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Short Term Challenging for Ambev, but Long Term Bright

Philip Gorham, CFA, FRM (philip.gorham@morningstar.com)

Brazilian brewer Brahma was the first foray into the consumer product manufacturing industry by Jorge Lemann, Marcel Telles, and Carlos Sicupira, the leaders of the private equity group now known as 3G. In 2000, they merged Brahma with Antarctica of Argentina, creating  Ambev ABEV. The company has gone on to roll up brewers throughout Central and South America and holds several monopolylike positions in large markets, including 81% volume share in Argentina, 68% in Brazil, and 61% in Peru.