The combined food and beverage sector had a busy year in 2005. After months of speculation, SABMiller finally acquired Grupo Empresarial Bavaria (Bavaria), South America's second-largest brewing company after Brazil's Brahma, which is part of global brewing leader Inbev.

It was the biggest deal SABMiller had yet made, costing an effective US$7,8bn and paid for in shares. It eclipsed the previous largest deal - the $5bn acquisition of Miller Brewing in the US in 2002.

The Santa Domingo family that controlled Bavaria now has 16% of SABMiller's equity and two board positions.

Bavaria is the undisputed leader in the Andean region of South America and is a great fit for SABMiller.

SABMiller CEO Graham Mackay sees 50% volume growth potential in Colombia and 40% in Peru. The production base is good and capacity utilisation is about 65%, which means that not much will have to be spent on production.

The Tiger Brands share price has been on a roll for the past three years, topping out at about R150 by year-end.

At a R30bn market capitalisation, Tiger is almost three times the size of its nearest listed competitor, Tongaat-Hulett. It's difficult to make meaningful comparisons with other food producers, but no other listed food company produces anywhere near Tiger's range - nor do any of them produce pharmaceuticals. Since year-end, it's made some significant acquisitions, buying Bromor Foods and Nestlé's sugar confectionery business.

AVI bought A&D Spitz last year, snatching it away from unlisted Stuttafords Stores. This was not long after it had unbundled Consol to its shareholders and sold Vector Logistics. Earnings growth is still dogged by relatively poor performances from fishing subsidiary I&J.

Distell's empowerment transaction with a Wiphold-led consortium took place in September 2005.

Two unusual and very welcome features of this deal were that it was simple and there were no handouts. It's also a broad-based deal, as Distell staff will own 45% of the shares in the consortium, which is locked into the deal for 8-10 years.

Distell is a notoriously illiquid share, with only 10% of its issued equity available for trade. The other 90% is held 30% each by Remgro, KWV and SABMiller. Because of this illiquidity, it was necessary to use an existing Distell subsidiary - SA Distilleries & Wines (SADW) - to transact the deal, even though on completion the consortium's stake will be in the listed entity.

The only alternative to this type of transaction would have been for one or more of the major shareholders to sell all or part of their holdings to the consortium.

Astral Foods, which was unbundled from Tiger Brands a few years ago, continues to produce great results.

The improvement in earnings for the six months to March 2006 was mainly due to continued buoyant consumer spending, particularly during the first quarter.