What do you do when you have a growing economy? Well you drink more beer. Brazilian's largest brewery Cia De Bebidas das Americas had to import beer cans after their local manufacturing plant couldn't keep up. This was the first time this brewery had to import can's in its 125 year history. The Brazilian economy has been doing exceedingly well and it is speculated that there economy while have 6.6% growth rate. It is not only beer which there are shortages of but other commodities such as tires.
While beer is not being able to be made quick enough for the rising demand, especially during the FIFA World Cup, companies are responding wisely to this shortage. Anheuser Imbev who owns Brahma beer has not put any of the cost on to customers after having to import materials. This is a wise decision, because if the Brazilian economy is increasing it is important to keep the brand name in people's mind and not the cost of the product. With the increase of the economy, imported beers from other countries could potentially flood in, especially if the local beer can't keep up with production.
The Brazilian government is also helping to keep the beer costs down by lowering the tariff on beer cans and beer labels. This action could be seen as protectionist by the government, but instead of raising prices on imports they have decreased. I doubt there will be any complaints from outside companies, because the biggest supplier of beer Anheuser Imbev is already in that market. This crisis was averted, because of the co-operation of both the government and businesses. It will be interesting to watch the beer industry in Brazil to see how Anheuser Imbev responds to this boom in business.
Reference:
http://www.bloomberg.com/apps/news?pid=20601086&sid=aPMqULFO_alA
Wednesday, June 16, 2010
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