San Miguel Brewery Inc. on Tuesday said that it is confident stronger consumer spending could boost its net income to as much as P15 billion by the end of the year notwithstanding the looming liquor ban.
On the sidelines of the company’s annual stockholders’ meeting, SMBI Chairman Ramon Ang, said volume growth would reverse a drop last year because of the imposition of higher sin taxes.
“I think SMB is doing very well because, for first quarter alone, net income is P4 billion. And that’s not the peak season yet, usually the peak is during Christmas and summer,” Ang said.
If sales remain normal, Ang said net income should reach P12 billion to P15 billion this year, from the reported P13.5 billion realized in 2015.
Net income grew 23 percent in the first quarter or P4 billion.
The brewery likewise expects to benefit from higher consumer spending in the first half of the year because of the national elections.
SMC boasts a commanding 97 percent market share. “We are in every segment of the beer market. We also have San Miguel Premium Beer for the premium market. In fact, our premium beer is doing very, very well. Even in the international market our San Miguel Premium is doing very, very well,” said Ang.
He noted that, “In the beer business side, SMB does not need to do anything. We have been competing with every major beer maker in the world, none of them were successful in competing with us in the Philippines.”
“It’s nothing new that an international brand tries to penetrate the local market. They’ve been coming here for the last 50 years. But they are used to selling beer at 200 to 300 pesos a bottle while beer here sells for only 20 plus per bottle,” Ang said.
He also pointed out that SMB is not threatened by prospects of a liquor ban, which is in effect in Davao and is anticipated to be implemented nationwide by the incoming Duterte administration.
“It is not a threat. Consumers would simply adjust their drinking time say an hour earlier from the usual. So if it is normally 9 pm, they start at 8 pm,” he said.
Under the ban, alcoholic products cannot be sold beyond 1am or 2am.
“Liquor ban is nothing new for us. Our volume in Davao is not affected at all. Besides, a lot of beer drinkers now drink in the daytime because they work in BPO [business process outsourcing]companies,” Ang said.