(Corrects headline and first paragraph to state that Quilmes has observed increased sales of 8 percent in overall Argentine beer market so far this year, not that Quilmes expects its own sales to grow 8 percent in 2017)
By Eliana Raszewski
MAR DEL PLATA, Argentina, Oct 12 (Reuters) - Beer sales in Argentina have grown 8 percent so far this year after falling in 2016 amid a recession in Latin America’s No. 3 economy, an executive at Argentina’s largest brewery Quilmes, owned by Anheuser Busch Inbev NV, said on Thursday.
The sales recovery comes amid a broadly improving economic picture, Quilmes corporate affairs manager Juan Francisco Mitjans told Reuters on the sidelines of the Argentine Business Development Institute’s (IDEA) annual conference in the coastal city of Mar del Plata.
After falling 2.2 percent in 2016, the economy expanded 2.7 percent year-over-year in the second quarter of this year. Inflation, while stubbornly high at 24.2 in the twelve months through September, is down from around 40 percent last year, spurring the consumption rebound helping companies like Quilmes.
Eighty-three percent of Argentine businesspeople think their sales will increase over the next six months, while 86 percent believe the country’s economic situation will improve in that time period, according to a poll of 278 respondents by consultancy D’Alessio IROL presented at the IDEA conference.
That optimism comes as President Mauricio Macri has implemented several market-friendly reforms since taking office in December 2015 following a decade of populist rule. Nonetheless, a tax reform and infrastructure improvements are still needed to make the country more competitive, Mitjans said.
“The logistical cost of transporting products around the country is much higher than our regional neighbors,” Mitjans said. “Building highways and roads to improve productivity is central for our business.”
Quilmes has already executed 25 percent of its 26.8 billion-peso investment plan for 2016-20, he added.
The beer market in Argentina has room to grow given that per capita consumption is just 41 liters (10.83 gallons) per year, below the regional average of 60 liters, Mitjans said. (Writing by Luc Cohen; editing by Diane Craft)