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                                                                     Report 2004
                                                     SABMiller plc
SABMiller plc Corporate Accountability Report 2004
A story of growth                     From its South African origins,
SABMiller has become one of the world’s largest brewing companies.
With operations in over 40 countries, it has more beer brands in the
world’s top 50 than any other brewer and it ranks among the top three
brewers in more than 30 countries. Every minute of every day, consumers
the world over drink an average of over 46,000 pints of SABMiller beer.
      SABMiller is passionate about brewing. From local beers steeped
in tradition to brands that are recognised around the world, the company’s
ambition is always to offer an outstanding product. Its quality is backed
by some of the most efficient brewing and distribution operations in the
industry – not to mention its long and successful record of market
research, brand development and superb marketing in all corners of the
world. Its success also lies in the way it conducts its business – with
respect for partners and employees and a desire to do the best for the
local community.
      SABMiller’s history is one of exceptional growth and returns to
shareholders. With its global footprint, strong portfolio of brands and
spread of operations in both mature and developing markets, SABMiller
is well placed to continue its growth.


ACCOUNTABLE BUSINESS                 1   GOVERNANCE                     26
ACCOUNTABILITY REPORTING             4   ECONOMIC REVIEW                29
SABMILLER TODAY                      6   SOCIAL REVIEW                  33
KEY ISSUES                               ENVIRONMENT REVIEW             39
TACKLING HIV/AIDS                   15   CONTACTS                       48
                                                                                       SABMiller plc 1

At SABMiller we seek to meet our goal of creating long-term value for our
shareholders, while living out our values and business principles throughout
our operations.
     This corporate accountability report shows how we as a group manage the
challenges that inevitably arise, day-to-day around the world, as we seek to live out
these ideals. We call it ‘accountability’ because we recognise companies have a duty
to account for their performance, non-financial alongside traditional accounting – to
our owners, our employees, those we trade with, the governments who regulate and
tax us, and the wider community too.

Highlights for the year to 31 March 2004
    Strengthening our activities relating to alcohol responsibility through the
    development and adoption of new group-wide policies and a detailed code
    on marketing.
    More efficient water use and good progress on reducing other environmental
    impacts in most business divisions.
    Action on HIV/AIDS: further implementation of our comprehensive approach
    for employees and direct dependants.
    Continued success in business, with increased cash value added: governments
    remain the largest beneficiary, receiving nearly half the wealth we create.
    Sustainable investment: ranked as beverage sector leader by the Dow Jones
    Sustainability Index and included in the FTSE4Good Index and the JSE
    Securities Exchange’s new Socially Responsible Investment Index.

Looking forward
We will continue to build on the sound programmes already in place, expanding our
activities into the supply chain and local communities, while strengthening external
stakeholder engagement at local and international levels.
2 SABMiller plc


Focusing on ‘                                                                                This year’s report
                                                                                           highlights a select
                                                                                           group of key issues,
                                                                                           where our impacts

key impacts                                                                                are most apparent
                                                                                           and our responsibility
                                                                                           to act is greatest

