AMBEV S.A. current report, Q3 FY2021

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Business Context and Reporting Period

This Form 6-K filing by AMBEV S.A. (Ambev) covers the month of August 2021. The report serves as a disclosure of related party transactions required under CVM Instruction No. 480/09. The filing details a specific procurement agreement between Ambev's Canadian subsidiary, Labatt Brewing Company Ltd., and Anheuser Busch Packaging Group Inc. (AB Package), a company controlled by Ambev's indirect controlling shareholder, Anheuser-Busch InBev SA/NV (AB InBev).

Key Financial Metrics

The filing does not provide consolidated revenue, profit, cash flow, margins, debt, or liquidity metrics for Ambev. The only financial data disclosed relates to the threshold for reporting related party transactions:

  • Transaction Threshold: The filing identifies related transactions involving an amount higher than R$50,000,000.00.
  • Pricing Mechanism: Payments for aluminum cans are determined based on prices and costs practiced in the international market.

Material Changes

The document does not report material changes in financial performance compared to prior periods. It confirms that the transactions are conducted under terms agreed during 2020 and continue to be executed in conformity with corporate approvals.

Guidance, Outlook, and Management Commentary

Management Commentary:

  • Strategic Justification: The acquisition of cans supports Labatt's long-term commercial strategy to expand the scale of alcoholic beverage categories in Canada.
  • Operational Synergies: Transactions are integrated with the AB InBev group's production, distribution, and logistics network, adding value through synergies.
  • Arm's Length Basis: Management asserts that terms are similar to those practiced with independent third parties and were analyzed to ensure adequacy on an arm's length basis.
Governance and Approval:
  • The Related Parties and Antitrust Conducts Committee analyzed and recommended the transactions.
  • The Board of Directors approved the transactions, with related board members recused from discussions and resolutions.
  • AB Package and its managers did not participate in Labatt's decision-making or negotiations.
Risks and Contingencies:
  • The filing addresses potential conflicts of interest inherent in related party transactions, mitigated by strict adherence to the Company's Related Parties Transactions Policy and Bylaws.

Important Facts for Investor Verification

  • Verify the total volume and value of aluminum can purchases from AB Package by Labatt to confirm if they exceed the R$50,000,000.00 reporting threshold.
  • Confirm that pricing for these cans aligns with international market rates for independent third-party transactions.
  • Review the minutes of the Related Parties and Antitrust Conducts Committee and the Board of Directors to ensure proper recusal of related members.
  • Assess the impact of these related party transactions on Labatt's cost of goods sold and overall margin in the Canadian market.