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Delhaize Acquires Four More Supermarkets (Emerging Europe Food and Drink Insight)

Wed, 08 Jul 2009 00:00 GMT

Belgium-based mass grocery retailer (MGR) Delhaize's main Romanian subsidiary Mega Image has completed the acquisition of four supermarkets from domestic company Prodas Holding as it continues to expand its supermarket-geared business. Although BMI is pessimistic about the supermarket segment's near-term outlook - we expect flat industry-wide sales in 2009 as value conscious consumers continue down-trading to discounters - we see significant long-term upside. Through to 2013, we forecast supermarket sales to increase by 50% and reach US$12.1bn, which is strong evidence that despite significant multinational investment into the MGR industry, major expansion opportunities remain.

Broilers Group Finds Success In Ethanol (Americas Food and Drink Insight)

Wed, 08 Jul 2009 00:00 GMT

Jamaica's largest poultry producer Jamaica Broilers Group (JBG) has reported a year-on-year increase in revenues and net profits for its latest financial year ending May 2. Over the period revenues increased by 20% to come in at JMD24.6bn (US$0.27bn) while net profits rose by 12% to reach JMD828mn (US$9.1mn). However, these headline figures masked a set of mixed results, with JBG's new ethanol operations performing well but earnings at the poultry division

Dutch Brewer Permitted To Use Bavaria Name (Western Europe Food and Drink Insight)

Wed, 08 Jul 2009 00:00 GMT

The European Court of Justice, Europe's highest court, has ruled that Dutch-based brewer Bavaria should be allowed to continue using the Bavaria name in the Italian market, despite a law which gives brewers based in the German region of Bavaria, exclusive rights to the name. The move is seen as a compromise, with other brewers from outside of the Bavarian region not able to use the name, but the trademark rights of Bavaria, which first used the name in 1925 and trademarked it in several countries in 1947, also

Fonterra Eyeing GCC Growth (Middle East & Africa Food and Drink Insight)

Wed, 08 Jul 2009 00:00 GMT

Global dairy giant Fonterra has announced that it expects the Middle East region (specifically the affluent Gulf Co-operation Council (GCC) area) to be one of its key long-term growth engines. Based out of New Zealand, Fonterra has reported double digit turnover growth in the region over the last three years. In our opinion, the spending power of GCC consumers, their relative price-insensitivity and the region-wide high consumption of dairy products make the region an idle international growth market and hub for sales to the wider Middle East and North Africa regions.

Bemis Buys Rio Tinto Packaging Business (Americas Food and Drink Insight)

Tue, 07 Jul 2009 00:00 GMT

US packaging company Bemis has reached an agreement with global mining giant Rio Tinto to buy the latter's Alcan Food Americas division for US$1.2bn. The unit generated sales of US$1.5bn in 2008 and includes 23 packaging facilities in the US, Canada, Mexico, Brazil, Argentina and New Zealand. The move will boost Bemis's annual net sales by around 40% and will mean that Bemis derives 70% of its sales from the food sector. This is up from 57% at present and the firm has suggested that this is a positive given the resilience of food packaging at a time when other

COFCO And Hopu In 20% Mengniu Purchase (Asia Pacific Food and Drink Insight)

Tue, 07 Jul 2009 00:00 GMT

As it continues its efforts to bounce back from 2008's damaging melamine scandal, Chinese dairy major Mengniu Dairy has announced the sale of a 20% stake in its business to state-owned food giant China National Cereals, Oils & Foodstuffs Import & Export Corp (COFCO) and investment fund Hopu Investment Management. The HKD6.12bn (US$789.7mn) deal will dramatically lift Mengniu's investment capabilities and enable the company to play a major role in the modernisation and consolidation that has stemmed from the disaster of

Government Report Thrusts FDI Debate Back Into Spotlight (Asia Pacific Food and Drink Insight)

Tue, 07 Jul 2009 00:00 GMT

The 2008-2009 Economic Survey, published by India's finance ministry, has called for deregulation of the country's retail industry (among others) as a means for accelerating modernisation and further stimulating economic growth. A well-trodden debate, BMI summarises the major pros and cons of the argument and assesses the likely

Afri Tea and Coffee Blenders Aiming To Boost Exports Despite Downturn (Middle East & Africa Food and Drink Insight)

Tue, 07 Jul 2009 00:00 GMT

Having traditionally played second fiddle to neighbouring Kenya's renowned tea industry, Tanzania's leading tea processor Afri Tea and Coffee Blenders Limited (ATCBL) is implementing measures aimed at broadening its export markets and providing a stiffer challenge to Kenya's leading tea companies. While the lucrative export market will probably be ATCBL's main focus, domestic consumption should also benefit from BMI's forecast that through to 2018, Tanzania's GDP per capita will increase by almost 180% and reach close to

