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San Miguel Corporation (Philippines)

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San Miguel has comparatively few rivals as the world's most valuable Filipino brand. San Miguel Corporation produces one of the top three beer brands in Asia, as well as the world's single biggest-selling gin by volume. (In Europe, San Miguel beer is produced under license by a separate company, Grupo Mahou San Miguel). It is also the controlling shareholder in a variety of other businesses which together make it the largest publicly listed food, beverage and packaging company in South East Asia. In 2007, it began a major restructuring, selling its Australian food and beverage division, National Foods, to partner Kirin. The Japanese company acquired a 48% stake in the San Miguel brewery business in 2009. Instead, San Miguel has moved aggressively into areas such as oil refining, telecoms and public utilities.


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Brands & Activities

Until recently, San Miguel Corporation has been involved mainly in consumer packaged goods. Increasingly however the board is devoting its energy to diversification into areas such as mining and utilities. Currently there are still three main consumer businesses within the San Miguel Corporation: brewing, spirits and food & beverages.

San Miguel Brewery completely dominates its domestic market in the Philippines, with a market share of around 91%. (Its main competitor is Asia Brewery, which markets the Colt 45 and Asahi Super Dry brands under license). The company has six breweries in the Philippines, one brewery each in Indonesia, Thailand and Vietnam, and four breweries in China, including Hong Kong, where it also the leading brewer. Core brand San Miguel celebrated its 125th anniversary in 2015. It is available in its main form of San Miguel Pale Pilsen, as well as Draft, San Miguel Super Dry, San Mig Light, high strength San Mig Strong Ice and all-malt San Miguel Premium. (In Spain and other European markets, San Miguel beer is produced under perpetual license by a completely separate company Grupo Mahou San Miguel. The two beers share the same lettering but slightly different logo designs). Other Philippine brews include extra strong Red Horse and Cerveza Negra, and the company is also the local licensee for Miller. International brands include Blue Star and Dragon Beer in regional China and Anker Bir in Indonesia.

Until recently, the group also owned Australian premium brewer James Boag. That business was sold to Lion Nathan, an affiliate of Kirin, in 2007. Also that year, San Miguel Brewery was established as a standalone company, and 5% of its stock was floated, in preparation for a full spin-off at a later date. Japan's Kirin Brewery already controlled a 20% stake in San Miguel Brewery, acquired between 2001 and 2005. In 2009, it raised that holding to 48%, buying up most of the company's publicly quoted shares. The remaining shares are still held by San Miguel Corporation. The group said in 2010 that it had turned down an offer from Kirin to take full control.

In 2015 the beer business reported sales of Pesos 82.4bn (approx $1.8bn) and net income of Pesos 13.5bn ($295m). Volumes were 1.5bn litres.

A separate subsidiary, Ginebra San Miguel, is the leader in the Philippine distilled spirits market with 55% local share. Its biggest brand by far is the gin from which it takes its name, also the world's biggest-selling gin, with volume sales some five times higher than Diageo's premium-priced Gordons. Impact Databank estimated volumes of 23m cases in 2015, worth $690m at retail. First distilled in the 1930s it passed through a number of separate owners before becoming part of the San Miguel brewery business in the 1980s. It is now available as both 80-proof GSM Red, or lower strength GSM Blue, as well as in various additional variants. The group also produces a variety of other rums (including Anejo), vodkas (including Antonov) and brandies (including Gran Matador) as well as non-alcoholic drinks under the Magnolia brand, following the absorption of what was previously a separate company, San Miguel Beverages. That company was originally the local licensee for Coca-Cola. The US drinks giant acquired San Miguel's controlling shareholding in 2007 for $590m. San Miguel Corp controls an 80% shareholding in the spirits business. The remaining shares are publicly held. Ginebra San Miguel reported revenues of Pesos 16.6bn ($360m) in 2015.

San Miguel is also a major producer of food products in Asia under the name San Miguel Purefoods. In the Philippines, the group markets processed meats, ready-to-cook meals and dairy products under brands including Magnolia dairy products and ice cream, Purefoods and Monterey fresh and processed meats, partly in a joint venture with US company Hormel. It also has operations in other Asian countries including Vietnam and Indonesia. Group revenues were Pesos 106.9bn ($2.3bn) in 2015.

Several other food and beverage businesses have been sold. In 2004 San Miguel moved aggressively into Australia, acquiring a controlling stake in the country's leading fruit juice marketer, Berri. A year later, it also won a bidding battle (with Fonterra of New Zealand) to acquire Australia's biggest dairy producer National Foods, marketer of Pura, the country's only national milk brand, as well as Big M flavoured milks, and local licensee for Yoplait yoghurt. In 2006, the group bought out Berri's minority shareholders and merged it with National Foods. A year later, however, the entire National Foods business was sold on to Kirin for A$2.8bn. At the end of 2005, after almost two years of negotiations, San Miguel and various investment partners acquired control of Del Monte Pacific, the world’s biggest pineapple grower and canner, and a major juice and foods marketer in the region. San Miguel Corp sold its shares in that business in 2007 to partner NutriAsia.

In 2007, in keeping with its strategy to move into industrial utilities, San Miguel joined forces with Malaysia's state power operator Tenaga Nasional and US investment group Texas Pacific to bid for a 25-year contract to run the Philippines power grid. That offer was not successful, but the group has become involved in numerous other projects in power generation and land development. It acquired a 27% stake in electricity distributor Manila Electric in 2008, followed in 2010 by majority control of Petron Corp, the country's biggest oil refiner and now the single biggest business within San Miguel Corporation, with revenues of Pesos 360bn ($7.9bn) in 2015. It also tied up with Qatar Telecom to launch a new wireless phone network in the Philippines. The group also owns a number of packaging, infrastructure, distribution and other trade-based businesses.


As a result of its move into industrial utilities, the group's overall performance has rocketed since 2009. That year, revenues were Peso 174bn. They jumped to Peso 246bn in 2010 before more than doubling in 2011 to Peso 536bn ($13.0bn). Revenues have continued to rise, peaking at Peso 782bn in 2014. There was a decline in 2015 to Pesos 674bn, largely as a result of the impact of falling oil prices on Petron. Growth has come at a price, though, with net income falling sharply as a result of high interest payments of the debts incurred to expand the business. Net earnings for 2015 were Pesos 12.5bn. Petron alone accounts for more than half of group revenues, and power generation for another 10%.


The company was originally founded in Manila in 1890 as La Fabrica de Cerveza de San Miguel, under royal grant from the King of Spain to be the first brewery not just in the Philippines but in all of South East Asia. It expanded rapidly, exporting to China by 1915, and establishing a local Coca-Cola bottling plant by 1927. In 1948 it built the first brewery in the colony of Hong Kong, and gradually expanded over the following years into various other industries. In 1987 the company acquired a controlling stake in La Tondena Distillers, owners of Ginebra San Miguel and other spirits.

By then, San Miguel Corporation had been one of many businesses acquired during the early 1980s by Eduardo Cojuangco, a former politician and close ally of military dictator Ferdinand Marcos. Following the country's People Power revolution in 1986, Cojuangco's ownership of San Miguel was sequestered by the new government (led by his cousin Cory Aquino) on allegations that it had been acquired illegally. He initially fled the country with Marcos, but later returned to take over what was left of their NPC political party. He ran for president unsuccessfully in 1992. His shareholding in San Miguel was later returned to him, and he was re-elected as CEO and chairman of the company in 1998. Since then he has acquired a further string of businesses, which have consolidated his role as one of the country's most influential but controversial figures.

Last full revision 7th September 2016

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