Latest bottle battle
Using stronger language than it had a day earlier, the local unit of giant SABMiller said that it was "aggrieved" by the ruling, which accepted calculations brandhouse had provided to back up advertising claims it had made that retailers would make more profit by selling 660ml bottles of premium Amstel than SAB's 750ml bottles of Carling Black Label.
SAB will ask the authority to reconsider its ruling.
It complained to the watchdog last month about a trade pamphlet brandhouse had distributed to retailers claiming that they would make a higher margin and sell more by retailing a lower-priced bottle.
Last week, the authority dismissed all of SAB's complaints, saying brandhouse had shown it could justify its claims.
It is the latest ruling in a string of complaints and counter-complaints between SAB and the HeinekenDiageo-Namibian Breweries joint venture to the ASA, as both of the brewers fight to win market share in the township market that accounts for about 80% of all the beer consumed in SA.
At the heart of the current fight is brandhouse's attempt to lure drinkers of mainstream Carling Black Label, the country's largest selling beer, to Amstel, which it is pitching as an affordable premium alternative to a market that is becoming wealthier.
SAB's objections to the ruling centre on calculations of the profit margin retailers make. The authority accepted brandhouse's calculation of the margin a retailer makes on product it received from a "bulk breaker", or middleman, who distributes product from the brewer, saying the "bulk breaker list price is ... the price at which the vast majority of tavern owners buy Amstel".
This was an incorrect way to calculate retailer margin on its products, however, because the "vast majority" of its beer was distributed directly to retailers, SAB said.
"The margin that retailers get is not eroded via a middleman. As such, the argument and figures given to the ASA are flawed and inaccurate," the brewer said.
Macquarie First South Securities head of research Julian Wentzel yesterday said SAB had a case.
"Based on the facts presented to the ASA, the ruling is correct, but my contention is that the facts presented to the ASA don't represent reality," he said.
Source: Business Day
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