Brazil: AmBev may increase beer sales due to hot El Nino weather - analyst

Cia. de Bebidas das Americas, Latin America’s biggest brewer, gained the most in four months after Deutsche Bank AG said hotter weather sparked by the El Nino weather pattern will lead people to guzzle more beer, Bloomberg communicated on July, 15.

Brazil’s temperatures will increase as a result of El Nino, leading to drier-than-normal conditions in the northeast and wetter weather in the south, Deutsche’s Latin America equity strategist Guilherme Paiva said.

El Nino weather conditions, which occur about every four to seven years and shift weather patterns around the world, have a “high probability” of occurring in the second half of this year into 2010, Deutsche said, citing meteorological studies.

“Drier and warmer conditions are favorable for beverage consumption,” New York-based Paiva said. The company’s beer sales climbed 11 percent during the last strong El Nino event in 1997, he said.

Ambev, as the Sao Paulo-based unit of Anheuser-Busch InBev NV is known, rose 4.4 percent to 131.79 reais in Sao Paulo trading, the biggest gain since March 23.

Ambev, which makes the Antarctica, Bohemia and Brahma beer brands in Brazil, posted a 32 percent gain in first-quarter profit as sales growth was stoked by hotter and drier weather during the February carnival.

17 July, 2009