Conglomerate San Miguel Corp. (SMC) said its beer and spirit units showed signs of recovery after the government eased lockdown restrictions which dented demand for their products.
San Miguel Brewery Inc. (SMB) said its income in the first half fell 62 percent to P5 billion, from last year’s P13.25 billion due to the drop in sales. Its revenues during the period ended at P42.8 billion, down 39 percent from last year’s P70.28 billion.
Ginebra San Miguel Inc., meanwhile, claimed that demand for its products jumped significantly as it recorded its highest volumes in June. The company, however, did not provide more details.
“Demand for our beer and liquor products, remain strong, and if June and July are any indication, we’re seeing signs of a strong recovery in the second half of the year,” SMC President and Chief Operating Officer Ramon S. Ang said.
“We have been working steadily to adapt to the new normal, and adjust our operations where needed, to better serve the market during these challenging times. Despite the declaration of a new, two-week MECQ [modified enhanced community quarantine] by government, I believe we’re in a better position now to build on our gains for the rest of the year and beyond. The strong demand we’re seeing is also a big encouragement.”
SMC said the full impact of the lockdown was reflected on the first half performance of its beer business. Domestic operations volumes were lower than in the same six-month period last year, due to the implementation of the enhanced community quarantine, liquor bans, the extended closure of beer selling outlets, as well as the imposition of higher excise taxes on beer products.
International operations also reflected the effect of the different levels of lockdown and restrictions in countries where SMB operates, particularly in Indonesia, Hong Kong, Vietnam. Its export markets, however, registered favorable results.
In the two months since the lockdown restrictions were eased, Ang said that both SMB and Ginebra worked not only to get their operations back up, but also to implement programs that will further strengthen each unit’s resilience.
These include maximizing operational efficiencies, introducing new ways to make products more easily accessible to consumers and the utilization of online platforms to promote products.
SMB said it implemented effective cost management and tighter business controls to sustain positive profit level and protect margins in the first semester.
Ginebra, meanwhile, started trade replenishments in mid-May, and registered record volumes in June.
Ang said the liquor firm’s volumes were boosted by its strong brand equity that kept it in the minds of consumers and encouraged consumption; prompt replenishment of stocks in outlets, as well as the expansion to e-commerce channels.
“We’re optimistic about this second half, especially since our first half reflects the full impact of the pandemic and the more than two-month quarantine. We look forward to executing on all the programs we’ve put in place, especially since it will boost not just our businesses, but also the many other small and medium enterprises in our supply chain, who are impacted by this pandemic,” he said.
“Another important thing for us is that our partners across so many provinces nationwide are back earning a livelihood. From bottle-collectors, to sari-sari stores, dealers, to haulers, among others. At this time when our economy is affected, we need to help as many of our countrymen as possible—while adhering strictly to safety guidelines on quarantines, nationwide.”