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Postobon to Challenge SABMiller in Colombia

Published on Nov 11 2014 9:08 PM in Drinks

Postobon to Challenge SABMiller in Colombia

Postobon SA, the soft-drinks maker controlled by billionaire Carlos Ardila Lulle, will join Chile’s biggest brewer to start selling beer in Colombia, where SABMiller Plc is currently the only major producer.

 

Postobon and Cia. Cervecerias Unidas SA will contribute $400 million to a joint venture called Central Cervecera de Colombia, according to an e-mailed statement from the companies yesterday. They plan to build a factory near Bogota with an initial capacity of 3 million hectolitres per year, according to the statement, equivalent to about 15 per cent of the current beer market.

Closely-held 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 statement.

Bavaria, SABMiller’s Colombia unit, controls about 98 per cent of the country’s beer sales, making the Andean nation the brewer’s biggest source of revenue after South Africa. In a February interview, Bavaria President Grant Harries said the company’s regional breweries would give it a big competitive advantage over new entrants in a large, mountainous country with high transport costs.

Postobon, Colombia’s biggest soda maker, is seeking to expand beyond its traditional core business, using its distribution network to sell other products, according to the press release. The company produces sweet, brightly-coloured fruit-flavoured drinks.

Brands

SABMiller, which sells beer in Colombia under its Poker, Costena, Aguila, Pilsen and Club Colombia brands, declined to comment. The London-based company is the world’s biggest brewer after Anheuser-Busch InBev NV.

Ardila Lulle’s $3.8 billion fortune makes him the nation’s third-wealthiest person, according to Bloomberg’s ranking, while the family of the second-richest Colombian, Alejandro Santo Domingo, has a 14 per cent stake in SABMiller.

For decades, the families competed for control of Colombia’s drinks, aviation and media markets. In the 1990s, they broke a truce not to tread on each other’s core businesses, with Santo Domingo’s father moving into soft drinks and Ardila Lulle opening a brewery. Ardila Lulle eventually sold his beer factory to the Santo Domingos.

The Luksic family, Chile’s richest, and Heineken have 50 per cent each of the holding company that owns a majority stake in CCU. The company is the largest brewer in Chile, with brands such as Cristal, Escudo and Heineken, and the second largest in Argentina, where it has the license for brands such as Schneider, Corona, Heineken and Budweiser.

Bloomberg News, edited by Hospitality Ireland

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