How much beer will an AB InBev SABMiller super-brewer produce?
AB InBev, already the world’s largest brewer, has secured a shareholder vote in favour of acquisition of SABMiller, the world’s second largest brewer.
The companies have spent more than a year seeking regulatory approval from the likes of the European Union, and now the £79 billion deal looks set to go ahead by October 10 after a meeting earlier today.
In what would be the UK’s largest ever corporate merger, the move would see the newly formed company account for 30 percent of the world’s beer, covering more than 220 brands spanning Argentina, Australia, Belgium, Bolivia, Botswana, Brazil, Canada, Canary Islands, Channel Islands, China, Colombia, Czech Republic, Ecuador, El Salvador, France, Germany, Ghana, Honduras, Hungary, India, Italy, Lesotho, Luxembourg, Mexico, Mozambique, Netherlands, Panama, Peru, Poland, Romania, Russia, Slovakia, South Africa, South Korea, Swaziland, Sweden, Tanzania, Uganda, Ukraine, the UK, USA, Uruguay, Vietnam, Zambia and Zimbabwe.
But how much beer does this equate to? A few calculations can provide a general estimate, and the numbers don’t disappoint.
According to Statista, in 2015 AB InBev produced 457 million hectolitres of drinks (vast majority of which is beer), equivalent to 45.7 billion litres. The company holds a market share of just over 20 percent. Given SABMiller’s market share is just below 10 percent, we can estimate it produces around 200-225 million hectolitres, or 20-25 billion litres. Merge the two companies together and the new master brewer could be producing anywhere between 65 and 70 billion litres of beer each year. That’s about a 1,000 litres of beer for everyone in the UK, or 2,000 pints.
In a bid to push the deal through, AB InBev has had to sell off some of its brands, with Japanese company Asahi buying the rights to Peroni and Grolsch brands.
More than half of FTSE 100 execs suffer pay cuts, freezes
Pay increases for many executives at the largest UK firms have been put on hold since the start of the pandemic with more than half of the FTSE 100 CEOs having had their salaries frozen in 2021, according to new research from PwC.
The research, based on PwC’s analysis of the first 50 FTSE 100 firms to publish their 2021 annual remuneration reports, reveals that 53% of CEOs and 52% of CFOs have had their pay reviews put on hold, compared to 35% and 30%, respectively, last year, pointing to the pandemic as the main reason.
According to Phillippa O’Connor, reward and employment leader at PwC, the current environment and impact of the pandemic has clearly led shareholders to sharpen their pencils when reviewing executive pay levels this year.
“It is clear from the pay outcomes we have seen to date in the FTSE 100 that companies have exercised restraint when it comes to both determining outcomes for the 2020 performance year and settling pay on a forward-looking basis for 2021,” says O’Conoor.
Bonuses, grants and pensions also affected
But that’s not all. Around a third (31%) of companies either waived, cancelled or reduced their 2020 annual bonuses, with the average payout dropping from just uhnder £1.1m to £843,000.
When it comes 2021 long-term incentive plan (LTIP) grants, these have also been revised in light of the economic impact of the pandemic with 45% of firms making some adjustment to their award, including retaining discretion to adjust outcomes at vesting in respect of windfall gains, reducing grant size, delaying the grant, and even canceling the award altogether.
The study shows that pension levels for incumbent CEOs remain at 15% of their salary, falling to 10% for new hires, bringing them in line with the wider workforce. Eight out of 10 FTSE 100 companies will have aligned incumbent pension levels with those for the wider workforce by the end of 2022.
O’Connor warns that moving forward into AGM season, there is likely to be added scrutiny around any pay rises that are greater than those for the wider workforce and on incentive outcomes that are “either not aligned with business performance or do not take into account the company’s approach towards matters such as diviends and government support”.
What announcements did UK's big firms make?
Back in April 2020, as the pandemic was just getting started, a number of UK companies, mainly insurance and banking stepped forward to review remuneration packages in response to the economic implications of the COVID-19 crisis.
British insurance giant Aviva announced that basic pay increases for its executive directors and the Aviva leadership team would be paused, while the executive directors of Prudential offered that their salaries be reduced and RSA confirmed its exec directors and executive committee would not be receiving cash bonuses for the current year.
The same was true in banking and finance with TSB announcing that its 10-strong executive committee would give up their bonuses in 2020, while Barclays said its chief executive, finance director and chairman would each give a third of their fixed pay for the next six months to charities. Lloyds cancelled its bonus payments and pay reviews in 2020
Other big UK firms including Ryanair, Taylor Wimpey and Rentokil all committed to reducing their executives pay packages.