The takeover of a Ukranian brewer by SABMiller has been described as a “deal it couldn't afford not to make”.
Last week SAB revealed it had acquired a 99.84% stake in CJSC Sarmat for an undisclosed sum.
However, according to Bruce Davidson, an analyst with Blue Oar Securities, the brewing giant – which produces Peroni Nastro Azzurro – had been unusually slow in breaking into the Ukranian market.
The Ukraine is one of the fastest growing beer markets in the world, with a four-year growth rate to 2006 of 14% per annum.
On top of that the country also has growth forecasts that exceed that of any other major Central and Eastern European market.
Analyst Davidson told M&C Report: “SABMiller simply had to be there. It was a deal it couldn't afford not to make. Strangely for them though they have bought the fourth largest player over there.
“That is because they were slightly later to the table in terms of recognising it as a market. They will have to use all their marketing skills and their brands to succeed over there.
“Strategically it is very important for brewers to have a presence in the Ukraine. There has been a big land grab in recent years of new markets for the brewers. And SABMiller have been at the forefront of this movement – they have a very big presence in China and in Latin America.”
SABMiller – the world's second biggest brewer – operates in the Chinese marketplace through its 49% stake in China Resources Snow Breweries (CR Snow).
The Chinese brewing industry is growing at a rate of 13% per year, helped by the country's fast-growing economy and greater urbanisation in its eastern cities.
In 2005 it moved ahead of the US to become the world's biggest beer market, with annual consumption of 300 million hectolitres.
According to Davidson one of the biggest challenges lying ahead for big Western breweries is finding emerging beer markets.
He said: “It's all about finding out what is available and who wants to sell. I think it is a question of availability.
“And the big players like SABMiller will get in there if there is an opportunity. However in the case of the Ukraine they were a little slow off the mark – but that won't prevent them from doing a good job.”
The analyst also pin-pointed the Philippines and the brewer San Miguel as another potential market for Western-based brewers.
