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Venezuela Food and Drink Report Q3 2008Published by: Business Monitor International Published: Jul. 21, 2008 - 52 Pages Table of Contents
AbstractOver the past two years the alcoholic drinks industry in Venezuela has been under attack from thecountry’s President Hugo Chávez, as discussed in BMI's newly published Q308 Venezuela Food & DrinkReport. Chávez, who claims to rarely drink, has introduced a raft of new taxes and made it more difficultfor importers to access the US dollars they need to purchase brand name spirits from multinational firms.Despite these moves, alcohol consumption continues to rise at both ends of the socio-economic spectrum.However, BMI expects these anti-alcohol measures to eventually have a negative effect on this rate ofgrowth.Chávez has attacked the lack of morals in Venezuela’s society and raised concerns that too manyVenezuelans swill beer on street corners. Chávez began his crusade against the alcohol industry bybanning beer trucks that traditionally acted as mobile markets selling beer in the country’s poorerneighbourhoods. The Venezuelan beer industry is dominated by local firm Empresas Polar S.A. whichcontrols around 80% of the market. Another local firm Cervecería Regional controls around 12% of themarket, while multinational brewer InBev controls around 7%. In October 2007 Chávez stepped up his campaign against alcohol by announcing a substantial increase inthe tax charged on beer and spirits. In addition Chávez announced that stores near schools, churches andcultural centres would not be allowed to sell alcohol and that the government would no longer makegovernment dollars available to import luxury spirits such as whiskies. With dollars on the black marketchanging hands for twice the official exchange rate this policy would significantly increase the priceconsumers are forced to pay for imported spirits. Venezuela has the highest per capita beer consumption rate in Latin America and despite these measuresdesigned to curb consumption sales continue to climb. Between 2002 and 2007 consumption in volumeterms increased by 13% however BMI is forecasting that the additional taxes, plus continued measures toreduce sales outlets will eventually take their toll and this rate of growth is expected to slow down overthe next five years. Venezuela is also a big consumer of spirits, with whiskey particularly popular. According to the ScotchWhiskey Association Venezuela is currently the fifth biggest market for Scotch in the world, however ifprices are pushed up substantially demand in this sector is also likely to decline. BMI is thereforeforecasting that consumption of spirits in volume terms will increase by only a modest 7% over the nextfive years and that consumption of imported luxury spirits may actually start to decline. Get Full Details About This Report >> |
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