency. He said although Guinness Anchor was surprised by the government’s move to impose higher excise duty on locally brewed alcoholic beverages compared with imported brands, it would continue to strengthen its brand name.

He urged the government to improve its law enforcement to curb smuggling, which he said was hurting the beer and stout manufacturers.

“One shareholder told us that he saw various types of imported beer priced at between RM2.50 and RM3.40 per can in the supermarket. This doesn’t make sense considering that the excise duty is RM4.25 per can and it is selling at a loss of 40%,” he said.

Guinness Anchor Berhad is listed on the main board (Consumer Products) of the Kuala Lumpur Stock Exchange. It evolved from the merger between Guinness Malaysia Berhad and Malayan Breweries (Malaya) Sdn Bhd, whose parent companies were Guinness Overseas Ltd and Malayan Breweries Ltd respectively. Guinness' origin dates back to 1759, when Arthur Guinness and Sons PLC was established. Now known as Diageo PLC, it is the world's leading premium drinks business with an outstanding collection of brands across spirits, wine and beer categories. Guinness Overseas Ltd was formed in the 1960s to expand Diageo PLC's brewing interests in markets outside Ireland and the UK. Malayan Breweries Ltd (now known as Asia Pacific Breweries Ltd) was established in 1930. Its major shareholder is Asia Pacific Investment Pte Ltd, a 50-50 joint venture between Fraser & Neave Ltd and the Heineken Group. Guinness Malaysia Bhd was listed on the stock exchanges in Malaysia and Singapore in 1965, the same year Sungei Way Brewery was opened. Malayan Breweries (Malaya) Sdn Bhd was incorporated in 1959 and opened its Sungei Besi Brewery in 1962. This merger in 1989 saw the birth of a new Joint Venture Company, GAPL Pte Ltd, which is the holding company of Guinness Anchor Berhad. Guinness Anchor Berhad now operates from the Sungei Way Brewery.


04 December, 2004