March 2 (Bloomberg) -- SABMiller Plc may sell 12 million more units of beer at this year’s soccer World Cup if it capitalizes on the decision by Anheuser-Busch InBev NV not to sell Budweiser at fan parks in the nine host cities.
SABMiller, which dominates South Africa’s beer industry, began talks with FIFA after Anheuser-Busch said in January it wouldn’t supply the parks. SABMiller needs to conclude talks within about 10 days so that it can organize the transport and additional brewing capacity, Alastair Hewitt, the head of SABMiller’s World Cup strategy, said in an interview in Johannesburg yesterday.
Ten fan parks with giant screens and bars to cater for fans unable to get tickets for games at the world’s most watched sport event are planned. The venues have been built to cater for a combined 280,000 people a day during the tournament, which begins on June 11, according to FIFA. Anheuser-Busch said in January that it would concentrate on selling beer in stadiums.
“The stadium value is quite small in comparison to what happens outside the stadiums,” Hewitt said. “It’s a good opportunity.”
The parks may account for 40 percent of the 100,000 extra hectoliters of beer SABMiller expects to sell during and around the monthlong tournament, Hewitt said. That’s equivalent to 8 million half-liter (1.1 pint) glasses of beer or 12 million 340 milliliter cans of the beverage. Hewitt declined to give the terms of the possible agreement with FIFA.
Brandhouse
The only other brewer with a large brewing plant in South Africa is Brandhouse, a venture whose owners include Amsterdam- based Heineken NV and London-based Diageo Plc. Brandhouse isn’t in talks with FIFA over the parks, Priscilla Singh, a spokeswoman for the venture, said in a telephone interview from Cape Town.
Delia Fischer, a FIFA spokeswoman, didn’t immediately respond to e-mailed questions after requesting them when called by Bloomberg. Michael Torres, a spokesman for Anheuser-Busch, said by e-mail that his company decided “more than a decade ago to focus our beer presences in-stadium” during FIFA World Cup matches.
“Just like our successful involvement with FIFA World Cup over the last two decades, as well as last year’s FIFA games, we look forward to once again having the opportunity to satisfy the tens of thousands of attending fans,” he said
The Johannesburg-based Mail & Guardian newspaper reported in January that Anheuser-Busch didn’t have the capacity to meet demand as it has no infrastructure in South Africa, citing unidentified people in the industry. Torres said yesterday that Budweiser had not been a participant of “Fan Fest” activities in previous tournaments.
Unbranded Beer
SABMiller is willing to sell unbranded beer at the parks “to make the event a success,” Hewitt said. Demand for beer over the five-week World Cup period is expected to increase by between 4 percent and 6 percent, according to SABMiller.
To meet the expected rise in demand during the tournament, which is expected to attract 450,000 visitors to South Africa, SABMiller will delay maintenance at its plants in the country and increase brewing ahead of the tournament, he said. Marketing staff won’t take vacation during the tournament and additional staff may be employed at the fan parks, he said.
SABMiller, which jointly sponsors the South African national soccer team withAbsa Group Ltd., will build its marketing efforts around its Castle Lager brand and will place refrigerated vans in areas that may need additional supplies of beer. A hotline will be set up for vendors to call, he said.
Castle, along with Carling Black Label, is among the cheaper brands that SABMiller sells in South Africa.
June and July are mid-winter months in South Africa, usually a time of lower beer consumption, and this will help SABMiller to cater for the additional demand, he said. SABMiller normally sells about 25 million hectoliters of beer a year in South Africa out of total beer sales of 27 million hectoliters.
“We see a mini-peak” for the company, Hewitt said.
SABMiller shares fell 89 cents, or 0.4 percent, to 202.60 rand as of 9:12 a.m. in Johannesburg trading.
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