SABMiller’s Position in Latin America Threatened by Colombian Joint Venture

South Africa’s giant drinks producer SABMiller will have its monopoly in Colombia challenged by a joint venture between soft-drinks maker Postobon and Chile’s largest brewer, Cia. Cervecerias Unidas (CCU).

The two Latin American companies will combine to make a $400 million enterprise called Central Cervecera de Colombia, which will construct a factory in Bogota able to initially produce three million hectolitres of beer each year (or 15 percent of the current Colombian beer market).

SABMiller, under its company Bavaria in Colombia, has a hold of 98 percent of the country’s beer market which represents the company’s second-most lucrative territory after home base South Africa.

Postobon is Colombia’s most significant soda producer and is looking to expand beyond its traditional offerings.

Currently Bavaria sells its Poker, Costena, Aguila, Pilsen and Club Colombia brands in the country, and is the second-largest brewer in the world behind AB Inbev.

The Luksic family, Chile’s wealthiest, and Heineken have 50 percent each of the holding company that owns a majority stake in CCU. It is the largest brewer in Chile with brands such as Cristal, Escudo and Heineken, and is also the second-largest in Argentina, where it sells Schneider, Corona, Heineken and Budweiser.