28 NOVEMBER 2013 Alcohol advertising tends: Alcohol advertising tends: Corne van Walbeek and Michael Daly

Data Commercial data, “adspend’ collected by AC Nielsen AC Nielsen personnel monitor all forms of media Cost of each advertisement estimated as a function of media, placement, size, duration etc… Data is available monthly from January 1997 – September 2013 (Internet: Jan ) Oct – Dec 2013, estimated using proportional contribution of those months in previous years All data in December 2012 Rands

Total advertising industry: *2013 Figures include estimates for Oct – Dec 2013 *All figures are constant 2012 prices

Media composition of alcohol advertising *2013 Figures are estimated for Oct – Dec

Relative importance of alcohol advertising

Relative share of alcohol categories in total alcohol advertising expenditure

Relative importance of media to alcohol adspend

Key advertisers in 2012 (based on ‘adspend’)

Concentration: Beer

Concentration: Wine

Key Brands: Spirits (2012) 1997

Shares of different alcohol categories in television advertising expenditure

Shares of different alcohol categories in radio advertising expenditure

Shares of different alcohol categories in print advertising expenditure

Shares of different alcohol categories in out-of-home advertising expenditure

Top ten advertised brands of the three largest alcohol companies in South Africa SABMiller brands Average annual advertising expenditure as percentage of total SABMiller advertising expenditure Brandhouse brands Average annual advertising expenditure as percentage of total Brandhouse advertising expenditure Distell brands Average annual advertising expenditure as percentage of total Distell advertising expenditure Carling Black Label21.1%Amstel Lager13.9%Hunters Dry Cider12.8% Hansa Pilsener19.2%Heineken Lager13.8%Savannah Dry Cider9.5% Castle Lite18.3%Windhoek Lager8.9% Richelieu Brandy 7.1% Castle Lager17.2%Bells Whisky8.2%Amarula Cream Liqueur6.0% Castle Milk Stout7.3%J & B Whisky8.0%Three Ships Whisky5.4% Redds Cider6.8% Captain Morgan Spiced Gold Rum 5.5%Klipdrift Premium Brandy5.0% Castle Draught4.6%Johnnie Walker Black Label5.4% Flight of the Fish Eagle Brandy 4.3% Miller Draft Beer*2.3%Strongbow Cider4.6%Klipdrift Export Brandy4.3% Brutal Fruit0.8%Guinness Beer3.7%JC Le Roux Sparkling Wines4.0% Peroni Nastro Azzurro0.6%Smirnoff Vodka**3.5%Oude Meester Brandy3.8% Other1.8%Other24.5%Other37.8%

Television advertising by ‘Advertiser’ over time

Radio advertising by ‘Advertiser’ over time

Share of total television advertising by category

Sponsorship Deals with the advertisement of sponsorship activities Carling Cup, J&B Met etc…

Total expenditure on sponsorship advertising by all industries

Sponsorship advertising by the alcohol industry, by media

MARKET CONCENTRATION ANALYSIS Advertiser Advertising expenditure (R 000's)Market ShareMarket Share Squared SABMiller % Brandhouse % Bavaria Brau % United National Breweries % Brauerei Beck & Co % Awethu Breweries % Cockpit Brewery % Central TLV Dev Board % Coopers SA Ltd % Total advertising expenditure Herfindahl-Hirschman index0.666

Herfindahl-Hirschman indices by alcohol type Beer Brandy Cider Wine0.36 Ready to Drink Liqueur Whisky

Herfindahl-Hirschman indices for beer at the “house” and brand level,

Herfindahl-Hirschman indices for wine at the “house” and brand level,

Comparison to Tobacco: share of tobacco advertising in aggregate advertising expenditure,

Main Findings Alcohol makes a modest contribution to total advertising  Television: 7-8%  Cinema 8-16%  Internet 1.6–2%  Out of Home 4-7%  Print 0.7-1%  Radio 2-3% Television is increasingly important media to alcohol industry Very sharp increase in television advertising in late 2009 (especially for beer) Seasonality & pulsing: Alcohol advertising peaks in November

Main Findings Large increase in advertising of sponsorships since 2010 Sponsorship advertising is primarily on television The alcohol advertising industry is highly concentrated (Particularly for beer and brandy)