Turbulent times for beer

It’s a mixed bag of fortunes for the global brewers in our index this month

OUR db index this month reflects the mixed fortunes of global brewers. Once again, Japanese brewers found themselves at either end of the spectrum, with Kirin witnessing a price increase of 24.4% and ITO EN continuing its downward spiral to -49.8%. InBev remained more or less static at 0.5%, which explains its decision to sell Rolling Rock to Anheuser-Busch, which saw a double-digit price increase of 11.2%. Carlsberg’s strategy of focusing on emerging beer markets in Eastern Europe and Asia appears to be paying off and is reflected in the group’s 4.5% price increase. Despite failing to close the Indian Foster’s deal, Heineken saw its price increase by 7.9%.

This month’s graph tracks the progress of the MSCI AC World Beverages, the MSCI World Food Products and the MSCI AC World Hotels, Restaurants & Leisure indices, all of which saw their performance decline in May. Hotels, Restaurants & Leisure was down by 7.6% compared to its peak at the beginning of April; Food Products was down 6.1% since its high at the end of April; and Beverages was down by 5.3% since the index peaked in March. However, performance of all three indices was still up year on year, with Beverages, Food Products and Hotels, Restaurants & Leisure up by 7.6%, 8.8% and 13.4% respectively.    © db June 2006

Methodology:
MSCI builds its indices from the industry level up by classifying securities by country of domicile; determining a Foreign Inclusion Factor (FIF) for each security; classifying securities according to
the Global Industry Classification Standard (GICS®) into: Sectors (10), Industry Groups (24), Industries (62) and Sub-Industries (132); screening securities for size and liquidity; and finally, initiating security selection process to target 85% free float-adjusted market capitalisation for each industry group, within each country.