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Brahma to make huge increase in marketing expenditure
Impact International / April 1, 1998

By Larry Luxner

Companhia Cervejaria Brahma, Brazil's leading brewer, will invest half a billion dollars in advertising, promotion and distribution during 1998, up from $476 million last year. Over the same period, Brahma beer sales have risen 7.9% in Brazil, 22.4% in Venezuela and 27.6% in Argentina. Profits, meanwhile, came to $456.3 million in 1997, a 40.5% jump from the year before. The company, predicting 3-5% growth despite a slowdown in the Brazilian economy, is erecting a new brewery in Rio Grande do Sul slated to come on-line later this year.

In 1996, Brahma agreed to become Pepsi's largest Brazilian franchise bottler -- covering over 80% of the country including such key markets as São Paulo, Rio de Janeiro, Pôrto Alegre, Salvador and Recife.

Under the long-term agreement, Brahma now oversees production and distribution of Pepsi soft-drinks at five plants Brahma will acquire from BAESA (Pepsi's former Brazilian bottler), as well as at nine of its existing soft-drink plants throughout Brazil. Brahma produces popular soft drinks under the Guaraná, Sukita and Limão brand names.

Meanwhile, Brazil's Cervejaria Antarctica, the country's No. 2 beer brand, will resume U.S. soft-drink production next month under an agreement with Brooklyn Bottling Corp. The company stopped producing in the United States two years ago, when its contract with CAP Beverage expired.

Antarctica's goal is to bottle 600,000 boxes of soft drinks in the next 12 months, first in Florida and later in New York; nearly $1.5 million will be spent on advertising and promotion. Antarctica will also invest $2.5 million to boost production in Japan, where it sold 100,000 boxes last year; it also has a franchise agreement with Super Refresco of Portugal. All told, the São Paulo-based brewer sold 11 million liters of soft drinks outside Brazil in 1997, a 57.1% jump over 1996.

Last year, Antarctica announced a plan to begin exporting Rio Cristal beer to the United States. Rio Cristal -- being produced at Antarctica's Rio de Janeiro brewery -- was developed on a partnership basis with Anheuser-Busch, makers of Budweiser. Under a 1995 agreement, Anheuser-Busch has a 49% stake in Budweiser Brasil, and recently invested $52.5 million to acquire an additional 5% in Antarctica. Before that, all Budweiser consumed in Brazil was imported.

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