Miller is the only blot in SABMiller's copybook - Brief Article

Modern Brewery Age, Dec 4, 2002

The SAB side of SABMiller has chalked up strong profits in the most recent period, but Miller continues to lag. Executives at SAB told Britain's Independent that beer sales at Miller had slumped over the summer because of a "lack of management focus."

Graham Mackay, the chief executive of SAB Miller told the paper that "We have a turnaround situation on our hands with Miller."

Mackay added that it would take up to 18 months for the enlarged group to get the U.S. brewer back on track as a strong competitor to Anheuser-Busch.

SABMiller reported that Miller beer volume had dropped 2.4% against a broader 1% increase in the U.S. beer market.

SAB execs said that Miller's management was overly occupied with launching four new malternatives. Two of the drinks--Stoli Citrona and Sauza Diablo--performed badly and may be withdrawn, the execs said.

"We probably overemphasized the introduction of new items, and this took the emphasis away from our own brands," John Bowlin, Miller's chief executive, told the Independent.

SABMiller has said it would refocus its attention on Miller Lite by repackaging its bottles and launching a new advertising campaign in the new year.

Mr Mackay said the integration was progressing "as planned." He said that SABMiller expected to achieve "significantly more" than the planned $50m in annual cost savings by 2005.

But analysts said the group faced a challenge in reversing years of decline at Miller. Still, analysts said that SAB has extensive experience in turning around third world and Eastern European breweries. Nigel Davies, of J.P. Morgan told the Independent that, "Results elsewhere demonstrate the quality of group management to influence and improve results."