Bloomberg News

SABMiller Investing $300 Million in Peruvian Brewery

May 18, 2012

SABMiller Plc (SAB), the world’s second- biggest brewer by volume, is investing $300 million in Peru to meet surging beer demand in Latin America’s fastest-growing economy, according to the London-based company’s local unit.

Union de Cervecerias Peruanas Backus y Johnston SAA (BACKUSI1), acquired by SABMiller as part of a 2005 purchase of Bogota-based Grupo Empresarial Bavaria, is upgrading its five Peruvian brewhouses and replacing 600 distribution trucks with natural gas-fueled vehicles to cut costs, Chief Executive Officer Mauricio Leyva said in an interview yesterday from his Lima office. The expansion should be completed next year, he said.

“Growth, consumption and the way our brands have been absorbed have been spectacular,” Leyva said. “We’re seeing new opportunities in new locations and disposable income.”

Peruvian beer consumption per capita has risen to 45 liters (9.9 gallons) from 28 liters in 2006, Leyva said. The beer market is set to grow another 10 percent this year, while gross domestic product expands an estimated 6 percent, he said.

Peru’s economy will grow 5 percent this year, outpacing other major Latin American economies, according to the median estimate of economists in a Bloomberg survey.

SABMiller, the maker of Grolsch and Peroni, controls 93.4 percent of the local market, Leyva said. Backus competes with Anheuser-Busch InBev NV, the world’s biggest brewer, and Peru’s Aje Group.

SABMiller’s London-traded shares fell 2.3 percent to 2,419.5 pence at the close of trading today. Backus dropped 1.2 percent to 8.5 soles at 11:21 a.m. in Lima and gained 46 percent so far this year.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.


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