New Food market report from Business Monitor International: "Spain Food & Drink Report Q2 2014"
Boston, MA -- (SBWIRE) -- 04/10/2014 -- Although consumption will remain a drag on the recovery in 2014, subtracting an estimated 0.1pp from growth (from 1.2pp in 2013), we expect the smaller deduction to reflect the private sector's progress paying down debts. On the household front however, deleveraging has only just begun. Much of the required deleveraging is an overhang from the bursting of the Spain's property bubble, where households are struggling to reduce the huge amount of mortgage debt that weighs on personal finances. This means more sluggish growth for the food and drink sector, while the lower end of the sector will continue to outperform the rest. In line with this, we believe that Dia is one of a select few Western Europe-based food retailers with good near-term growth prospects in the region.
Headline Industry Data (local currency)
- 2014 per capita food consumption = +1.6%; forecast compound annual growth rate (CAGR) to 2017 = +1.8%.
- 2014 alcoholic drink value sales = +1.0%; forecast CAGR to 2017 = +1.3%.
- 2014 soft drink value sales = +1.1%; forecast CAGR to 2017 = +1.4%.
- 2014 mass grocery retail sales = +1.9%; forecast CAGR to 2017 = +1.9%.
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Key Company Trends & Developments
Frozen Fish Firm Pescanova Fighting Liquidation: The vertically integrated Spanish frozen fish company Pescanova is facing crunch talks with a series of banks as it looks to save itself from liquidation following a dramatic fall from grace. Pescanova hit the headlines in 2013 after a forensic audit by Deloitte revealed EUR3.6bn of debts, which was three times the reported amount in the company's financial statements according to the Financial Times. A liquidation would be a high-profile event and one that would not be particularly good for confidence in corporate Spain from overseas investors in particular.
Coca-Cola To Close Four Bottling Plants: US-based beverage giant The Coca-Cola Company (Coke) is reportedly considering closing four of its bottling plants, including in the Balearic Islands, south-eastern Alicante, north-western Asturias region and near Madrid in Spain, affecting around 1,250 jobs. The company aims to restructure to boost efficiency and competitiveness and to avoid duplication of products, the company said. The company stated that it would make all possible efforts to employ at least 500 staff from closing plants.
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