The maker of Pilsner Urquell, Grolsch and Aguila, among other beers, announced the shift away from a decentralized structure this week to managers at the London-based brewer's global leadership conference, said the report. The change is aimed at boosting sales and profits from existing operations, [image-nocss] after many years in which SABMiller generated much of its growth from acquisitions, it added.
SABMiller executiveswho essentially have acted as local CEOs in countries such as South Africa, Colombia and Polandnow will concentrate on building brands and gaining shelf space at bars and stores, the Journal said.
"We think our management must have the space and bandwidth to concentrate on that rather than having to worry about a whole lot of other stuff," CEO Graham Mackay told the newspaper. "There's more and more of an imperative for organic growth in the aftermath of the major M&A" in the industry.
A flurry of deals, including Heineken NV's purchase earlier this year of the beer unit of Fomento Economico Mexicano SAB de CV, or Femsa, of Mexico, and the 2008 deal that created Anheuser-Busch InBev NV, has left relatively few opportunities for major brewers to expand through acquisitions, Mackay added. His company's most recent major deal came in 2008, when it combined its U.S. unit with that of Molson Coors Brewing Co., creating a joint venture called MillerCoors LLC.
SABMiller, the second-largest brewer by sales after Anheuser-Busch, is streamlining its business by centralizing backoffice finance, human resources and manufacturing systems and someparts of its supply chain, the report said. It previously disclosed plans to lower costs through global procurement and backoffice systems, but first communicated the shifts in management responsibilities in the meetings with its executives this week, said the Journal.
SABMiller and other major beercompanies are trying to build on the strong sales-volume growth they are seeing in emerging economies such as China, while adjusting prices and trimming costs to offset slower growth or declines in markets such as theUnited Statesand much of Europe, the report said.
Mackay said SABMiller, which had $26 billion in revenue in its fiscal year ended in March, is "cautious" about major acquisitions and engaged in heavy due diligence before dropping out of the running last year to buy Femsa, Mexico's No. 2 brewer.
Hedeclined totell the Journalwhether thecompany was interested in acquiring the beer business of Australia's Foster's Group Ltd., which plans to split its beer and wine units into two companies and has turned down an offer for the wine unit by a private-equity firm. "You would have expected us to have had a look at Foster's," Mackay said, because SABMiller reviews all big deals that come up.
Mackay, 61,has run the company for more than a decade; he said it is "unlikely" that he would remain CEO until SABMiller's mandatory retirement age of 65. But he would notsay when he might step down. "I love what I do," he said. "I have had a very lucky streak."
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.