SABMiller and Heineken

thirsty for

FEMSA beer

News of SABMiller’s and Heineken’s interest

in FEMSA’s beer business spread.

FEMSA, a leading Latin American beverage group and Coca-Cola’s second bottling company in the world, also holds a portfolio of 35 beer brands that are produced in 14 plants distributed in Mexico and Brazil.

With over 110 years in operation, the brewery Cervecería Cuauhtemoc Moctezuma, owned by the FEMSA Group, is the second brewery in Mexico, after the Modelo Group (producer of Corona beer), which was founded in 1925 and is the top brewer and beer distributor and seller in the country.

In 2006, FEMSA bought the Brazil’s Kaiser. Sales of Sol, its flagship product in Brazil, never took off, remaining under one percent of the sector’s market. Last August, combined sales for FEMSA’s three leading beer brands in Brazil - Kaiser, Sol, and Bavária - had the lowest share of the market since the group began operating in Brazil. From January to August 2009, their share dropped from 8.2 percent to 6.9 percent, compared to  Schincariol’s 12.1 percent and AmBev’s 69.2 percent.

One of the companies now showing an interest in FEMSA’s beer business is SABMiller, the world’s second transnational corporation in the brewery sector. According to Wall Street analysts, the acquisition is valued at 9 billion dollars. The purchase would enable SABMiller to gain a strong foothold in the Mexican market, effectively competing with InBev, which already controls 50 percent of the Modelo Group.

The other transnational corporation with an interest in purchasing FEMSA’s beer business is the Dutch company Heineken, which already distributes the group’s Tecate and Dos Equis brands in the United States (with a contract that expires in 2017), and together with FEMSA is one of the two Kaiser shareholders, with FEMSA holding 83 percent, and Heineken the remaining 17 percent.

Beer oligopolies

Arrogance bubbles, as employment goes flat

A handful of transnational corporations dominate beer production worldwide. InBev, SABMiller, Heineken and Carlsberg produce and sell six out of ten beers in the world.

From 2000 to January 2008, when Carlsberg and Heineken purchased Scottish & Newcastle, the combined acquisitions of the brewery giants totaled 52.7 billion dollars. Large sum? Very large. That sum is enough to purchase facilities to supply potable water and sanitation at low costs for 1.2 billion people, among other things.

With each acquisition and after every merger thousands of workers are left without a job. Similarly, as they up their share of the global market, transnational corporations heighten their arrogance and antiunion practices, behaviors that SABMiller, in particular, seems to have mastered.