Magnit Eyeing Cash From Second LSE Share Offering (Emerging Europe Food and Drink Insight)

Tue, 07 Jul 2009 00:00 GMT

Leading Russian mass grocery retailer (MGR) Magnit is scheduled for a secondary share offering later in 2009 across bourses in both Moscow and London according to Russia-based newspaper Kommersant. The retailer is believed to be aiming to raise around US$300mn (RUB9.4bn) by selling a 10% stake. Magnit is trying to leverage the near-term solidity of its business and its promising long-term outlook to attract investment and capitalise on a degree of risk appetite returning since March 2009 across many of the world's main equity markets. As a largely discount-geared retailer and the country's largest retailer by store presence (close to

Diageo Plans To Consolidate Scotch Facilities (Western Europe Food and Drink Insight)

Tue, 07 Jul 2009 00:00 GMT

Drinks giant Diageo has announced plans to cut more than 10% of its workforce in Scotland as part of a restructuring programme designed to 'ensure the long-term sustainability of its operations in Scotland in the current economic conditions'. The plans include the closure of a packaging plant in Ayrshire with the loss of 700 jobs and the closure of a distillery and cooperage in Glasgow resulting in the loss of 140 jobs. To offset the reduced capacity a packaging plant in Leven will be expanded, which the firm has suggested could create up to 400

PepsiCo And Pepsi Bottling Group In US$1bn Investment Drive (Emerging Europe Food and Drink Insight)

Mon, 06 Jul 2009 00:00 GMT

PepsiCo and The Pepsi Bottling Group (PBG), the largest bottler of PepsiCo products, have announced plans to invest US$1bn in Russia over the next three years. With an emphasis on investing heavily in emerging markets, the duo are aiming to reduce their reliance on the North American region. BMI agrees with their decision to markedly increase their exposure to the Russian market, which in our view has significant upside potential. Through to 2013, we have forecast soft drinks value sales to increase by 26.8% and reach

Constellation Posts Resilient Results (Americas Food and Drink Insight)

Mon, 06 Jul 2009 00:00 GMT

US wine giant Constellation Brands has reported a drop in sales and profits for its fiscal first quarter, ending May 31. Over the period revenues were down by 15% on a comparable basis to US$791.6mn while operating income decreased by 6% to US$123mn. However, this fall was largely due to exchange rate fluctuations and organic net sales increased by 1% on a constant currency basis. This result came as something of a surprise, given the weakness of the global wine market since the start of the economic downturn, and helped boost Constellation's share price by 7.3% on the day the

Spanish Downturn May See Les Mousquetaires Bite The Bullet (Western Europe Food and Drink Insight)

Mon, 06 Jul 2009 00:00 GMT

A report in the Spanish newspaper Expansión has suggested that French retail group Les Mousquetaires, which owns the Intermarché supermarket network, is planning to exit the Spanish market. The report, which has not yet been confirmed, suggests that local operator Bon Preu has been lined up as a buyer for the firm's 53 outlets. The move would be indicative of the current difficulties surrounding the Spanish retail market which, up until recently, was among the most dynamic in Western

Delta To Invest US$150mn To Boost Output As Economy Begins Recovery (Middle East & Africa Food and Drink Insight)

Mon, 06 Jul 2009 00:00 GMT

As Zimbabwe's economy starts to recover from a debilitating decade-long plunge after shifting to a US dollar- and South African rand-based economy, Delta Corporation, the country's leading brewer and soft drinks producer, has announced its intention to invest US$150mn to dramatically increase its production capacity by 2014. Counting on the brewing giant SABMiller (36%) and UK-based Old Mutual (28%) as its main shareholders, Delta has a market share in excess of 90% and 85% in beer and soft drinks according to Zimbabwe-based newspaper The Herald. Based on the popularity of beer in particular, the brewer's established brand equity and our

Nestlé Gets Ice Cream Go-Ahead (Asia Pacific Food and Drink Insight)

Fri, 03 Jul 2009 00:00 GMT

The Australia Competition and Consumer Commission (ACCC) has approved Swiss food giant Nestlé's acquisition of some of Fonterra's ice cream assets as the New Zealand firm tries to restructure. Despite Australia boasting a consolidated ice cream industry, the ACCC has determined that the deal will have minimal impact on overall market share in the