High beer taxes makes Ambev review investments for 2014

SAO PAULO-the new tax increases on cold drinks, including beer, soft drinks, energy drinks, isotonic drinks and refreshments, some of the products sold by Ambev, to come into force next day 1, did the manufacturer announce the revision of its investment plan for this year in the country.
On the occasion of the dissemination of the results of 2013, in February, Ambev announced investments of approximately r $ 2.8 billion in Brazil in 2014, the same amount invested in the last year, including the opening of two new factories, one in Uberlândia (State of Minas Gerais) and another in Ponta Grossa (PR). Now, with the new increase, the company did not mention the cipher, but says it will be less than the initially planned.
The taxation of cold drinks should increase the price of products of 1.3% on average, according to the IRS. If there is transfer to the consumer of this advancement, an estimated increase of 0.02% in the CPI-M, that makes up the index IGP-M.
The company States in material sent to the press, that "on the one hand it is understandable that the Government seeks to increase federal revenue to meet the primary surplus goals for the year, the company believes that there are other ways to achieve equivalent results without the current tax burden is changed".
With the entry into force of the new taxation and the corresponding adjustments in prices, Ambev estimates that there may be a negative impact on sales, which led her to revise its investment plans in the country.
Swing. Ambev's Brazilian operations recorded 8.6% advance in the volume of drinks sold in the first quarter of 2014, rising to 29.360 million hectolitres compared with volume of 27.038 million in the same period last year. The growth was driven mainly by the performance of sales of beer. From January to March this year, the volume of beer sold in Brazil had high of 10.9%, adding 21.984 million Hectoliters, up from 19.817 million hectolitres reported in the first quarter of 2013.
With sales growth, consolidated net revenue from the Brazil expanded 19.1% in the period, totaling R $ 5,888 billion compared to r $ 4,945 billion in 2013. The increase in net revenue per hectolitre (ROL/hl) was 9.7%, to $ 200,80 compared to $ 182,90 on the same basis of comparison.
I cost of goods sold (COGS) was discharged from 13.6%, totaling r $ 1,881 billion in the first quarter, while COGS/HL (COGS/hl) rose 4.6% from January to March, to $ 64,10. General and administrative expenses consolidated operations in Brazil increased by 18%, to R $ 1,735 billion, mainly due to marketing costs for the World Cup.
Beer. In result report released this Wednesday, 7, Ambev's administration points out that the beer segment during the period was benefited, among other factors, by the high temperatures of summer, by the late Carnival in March and by the fall of inflation of food, combined with a lower comparison base in 2013. "In addition to these short-term factors, the solid business execution and the success of the campaign '' summer without Increasing '' were instrumental in the increase in the volume of sales," said the company.
According to Ambev, the national beer market share remained stable at the end of the first quarter, at 67.5% in comparison with the preceding period. Compared with the first quarter of 2013, however, was decrease of 0.6 percentage point.
Separately, the revenue accruing from sales of beer in the country advanced 21.1%, reaching r $ 4,993 billion in the first quarter of 2014 before the gain of R $ 4,123 billion in same period in 2013. The indicator of net revenue/HL (ROL/hl) high was 9.2% to $ 227,1 compared to the r $ 208.1 for the first quarter of 2013. Despite the maintenance of market share and the campaign "summer without Increasing", "the solid performance of ROL per hectolitre was benefited by our revenue management strategy, by increasing the weight of direct distribution, as well as by the greater weight of the premium volume," said Ambev.
Already the COGS increased 15.8% in the quarter, to $ 1.457 billion, while COGS/HL grew 4.4% to r $ 66.3, impacted mainly by hedge operations (protection) of higher currency, partially offset by lower commodity hedges and greater dilution of fixed costs and depreciation.
As for the packaging, the 1 l and 300 ml returnable economic "continue growing above the industry average, as well as the premium brands such as Budweiser, Stella Artois, Bohemia and Original", according to the company. With regard to innovations, sales of Brahma 0.0% and Skol Beats Extreme deserved featured by the company and the Brahma 0.0%, launched in mid-2013, is already the market leader in alcohol-free beer.
Soft drinks and non-alcoholic beverages. The thread of soft drinks and non-alcoholic beverages also showed growth in the period, from 2.1%, from 7.221 million hectoliters in the first three months of 2013 to 7.375 million hectoliters in the first quarter of 2014. According to the company, market share gains of soft drinks impulsionariam the result. At the end of the period January to March, Ambev owned 18.5% share in this market, growth of 0.2 percentage point. compared to the first quarter of 2013.
Ambev also cited as highlights in that category the Guarana Antarctica, with a "well-executed marketing strategy and consumer promotions"; Pepsi, thanks to the launch of the 1 litre returnable packaging; and the arrival on the market of Education! Limoneto.
The net revenue from sales of the segment totaled r $ 895,3 million, against r $ 822,7 million, which represents a growth of 8.8% from the first quarter of 2014 and 2013. NET/hl was discharged of 6.5% on the same basis of comparison, from r to R $ 113,9 121,4.
COGS climbed 6.6% ($ 423,3 million), while the COGS/HL increased 4.3% (R $ 57.5), also impacted by currency hedging, partially offset by commodity protection operations.