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Brazil Brand Value Jumps 42%
But Petrobras again drops out from top 50 brands in Latin America.
BY LATINVEX STAFF
The value of brands in Brazil jumped 42 percent, inching the country closer to Mexico as Latin America’s top market for brand value, according to the 2018 BrandZ ranking from WPP and Kantar Millward Brown.
Meanwhile, Brazilian state oil company Petrobras (the largest Latinvex 500 company) has again been knocked off the ranking of Latin America’s top 50 brands. Its brand value now stands at $788 million, a 10 percent increase from last year but not enough to make the top 50 ranking. And a far cry from the $10.6 billion it had in 2012, when it was the most valuable brand in Latin America. The Petrobras brand has suffered from a major corruption scandal – the largest ever in Latin America, although its current CEO has garnered praise for his turnaround efforts. (See CEO of the Year: Pedro Parente, Petrobras).
Brazil’s brand value jumped from $31.3 billion last year to $44.4 billion this year. Meanwhile, Mexico’s brand value this year of $45.9 billion was only 3 percent higher than last year.
“Substantial growth in the value of Brazilian brands – up 42 percent – reflected a more stable economy and low inflation in 2017, resulting in a rise in consumption, seen mainly in Retail (34 percent growth in brand value) and Financial Institutions (up 48 percent),” the report says.
All in all, the total value of Latin American brands grew 18 percent to $130.9 billion.
Beer, food and personal care dominate, with a combined value of $48.7 billion, followed by financial institutions, with $27.8 billion, and services, at $25.9 billion.
“Brands in the Financial Institutions category are facing an increasing threat from FinTechs - the innovative and technological way of delivering financial services,” warn Eduardo Tomiya, Managing Director for Latin American Region for Kantar Consulting, and Kantar Consulting Director Roberto de Napoli. “However, despite this threat, very well-positioned brands like the Brazilian banks Bradesco and Itaú, and the Chilean bank Banco de Chile, are still very strong brands in consumers’ minds, with strong attributes aligned with local needs, generating great brand values. In addition, these banks have also launched digital platforms, in line with the new market reality.”
Beer brands Corona and Skol take the top slots in the 2018 BrandZ ranking in Latin America, followed by financial institutions Bradesco and Itaú. Brazilian TV giant Globo is the highest new entry.
There were eight new entries in the Top 50 this year: Globo (no. 8), Ypé (no. 33), Azteca (no. 37), Embratel (no. 40), Lojas Americanas (no. 46), Net (no. 48) and Porto Seguro (no. 50). All are from Brazil, except Azteca which is based in Mexico. Communications provider Tigo Une was formed from the merger of Tigo and Une in Colombia, which were previously listed separately, and is now No 27.
"Disruption has already spawned a new wave of brands across Latin America and while they have not yet displaced some of the more established names, rising internet access and mobile uptake is giving them greater market access. The power of a strong brand combined with its own digital platform will be required to future proof many of today's big players," said Kantar's Gabriel Castellanos.
US LAWMAKERS SUPPORT ARGENTINA OECD BID
US Representative Eliot L. Engel (D-NY), Ranking Member of the House Committee on Foreign Affairs, and Representative Ed Royce (R-CA), the Committee’s Chairman, released a statement in support of Argentina’s bid to be a member of the Organization for Economic Co-operation and Development (OECD).
“As the OECD membership expands, we strongly support Argentina’s bid to join the organization,” they said in the statement. “In recent years, the country has enacted significant economic reforms and again emerged as a South American power player. With its highly educated population, diverse economy and vast natural resources, Argentina’s accession to the OECD would be a win for the country, the region, and the current OECD membership. We look forward to continuing to work with President Macri as Argentina increases its leadership role in the global economy.”
FITCH: PARAGUAY CREDIT OUTLOOK REMAINS POSITIVE
Paraguay is unlikely to see significant changes to its economic policy framework following the general election held on April 22, says Fitch Ratings.
“We believe that President-elect Mario Abdo Benitez's new government will maintain the previous administration's strong fiscal discipline,” the ratings agency says in a statement. “Passage of the 2019 budget in line with the Fiscal Responsibility Law (FRL) and without significant congressional amendments will be a key test for fiscal policy and the executive-congressional relationship.”
Abdo Benitez's focus on raising revenues to increase spending indicates that he intends to maintain fiscal discipline going forward. The president-elect's key pledges include reforming the judiciary, widening the tax base, reducing tax evasion and raising education spending to 7 percent of GDP from 4.5 percent. Efforts to improve the judiciary and efficacy of public sector institutions could eventually boost low governance indicators, which would help to lift a key rating constraint.
Fitch Ratings revised the Rating Outlook on Paraguay's 'BB' rating to Positive last December. Policy continuity under the new administration with low fiscal deficits and debt levels, improved governance indicators and sustained solid rates of GDP growth with less volatility could lead to improved creditworthiness.
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