Life should be sweet for SABMiller. The brewer’s dominant position in South Africa makes it top landlord when the World Cup rolls into town next month, complete with thirsty fans. SABMiller reckons it will sell an additional 30m beers during the course of the tournament. But that is relatively small beer – maybe 4-6 per cent of South African demand – and far too incremental to titillate the groups’ notoriously sober management.

Then again, they have better reason than most to know that big parties are not without problems. Yes, emerging markets, everyone’s biggest fiesta, mostly kept their nerve through the crisis. SABMiller’s heavy exposure to these fast-growing markets, responsible for around 80 per cent of earnings before interest, tax and amortisation, goes some way to justifying its premium rating. The brewer delivers on growth. Group revenue rose 4 per cent to $26.35bn. In Latin America, the biggest profit engine, ebita was up 17 per cent to $1.4bn on an organic constant currency basis.

But, as Vodafone has discovered, emerging markets have tripwires. SABMiller’s ebit margins narrowed in a couple of big markets. Revenue hungry governments spoil the party: tax hikes were imposed over the bulk of SABMiller’s footprint last year, with India and Colombia especially badly hit. Tax-bloated price tags quickly slake drinkers’ thirsts and make it harder for brewers to impose their own price increases. New markets require bigger budgets. Total cost of goods sold rose 3 per cent last year; marketing spend in South Africa was up some 50 per cent. The brewer has trimmed its capital expenditure, down from a run rate of about $2bn-$2.5bn to $1.4bn this year. Thanks in part to currency fluctuation, input costs should be flat or slightly lower. Even so – and World Cup notwithstanding – management is wise to retain a cautious tone.

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