SABMiller under threat in South America

A new pairing of soft drinks producer Postobon and Chile’s largest brewery, Cia Cervecerias Unidas SA (CCU), is set to take on the Colombian beer market currently dominated by SABMiller.

SABMiller is the world’s second biggest beer brewer, and practically owns the entire Colombian market (Photo: Ed Robinson/OneRedEye)

The two companies will put $400 million (£252m) to a joint venture called Central Cervecera de Colombia, according to the CCU website.

The company plans to build a factory near the capital Bogota with an initial capacity of 3 million hectoliters per year – equivalent to about 15% of the current beer market in the country.

Postobon has “a profound knowledge of the local market, a long record of creating brands and an ample distribution network in Colombia,” CCU chief executive officer Patricio Jottar said in the announcement.

The first phase of the new operation will be the creation of a top-level executive staff and the import and distribution of Heineken into the Colombian market.

Bavaria, SABMiller’s Colombian arm, controls about 98% of the country’s beer sales, making the country the brewer’s biggest source of revenue after South Africa.

Postobon, Colombia’s biggest soft drinks maker, is seeking to expand beyond its traditional core business, using its distribution network to sell other products. Its owner Ardila Lulle boats a $3.8 billion (£2.4bn) fortune that makes him the nation’s third-wealthiest person, according to Bloomberg rankings.

SABMiller, which sells beer in Colombia under its Poker, Costena, Aguila, Pilsen and Club Colombia brands is the world’s biggest brewer after AB InBev.

The company recently posted mixed financial results, announcing a 5% rise in revenue but a 1% drop in volume sales.