|
ASIA
Brewery Inc., manufacturer of pale pilsen Beer na Beer
and soda drink Virgin in the Philippines, may hike
prices for the second time this year, one of its top
executives said.
That is,
if competitor and market leader San Miguel Corp. would
do so, chief operating officer Michael G. Tan told
BusinessMirror on the sidelines of a stockholders’
meeting Thursday.
“I’m
just wondering why they [San Miguel] haven’t [increased
their beer prices] considering that the prices of barley
and hops have gone through the roof,” said Tan, son of
Asia Brewery owner and tycoon Lucio Tan.
He said
the pressure came from a decrease in the output of
barley—a major beer ingredient–in drought-ridden
Australia.
The move
toward alternative fuel source ethanol also impacted on
corn prices. “The general trend is that commodity prices
are going up,” Tan said, adding that this would impact
beer prices even outside the Philippines.
A third
and major source of pressure to push up beer prices is
the excise tax applied on beer effective January this
year.
According to a Bureau of Internal Revenue report, a
250-milliliter bottle of Beer Pale Pilsen that carries a
P11.26 retail price price-tag was slapped with a
P6.30-sin tax.
“Effectively, that tax was an eight-percent add-on
pressure to the cost of manufacturing,” Tan added.
With
these factors, Tan said Asia Brewery raised beginning
March, the prices of all its products: 10 beer variants,
three bottled water brands, and the Virgin brand.
He
declined to say how much percentage was added on to each
brand’s dealership price.
A
second-price hike this year could be a remote
possibility, he said, but a possibility nonetheless if
San Miguel does increase prices.
Tan said
the decision to hike prices was a major decision,
considering they foresee a shrinking market for beer.
“The
market size is at the same level we had in 1991; there
hasn’t been an expansion in the beer market for the past
15 years,” Tan said, saying the market size is at 15
million hectoliters per year. A hectoliter is equal to a
hundred liters.
Net
sales of Asia Brewery has declined from nearly P5.8
billion in 2004 to P5.033 billion in 2005, according to
the latest financial statement the company submitted to
the Securities and Exchange Commission.
The
decline was reflected in the company’s income two years
ago that went down to P50.79 million from P73.55 million
in 2004, the year Asia Brewery introduced United Kingdom
brand Virgin.
Still,
Tan said there has been a noticeable take-up in the
strong beer segment and that the company has seen this
in increasing sales for its Colt 45 brand.
Tan said
the company’s softdrinks segment is also “doing great,
with triple-digit growth.”
With
that, Tan said the company would open a third facility
in Davao next year, in addition to its El Salvador,
Cagayan de Oro City brewery and headquarters in Cabuyao,
Laguna. |
