IN an industry that is dominated by two players Carlsberg Brewery Malaysia Bhdand Guinness Anchor Bhd (GAB) one player’s gain is the other’s loss, amid a competitive malt liquor market.

Last week, GAB announced that its net profit grew 42.6% to RM55.2mil for its first quarter ended Sept 30, compared with RM38.7mil a year earlier, on higher sales and bigger share of the domestic malt liquor market. Its revenue grew 21.3% year-on-year to RM444.6mil.

GAB managing director Charles Ireland credited the company’s impressive performance to a combination of factors, which included increased share of the malt liquor market and timing differences of trade purchases compared with a year earlier.

Ireland: ‘Tiger Beer’s exceptional growth means it may now be the largest beer brand in Malaysia, in terms of volume and sales value.’

He said the company’s growth was partially at the expense of its rival as it captured additional market share in the first quarter.

“Tiger Beer‘s exceptional growth means it may now be the largest beer brand in Malaysia, in terms of volume and sales value.Guinness and Heineken have also shown impressive double-digit growth,” Ireland said.

GAB expects to maintain its net margin at the level achieved in its financial year ended June 30, 2011. In fiscal 2011, GAB posted a net margin of 16.3%. In the first quarter, its net margin was 17%.

Ireland said GAB expected to see some fluctuation in its margins throughout the year due to seasonal distortion, adding that the company’s margins were usually lower during the Chinese New Year season due to sales.

Ireland said GAB would continue to invest in its brands and improve operational efficiency, as well as talent.

Carlsberg Malaysia managing director Soren Ravn, meantime, said the company’s market share had been relatively stable at about 42% over the last 12 months.

He pointed out that Carlsberg Malaysia had been gaining traction in the premium beer segment, chalking up additional market share as it took the battle to its competitor.

,B>Ravn: ‘Three years ago, we had less than 5% market share in the premium beer segment. We are looking at about 20% market share by year-end.’

“Three years ago, we had less than 5% market share in the premium beer segment. We are looking at about 20% market share by year-end,” he said, adding that Carlsberg Malaysia’s premium brands such asHoegarden and Kronenbourg had been doing very well.

Ravn said Carlsberg Malaysia tracked its products every month in three areas: consumer, trade and industry. In terms of consumers’ perspective, he said Carlsberg had a strong brand equity and presence.

According to Nielsen data, which track consumption at supermarket and hypermarket, Carlsberg Malaysia and its competitor have market shares of 47% and 37%, respectively.

“We are not too transfixed by market share numbers, but (focused on) the value of the market that would eventually drive our profit,” Ravn said.

He said Carlsberg Malaysia had over the past few years moved from being just a single-brand company to one with a portfolio.

Ravn opined that competition was good for the industry as it would keep the players on their toes.

The competition, he added, had driven some of the industry’s growth and that beer players not only had to compete with each other, they also faced competition in the non-alcoholic drink market.

“It is important for the industry to create an exciting platform (to drive the industry),” he said.

Ravn said volume had been pretty flat this year but believed that there was still room for growth.

Given the success of its premium brands, he said Carlsberg Malaysia might brew Kronenbourg locally which would help it avoid import duties.

“We’ll see. Kronenbourg is doing very well. It’s a good opportunity for us,” he said.

Going forward, Ravn said the company would be busy gearing up for year-end marketing efforts as well as finalising the Chinese New Year promotion starting next month.

“We will also be having a lot of exciting events. We are also gearing up for the Euro 2012 as Carlsberg is the main sponsor. It will be a very exciting time ahead,” he said.

Carlsberg Malaysia is expected to announce its third quarter ended Sept 30 financial results this week.

Meanwhile, analysts said that since excise duties were not increased in Budget 2012, industry volume should continue to grow at a low single digit, further boosted by events like the Euro 2012.

They said an effective marketing plan may help enlarge market share.

While the pie isn’t getting much bigger, analysts said both players would look at ways and means to grow their businesses and boost margins to grab a bigger slice of that pie.–The Star