Ginebra explores premium market prospects

GINEBRA San Miguel Inc., the hard liquor unit of conglomerate San Miguel Corp., is considering increasing its exposure in the premium market as its rivals aggressively move into this space.

Bernard Marquez, president of Ginebra, told reporters following the annual stockholders meeting Thursday that the company would explore options like partnerships and the launch of more premium brands.

Ginebra’s rival, Emperador Inc. of Andrew Tan, has been making waves in the premium market with its high-profile acquisitions of global brands such as Scotch whiskey-maker Whyte & Mackay Group Ltd., in a deal valued at £430 million last year.

Earlier this month, Emperador said it would bid to acquire French cognac maker Louis Royer SAS.

“We are exploring options to participate in that market,” Marquez told reporters.

Some groups have already approached Ginebra for a possible tie-up, but no deal has been closed to date, he said.

While Ginebra is exploring opportunities in this market, its focus remains on the mass market segment, he said.

The company is best known for its flagship Ginebra San Miguel gin, produced since 1834. Today, it corners 90 percent of all gin sales in the Philippines.

According to Marquez, the premium segment is still very small and he doubts that any other brand “will grab a bigger share as the mass market” in the Philippines.

Ginebra earlier reported that revenues in 2014 rose 9 percent to P14.9 billion. It added that variable costs declined, allowing its gross profit margin to hit 27 percent. Ginebra still reported a net loss of P766 million last year, due to the recognition of deferred income taxes in 2011 and 2012.

Marquez said in his message to stockholders that the company this year would “replicate” the previous year’s gains.

We will sustain volume growth “by protecting and further growing our market share,” he said. “We will also continue to introduce new, exciting brands to meet changing consumer needs.”