AB InBev's christening
Following the acquisition of SABMiller by the world's largest beer producer, AB InBev is confident about long-term growth.
October 2015 may not have been the best time for the world's largest beer group to launch a take-over bid for the second-largest beer producer, SABMiller. But if AB InBev is suffering any buyer's remorse, its frontman in Africa is keeping it well hidden.
Brazilian-born Ricardo Tadeu (40) says he and his company are very happy they took the leap into Africa.
“We're confident about the mid- to long-term perspective,” said Tadeu, who arrived in SA in October 2016. “Of course we didn't expect volumes in Africa to drop, but that doesn't change our confidence in the region.”
It helps that Tadeu and the 3G Capital team behind the 30-year project to create the largest beer group the world has ever seen are all from Brazil, a country that competes with South Africa in the political turmoil scales.
“Political uncertainty is what we know. On a 20-to 30-year perspective, Africa is where the opportunities lie,” said Tadeu.
What the AB InBev management team, and the rest of the world, are far less familiar with is the level of political uncertainty in previously stable countries. The United States, the European Union and Britain are all looking a little less familiar now than they were 15 months ago.
The drama around the unexpected outcome of the Brexit vote in June 2016 added several billion dollars to the already steep cost of the SABMiller purchase because of a decision to hedge against possible weakness in the dollar while the deal was being finalised.
All of this adds to the challenge facing AB InBev management as it tries to repeat the same sort of performance notched up after every acquisition since Brahma in 1989. The most spectacular performance was achieved following InBev's acquisition of Anheuser-Busch in 2008.
Word is that SABMiller suppliers are already feeling the chill winds of change caused by this challenge. Certainly, SABMiller did not have a reputation as an easy customer. With a virtual monopoly in the beer market it was able to dictate terms to most of its suppliers. Now word from some is that those terms are about to be made even tougher. Those who can't manage are apparently being offered access to finance from an international bank.
But it looks as though talk of 150-day terms has more to do with AB InBev's tough-as-nails reputation than reality.
Tadeu says while the group's scale gives it the opportunity to negotiate favourable payment terms, only a small percentage is on more than 120 days.
The new head of AB InBev Africa says the opportunity to supply the group does provide companies with an ability to scale up, and some are prepared to concede payment delays for large orders.
“But we're not here to destroy businesses; we're building something in South Africa,” said Tadeu, adding that as part of the agreement with the competition authorities, AB InBev is helping to develop small suppliers.
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Brazilian-born Ricardo Tadeu (40) says he and his company are very happy they took the leap into Africa.
“We're confident about the mid- to long-term perspective,” said Tadeu, who arrived in SA in October 2016. “Of course we didn't expect volumes in Africa to drop, but that doesn't change our confidence in the region.”
It helps that Tadeu and the 3G Capital team behind the 30-year project to create the largest beer group the world has ever seen are all from Brazil, a country that competes with South Africa in the political turmoil scales.
“Political uncertainty is what we know. On a 20-to 30-year perspective, Africa is where the opportunities lie,” said Tadeu.
What the AB InBev management team, and the rest of the world, are far less familiar with is the level of political uncertainty in previously stable countries. The United States, the European Union and Britain are all looking a little less familiar now than they were 15 months ago.
The drama around the unexpected outcome of the Brexit vote in June 2016 added several billion dollars to the already steep cost of the SABMiller purchase because of a decision to hedge against possible weakness in the dollar while the deal was being finalised.
All of this adds to the challenge facing AB InBev management as it tries to repeat the same sort of performance notched up after every acquisition since Brahma in 1989. The most spectacular performance was achieved following InBev's acquisition of Anheuser-Busch in 2008.
Word is that SABMiller suppliers are already feeling the chill winds of change caused by this challenge. Certainly, SABMiller did not have a reputation as an easy customer. With a virtual monopoly in the beer market it was able to dictate terms to most of its suppliers. Now word from some is that those terms are about to be made even tougher. Those who can't manage are apparently being offered access to finance from an international bank.
But it looks as though talk of 150-day terms has more to do with AB InBev's tough-as-nails reputation than reality.
Tadeu says while the group's scale gives it the opportunity to negotiate favourable payment terms, only a small percentage is on more than 120 days.
The new head of AB InBev Africa says the opportunity to supply the group does provide companies with an ability to scale up, and some are prepared to concede payment delays for large orders.
“But we're not here to destroy businesses; we're building something in South Africa,” said Tadeu, adding that as part of the agreement with the competition authorities, AB InBev is helping to develop small suppliers.
FINANCIAL MAIL
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