                                                                                           Investment Index. This follows their
                                                                                           independent assessment of our policies,
                                                                                           performance and reporting on
                                                                                           environmental, economic and social
                                                                                           sustainability, as well as corporate
                                                                                           governance practice.
                                                                                               Last year, I was instrumental in
                                                                                           convening a discussion among a group
                                                                                           of directors and chief executives of
                                                                                           leading international corporations in
                                                                                           London, to discuss how best to get
                                                                                           the balance right between social
                                                                                           responsibility and commercial
                                                                                           competitiveness. While each industry
                                                                                           spoke of different challenges, a common
                                                                                           concern that emerged was the
                                                                                           appropriate role of business in society,
                                                                                           in particular how to co-operate
                                                                                           with governments while retaining
                                                                                           commercial independence.
                                                                                               I am, with the rest of the board,
                                                                                           resolved that SABMiller should continue
                                                                                           to be open, and to listen and where
This is our seventh annual corporate         cross-section of our own managers and         possible to act on what stakeholders tell
accountability report, the third since       employees. As our overall performance         us. So please study this report and let
I became chairman of the corporate           improves, it is right for us to concentrate   us have your reactions.
accountability and risk assurance            on those issues where our impact
committee (CARAC). It covers the period      is greatest.
1 April 2003 to 31 March 2004 and                 My job as a non-executive director
should be read alongside our annual          and chairman of the CARAC is both to
report for a complete picture of the         bring an outside perspective and to lead
business during this time.                   the governance arrangements that ensure
    This year’s report highlights a select   we perform as a responsible business,
group of key issues, where our impacts       while pursuing our goal of sustained          Robert Fellowes
are most apparent and our responsibility     commercial success. An important part         Senior non-executive director,
to act is greatest. These include, among     of the CARAC’s role is to listen to what      SABMiller plc and CARAC chairman
others, the social aspects of alcohol        our stakeholders tell us and to assess
consumption, action on HIV/AIDS,             how we can best integrate this into our
especially in southern Africa, and           business processes.
responsible management of water                   So we were especially pleased
resources. This approach responds            to learn, just as we were finalising this
to feedback we have received on              report, that the JSE Securities Exchange
previous reports and to the views of         South Africa has included SABMiller plc
stakeholders whom we consulted last          in the 51 companies selected on merit
year. That consultation also included a      for its new Socially Responsible
                                                                                                                         SABMiller plc 3

                                               CHIEF EXECUTIVE’S REVIEW

                                               Meeting the
It’s now five years since we moved our
primary stock exchange listing to London
– a good time to reflect on how far our
own company has travelled, and on the
challenges that still lie ahead.
     From our roots over a hundred years
ago in South Africa, we have now grown
to be one of the top brewing companies
worldwide. Continued success requires
us to balance the immediate demands
of the market with our responsibilities
to stakeholders and to the long-term
sustainability of the business, just as we
have done throughout our history.
     Some of the challenges we face are
common to all international businesses,
such as making every effort to source in
country and to build local management
talent. But many are specific to our
industry, such as responsible marketing
of alcohol and care for natural resources,
especially water.
     Other challenges arise as a
consequence of our African roots and           stakeholders and adapting our approach       That said, this report not only highlights
the type of markets in which we operate        to corporate social investment.              some of our successes, it also seeks to
today. One example is our continued                Given the specific nature of the          identify where we have more progress to
action to tackle the threat to our             challenges I have outlined, it is hard for   make. Thus the report aims to present a
employees, posed by the HIV/AIDS               us to follow a ‘one size fits all’ external   balanced understanding of the business
epidemic in Africa. Another is to              reporting framework. To assist those         and its future sustainability.
demonstrate high standards of                  stakeholders for whom it is important,
governance and ethical behaviour               we have again prepared this report in
throughout our operations, particularly        accordance with the 2002 Global
in emerging markets.                           Reporting Initiative Guidelines. However,
     While SABMiller is an international       to present a complete picture, we have
company, we are in fact a very devolved        gone further by focusing on a number
and local business. As a consequence,          of key issues which we believe are of        Graham Mackay
much of what we do to help local               particular importance to the business.       Chief executive
communities takes place at a grass roots           Looking back, as anniversaries
level, out of the limelight. We believe that   inspire one to do, I can see clear
this is the most effective approach.           evidence of the beneficial impacts we are
However, we are sensitive to changing          having, especially in developing markets,
societal needs and the requirement for         where we have not only turned round
us to evolve our approach and support          new acquisitions economically but also
to recognise this. In South Africa,            improved their environmental impact and
particularly, we are talking to                brought benefits to society as a whole.
4 SABMiller plc


In SABMiller, we are committed to achieving sustained commercial success
and growing our shareholder value. We do this not just by meeting the
aspirations of our customers through quality products and services, but also
by operating in a socially responsible manner and by sharing the wealth and
opportunities that the business generates among our stakeholders.
    In doing this, we seek to live out our values and to follow a set of guiding
principles and corporate policies. SABMiller is operationally very decentralised,
so these core statements guide our local companies as they run their
businesses in the light of their own circumstances and the needs and views
of their stakeholders. This accountability report provides a detailed account
of the corporate standards we set and how we perform against them.

