Ginebra to venture into new products

MANILA, Philippines - The liquor unit of diversified conglomerate San Miguel Corp. (SMC) is venturing into new products to boost its earnings in the long term even as its operating income returned to black in the first quarter.

Ginebra San Miguel Inc. has benefited from price adjustments and higher sales in the first three months, a trend that will likely continue for the rest of the year, company officials said yesterday.

“Ginebra is coming out with new products like brandy and mixed drinks,” said SMC president and chief operating officer Ramon S. Ang. To date, Ginebra markets brands such as Ginebra gin, GSM Blue, GSM Light, Gran Matador brandy and Antonov Vodka.

The company is already number one in terms of hard liquor, driven by its gin products, but Ginebra plans to re-launch its brandy line while studies on mixed drinks that offer lower alcohol contents are close to being completed, Ang said.

“The new products will take some time to develop. We are now concentrating on existing products like Ginebra Red and Ginebra Blue that are showing good results,” Ang said, adding that the market’s preference is shifting to products with low alcohol content.

In the first quarter, Ginebra’s operating income hit P44 million, turning around from a P390-million loss in the same period last year, said Ginebra president Bernard D. Marquez.

Sales volume rose 10 percent in the first three months of the year while revenues jumped 21 percent to P3.6 billion, “driven by the growth of the Ginebra brand,” Marquez said. The company also benefited from higher selling prices and the recovery in sales, with flagship brand Ginebra increasing its market share from a year ago.

“We expect the same growth rate to be sustained for the rest of the year,” Marquez said.

Ang said Ginebra will likely record a better performance this year as it focuses on growing its business.

Republic Act 10351, the “sin tax law,” took effect last year, imposing higher excise tax on tobacco and alcohol products that aims to increase the government’s revenues while discouraging heavy consumption of cigarettes, beer, liquor, wine, and other tobacco and alcohol products.