Soda industry sees new record fall risk

Sao Paulo-the manufacture of soft drinks in Brazil may have another year of decline in production in 2016. After a retreat of almost 6% in the volume of drinks produced in 2015, worst result in five years, the industry sees the risk of a new equal or even superior retraction in 2016, as the President of the Brazilian Association of manufacturers of soft drinks and non-alcoholic drinks (ABIR), Alexander Jobim.
The manufacture of soft drinks comes registering successive monthly falls since February last year. In March, retreated 5.4% compared with the same month of the previous year, according to the figures of the production control system of drink (Sicobe).
In the first three months of the year, the fall is from same period of 7.7% before 2015.
For the Abir, who represents some of the largest companies in the sector, the demand for soft drinks is falling in front of a backdrop of reduction of expenses of households.
As the final consumer is not buying, the industry is producing less. This has forced companies to put the machines to work for fewer hours a day.
In his assessment, the impact of this downturn on non-converted still in unemployment because the production is highly mechanized. The risk, however, says, is the prospect of continuity of retraction.
"Can happen we two crashes on the order of 6% or 7% per annum as a result and it happens to be something complicated for the maintenance of jobs and investment," said Jobim.
For the Executive, the industry has still sense the impact of some high taxes. The largest tax burden for this year was caused by an increase in VALUE-ADDED tax rates in several States.
This effect tends to cause price increases in products precisely at a time when consumers are more sensitive to price.
Beers
The fall in the production of soft drinks has been accompanied by a deterioration in the beer market, too.
In the case of alcohol, the retraction in the volume was less intense: the fall was nearly 2% in 2015. In the first quarter of this year there was an intensification of the negative scenario and beer production fell 6.7 percent.
The deterioration in the first quarter was stronger than expected by analysts, but still, market professionals consider the effect on the results of Ambev may not be so negative.
The main explanation is that the decline in sales in volume may be overshadowed, at least in part, by an increase in the price per hectolitre of liquor sold.
"In the case of Ambev, the numbers could be worse if we weren''t talking about a company with several initiatives in progress", commented in a report this week analysts of BTG Pactual Thiago Duarte and José Luis Rizzardo.
They consider that the company''s beer prices in Brazil can grow above inflation on a larger participation of premium beverages in total sales.
Citi gave a similar account. For Analyst Alexander Robarts, Ambev should encourage a revenue growth per hectolitre while mira downsizing.
Despite the weakened consumption indicators, weighed, the power of placing price of Ambev is an advantage.