Our approach
Operating in a socially responsible manner means that ultimately the business has a
long-term viable future in a world that has a sustainable balance between economic,
social and environmental aspects. SABMiller’s approach to sustainable development
comprises four main commitments:

       To work towards the goal of sustainable development that is inherent in our corporate
       values and guiding principles.

       To act on these commitments where we have direct responsibility, and where we do not
       have control, to exercise our influence.

       To engage with our stakeholders to form mutually beneficial and enduring relationships.

       To report how we are living up to these commitments, integrating them into our business
       strategies and operations, managing our key impacts and measuring our performance.
                                                                                                                       SABMiller plc 5

Reporting scope                                External assessment                         Impact areas
Our approach to accountability reporting       Following a systematic corporate            This is our seventh annual accountability
is to include all businesses where             sustainability assessment conducted by      report. During the year under review,
SABMiller has day-to-day management            Dow Jones in 2003, we were rated as         we have consulted a cross-section of
control or influence, subject to a              the leading company in the beverage         opinion leaders in our major markets and
two-year exemption for operations newly        sector and as being among the top 10%       also conducted a limited internal review
acquired or built. For this report, our        sustainability companies in the world.      to identify key accountability concerns
Angolan bottling companies are included        The Dow Jones Sustainability Index is       and to find how best to continue
for the first time. China Resources             based on the belief that sustainability-    providing an effective account of our
Breweries, Ltd is included to the extent       driven companies create long-term           progress in the light of changing
that our associate has been able to            shareholder value by harnessing the         expectations. In this report we have
report on aspects of accountability. The       potential for sustainable products,         maintained our approach in publishing
acquisition of Birra Peroni in Italy and our   while avoiding or reducing sustainability   a broad spread of performance data
new joint venture in India, fall within the    costs and risks.                            and trends, on economic, social and
exemption period and are excluded.                 The JSE Securities Exchange South       environmental impacts which are relevant
Southern Sun Hotels and Gaming group,          Africa has included SABMiller in its        to our activities. In addition, this year
which was included in previous reports,        new Socially Responsible Investment         we have provided an in-depth focus
was partially disposed of in March 2003        Index, based on an assessment of our        on six of our major accountability
into a joint venture controlled by Tsogo       policies, performance and reporting on      challenges to demonstrate how we
Investments. These operations are,             environmental, economic and social          are managing these.
therefore, not included.                       sustainability.
                                                   SABMiller also continues to be
                                               included in the FTSE4Good Index series,
                                               having been assessed as meeting globally
                                               recognised corporate responsibility
                                               standards. We are included as a member
                                               of the Global and European benchmark
                                               indices and also the UK tradable index.

Key accountability challenges:

  p8 Promoting alcohol                          p12 Reducing our environmental             p15 Tackling HIV/AIDS
     responsibility                                 impact

  p19 Benefiting local economies                 p22 Engaging with communities              p24 Managing our partnerships
6 SABMiller plc

SABMiller today

North America                                          Central America                                      Europe

