SABMiller dominates this hybrid sector in profitability and market capitalisation. The group continued to forge ahead with strong organic growth and intelligent acquisitions in 2006. The South American acquisition, Grupo Empresarial Bavaria, was fully absorbed into the group in 2006. Results from this source are especially strong and it seems destined to become the single largest profit source, displacing SAB Ltd in SA.

SAB Ltd had a chequered year, with its mainstream brands Castle, Castle Milk Stout, Carling Black Label and Hansa experiencing flat volumes, while its premium brands grew virtually exponentially. The long hot SA summer helped beer and soft drink sales in the second half of the financial year to March 2007.

But the company suffered a major blow in February when Heineken won the right to take back its Amstel brand, which SAB had brewed under licence for over 40 years. Heineken is the leading premium beer brand in SA, with about a 50% share of the premium market. Though SAB always knew Heineken might want to terminate its contract, the way in which it happened came as a nasty surprise. It will be interesting to see how Heineken and SAB square off against each other in future for dominance in the premium beer sector.

The group did well in most other global jurisdictions, notably in China, where its Snow brand became the country's best-selling beer last year, overtaking the old-established Tsingtao brand, in which Anheuser-Busch of the US has a minority stake.

Distell, in which SABMiller has a 30% stake, had a reasonable year, though its wine sales into Europe and the UK dipped in line with that of other producers.

Tiger Brands' share price marked time in 2006 but took off in early 2007, hitting just more than R200/share by April. Not long after that it was announced that Tiger is looking to divest itself of pharmaceutical and hospital subsidiary Adcock-Ingram. Assuming it is unbundled to shareholders, this will be the third significant unbundling by Tiger in the past 10 years, the others being Astral Foods in 1999 and Spar in 2004.

Tongaat-Hulett came out with good results last year and also announced it would be unbundling Hulett Aluminium (Hulamin) - set for June 25. During his tenure as CEO, Peter Staude has transformed this once sleepy, neo-colonial behemoth into a sleek agribusiness with lots of potential.

Distell had a great interim period. The main point to note is the strong growth of RTDs (ready-to-drink products), also known as flavoured alcoholic beverages. Distell's RTD portfolio includes top-selling ciders Hunter's and Savanna, Bacardi Breezer, Klipdrift & Cola, as well as Bernini, Esprit and Hunter's Extreme. The RTD market share has doubled in the past 10 years and now accounts for about 4% of the total alcoholic drinks market (calculated by alcohol content).

Our hot pick of 2007, Afgri, continued its strong turnaround last year and indications are this will continue. What makes the performance more creditable is the relatively poor agricultural background in which it is operating. Farmers reduced maize plantings by 40% in 2006 as the maize price remained depressed. The outlook remains challenging, but management is confident of maintaining strong earnings growth.