South African Breweries’ (SAB’s) dominant position in the South African beer market might, over time, give it an advantage if the government went ahead with a ban on alcohol advertising, but SABMiller chief executive Alan Clark said it was hard to predict exactly what would happen.
“If there’s an advertising ban, and the market goes dark, in theory the established players do better,” Clark told Business Report.
But he added that there was not sufficient experience of alcohol markets “going dark” to be confident of knowing what would happen. He said that it was difficult to draw any conclusions from what happened to cigarette sales after the ban on cigarette advertising because of the addictive nature of cigarettes.
Clark said he felt that the ANC’s attention had shifted to the upcoming elections and the advertising ban was not currently a priority for the ruling party. “It’s impossible to predict whether or not it [the interest in a ban] will revive.”
The only countries where there is a ban on alcohol advertising are India, Russia and Turkey.
In Russia and Turkey alcohol consumption has dropped, but it is unclear whether this is attributable to the advertising ban or to other adverse developments in those markets.
SABMiller’s exposure to beer consumption in Russia was significantly reduced after its 2011 deal with Turkey’s Anadolu Efes, which saw it exchange its Russian and Ukrainian beer interests for a 24 percent stake in Anadolu Efes, which has beer and soft drink operations.
France also has tight restrictions on alcohol advertising.
There would still be opportunities for companies to undertake point-of-sale advertising and merchandising. “I know of no country where that is banned,” Clark said.
Retail analysts also point out that if there is a ban, alcohol producers could use the internet to get access to consumers or use surrogate products as they do in India to get exposure to a brand name. – Ann Crotty