They all want to go global, but companies in the beverages sector face different challenges in their efforts to become significant world players.
The biggest of the SA beverage companies, SABMiller, is already a global company. After a series of acquisitions begun in the early 1980s and accelerated in the mid-1990s, SABMiller is now the world's second-biggest brewer (by volume) after Anheuser-Busch of the US. This followed the acquisition last year of Miller Brewing for US$5bn from Philip Morris (now Altria).
Given the size of that deal, most analysts expected SABMiller to hold back on further acquisitions until it had settled down with Miller. But in May it made its first investment in Western Europe when it bought Italy's Peroni brewing company.
Distell, on the other hand, is in the early stages of transforming itself into a serious player in the global spirits and wine industry. The company recently got conditional approval from the competition authorities for the merger of Distillers and SFW to form Distell. The merger was approved on condition that Distell sells some of its brands to reduce its dominance of the local liquor industry. The approval is important because it allows the company to focus on reaping the benefits of the merger.
Distell's push into the global market is driven at present by exports of its Amarula Cream and Nederburg wine brands.
It is not yet clear what the next step in its internationalisation strategy will be. Analysts say the group may need to tie up with one of the major liquor companies. SABMiller's 30% shareholding in Distell may be the avenue through which that tie-up is effected.
ABI faces slightly different challenges from those of its parent SABMiller or Distell. It must decide what to do with its cash pile, which stood at R773m at the end of March 2003, up from R445m in 2002. That decision is made difficult by the fact that ABI remains home-bound. Though parent SABMiller has increased its ownership of carbonated soft-drinks businesses outside SA, ABI's role has been restricted to support.
In the rest of Africa, SABMiller is big in soft drinks through subsidiaries and through its 20% share in the African beer and soft-drinks operations of French group Castel.
