"Chile Food & Drink Report Q4 2013" Published

From: Fast Market Research, Inc.
Published: Wed Sep 18 2013

As a more cautious view of the Latin American consumer evolves, Chile's growth story looks set to cool heading into Q4. Although the country remains one of Latin America's key regional performers, with sustained growth in recent years, downwards pressure on the consumer is likely to gain pace as economic deceleration feeds off a decline in key export activity. Despite a sustained uptick in private consumption on the back of Chinese demand in recent years, we forecast private consumption in Chile to slow towards the end of the year. Growth is expected to fall from 6.1% in 2012 to 4.6% in 2013, demonstrating a clear dip in acceleration. First quarter figures further reflect this slowdown, with consumption dropping 9.2% quarteron- quarter, inevitably impacting purchasing power. Unemployment figures indicate a further strain on consumer confidence, with the joblessness rate set to rise from 6.2% in March to 6.8% by year end, contributing again to a cooling in consumption growth.

Full Report Details at
- http://www.fastmr.com/prod/673276_chile_food_drink_report_q4_2013.aspx?afid=303

Headline Industry Forecasts (local currency terms)

* 2013 per capita food consumption growth = +5.2% year-on-year (y-o-y); compound annual growth rate (CAGR) to 2017 = +5.4%.
* 2013 alcoholic drinks value sales = +5.7%; forecast CAGR to 2017 = +5.8%.
* 2013 soft drinks value sales = +7.2%; forecast CAGR to 2017 = +7.4%.
* 2013 mass grocery retail value sales = +5.2%; forecast CAGR to 2017 = +5.5%.

Key Company Trends

Andina's Net Profits Decline In FY12: In March 2013, Coca-Cola bottler and beverage company Embotelladora Andina posted a 9.7% y-o-y decline in its net profits for FY12. The company reported its net profits at CPL87.64bn (US$185.4mn). The results released by Andina were consolidated to take into account Q412 figures of Embotelladoras Coca-Cola Polar. The amalgamated company's sales went up by 19.3% y-o-y to CPL1.172trn (US$2.47bn). In April 2013, Andina announced that it plans to invest US $350mn for the year, which will go towards its Brazilian plant and maintenance work.

Concha y Toro 2013 Profits Hit: In April 2013 local wine major Concha y Toro reported that its full-year net profits for 2012 dropped by 40.5% y-o-y to CLP30.02bn (US$63.5mn). Operating profits for the year were down by 9.1% y-o-y to CLP53.68bn. That said, net sales increased by 6.6% for the year to CLP450.4bn, making up in part for weak domestic demand. Asian sales were particularly strong, up 21% yo- y.

CCU Sees Slight Profit Rise For Q113: Compania Cervecerias Unidas (CCU) posted 0.2% year-on-year (y-o-y) rise in net profits to CLP40.32bn (US$85.3mn) in Q113 (ended March 31). The company's revenue increased 8% y-o-y to CLP304.1bn (US$646mn) during the period. Quarter 1 earnings before interest, taxes, depreciation and amortisation rose 4.7% y-o-y to CLP3.2bn (US$6mn), with the company attributing the marginal increase in its net profits to increased sales over the period ending March 31.

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