Brewery begins to adjust production

Beverage industries will need to make adjustments to maintain profitability in this semester, taking into account the trend of slowing consumption. The numbers of production control system of Drinks (Sicobe), internal revenue service, indicate that this movement has already begun to be done. In July, the production of beer in the country had increased 2.5% compared to the same period last year, a total of 1.052 billion liters.
The accumulated from January to July, production increased 10.3% to 7.99 billion liters. In the first half of the year, production grew 11.6%. Credit Suisse had already warned recently that companies formed stocks at the beginning of the year to meet demand during the Fifa World Cup, and the volumes sold could be smaller than those made in the first half.
The results disclosed last week by Ambev, the market leader in beer, indicated a reduction in the pace of sales, even during the World Cup. The Beer Division Brazil grew 11.2%, with an increase of 7.2% in volume and breakthrough in revenue per hectolitre of 3.8%. In the first quarter, Ambev had recorded an increase in revenue of 21.1% in Brazil, with an increase of 10.9% in volume, and 9.2% in revenue per hectolitre. Even with weaker growth, Ambev has expanded the Brazilian beer market share at 0.9 percentage point to 68.4%.
Results published by Femsa last week also indicated that Heineken had weak results. The brewery discloses your swing this week. Femsa reported 12.1% drop in net income and the result was associated with the participation of 20% that has on Heineken.
Ambev reported that plans to make adjustments, including a reduction in investment and operating costs. The company also reported that considers difficult to make actual adjustments of price, due to the stability of the income of families in the country and the scenario of weaker economic growth.
Served as encouragement for the industries in the sector to Government's decision to postpone the increase in tax charge of cold drinks for September or October. After announcing it would raise taxes in June, the Finance Minister, Guido Mantega, stated that the change would occur in September. After that, the IRS reported that high would be gradual and that hadn't been set a deadline for the first rise in taxes.
Still, the increase in the tax burden will be a factor of pressure for the sector. The Associação Brasileira da Indústria da Beer (CervBrasil), which represents the largest manufacturers in the country-Ambev, Petropolis, Brazil Kirin and Heineken-had already warned that the change in taxes would have a more significant impact than the elevation of the multiplier of the basis for calculation of tax on industrialized products (IPI) and PIS/Cofins, which began to take effect in April.
An increase in the prices of beer on the eve of the summer can hinder the goal of Ambev to expand the recipe in a digit or two digits in the year. And will also affect its competitors.