Total number of breweries:                8            Total number of breweries:                      2    Total number of breweries:                   18
Total brewing capacity (hls 000s):   59,829            Total brewing capacity (hls 000s):          2,650    Total brewing capacity (hls 000s):       35,992
Total volumes sold (hls 000s)                          Total number of bottling plants:                6    Total volumes sold (hls 000s)
    – Lager:                         47,258            Total bottling capacity (hls 000s):        12,183        – Lager:                             30,925
    – Carbonated soft drinks (CSDs):     70            Total volumes sold (hls 000s)                            – Other beverages:                       97
Average number of employees:          5,696                – Lager:                                1,839    Average number of employees:             10,182
                                                           – CSDs:                                 6,031
Miller Brewing Company (Miller), our North                 – Other beverages                                We are one of Europe’s largest brewers, with
American subsidiary operation, is the USA’s                  (water and juices):                   2,643    wholly or majority owned operations in the
second largest brewer. Founded in 1855 and             Average number of employees:                7,225    Canary Islands, Czech Republic, Hungary,
based in Milwaukee, Wisconsin, Miller was                                                                   Italy, Poland, Romania, Russia, and Slovakia.
responsible for innovations such as Miller Lite,       Our presence in Central America is through a         In most of our markets we are either the largest
which created the beer industry’s low-calorie          subsidiary, Bevco, which operates in the beer        or the second largest brewer by market share.
segment and is now one of the 10 largest beer          and soft drinks markets in El Salvador and                 Our European brands include the Czech
brands in the world*, and Miller Genuine Draft,        Honduras. Through Bevco, we have 95%† of             Republic’s Pilsner Urquell, generally regarded as
which was the first cold-filtered beer.                  the beer markets in both countries and, through      the original golden beer, and the major Italian
      Miller has eight breweries in the USA,           an exclusive agreement with The Coca-Cola            beer, Nastro Azzurro, which are two of the
ranging from the ‘niche’ breweries, which              Company (TCCC), almost 65%† of the soft              group’s international premium brands.
produce ‘specialty’ beers such as the                  drinks markets in El Salvador and in Honduras.
Leinenkugel brands in small quantities, to             To support its core operating businesses,            Brands include:
its largest brewery at Trenton, Ohio, which            the company also owns packaging interests            Pilsner Urquell, Nastro Azzurro, Miller Genuine
produces the equivalent of ten million bottles         and over 16,000 acres of sugar plantations           Draft, Tyskie Gronie, Dreher, Lech, Dorada,
or cans of beer per day. Overall, the company          in Honduras.                                         Gambrinus, Arany Ászok, Debowe Mocne,
has over 5,600 employees, the majority of                                                                   Peroni, Köbányai Sör, Velkopopovicky Kozel,
                                                                                                                                             v    v
whom are based in the Milwaukee area.                  Brands include:                                      Keller, Radegast, Raffo, Redds, Saris,
                                                       Pilsener, Bahia, Golden Light, Suprema, Regia        Smadny Mnich, Timisoreana, Tropical, Ursus,
Brands include:                                        Extra, Miller Genuine Draft, Port Royal, Imperial,   Würhrer, Try Bogatyrya, Zolotaya Bochka
Miller Lite, Miller Genuine Draft, Miller High Life,   Salva Vida, Coca-Cola, Sprite, Tropical
Milwaukee’s Best, Pilsner Urquell, Foster’s,
SKYY Blue                                              † AC   Nielsen 2003

* Canadean   2003

                                                       Central America
North America                                          2 breweries                                          Europe
8 breweries                                            6 bottling plants                                    18 breweries
1 country                                              2 countries                                          8 countries
Countries where SABMiller has production facilities
                                                                                                                                              SABMiller plc 7

Africa & Asia                                         South Africa – Beer                                 Other Beverage
Total number of breweries3:                    46     Total number of breweries:                      7   Total number of bottling plants:               10
Brewing capacity (hls 000s):               55,921     Total brewing capacity (hls 000s):         30,598   Total bottling capacity (hls 000s):        17,471
Bottling plants:                               11     Total lager volumes sold (hls 000s):       25,261   Total volumes sold (hls 000s):             13,227
Bottling capacity (hls 000s):              10,075     Average number of employees:                5,202   Average number of employees:                3,817
Total volumes sold (hls 000s)
    – Lager:                               32,492     Our brewing operations in South Africa are          Consists of a 74% interest in Amalgamated
    – CSDs:                                 3,879     managed through our wholly owned subsidiary,        Beverage Industries Ltd (ABI), the leading
    – Other beverages                                 The South African Breweries Ltd (SAB Ltd).          soft-drink business in the SABMiller group,
      (water, wine and spirits,                            Our South African beer business, which         and the largest producer and trade marketer
      traditional beer):                   10,166     was founded in Johannesburg in 1895 and             of The Coca-Cola Company brands in Southern
Average number of employees:                7,236     currently has over 97% of the South African         Africa; a 100% interest in Appletiser (Pty) Ltd,
                                                      market, was SABMiller’s original brewing            the international producer of non-alcoholic
Our Africa & Asia region covers the African           company. Today SAB Ltd operates seven               sparkling fruit juices; and a 30% equity
continent (with the exception of South Africa),       breweries in South Africa, including Newlands       accounted interest in Distell Group Ltd, a
China and India. In Africa, we have brewing,          Brewery, which is South Africa’s oldest, Alrode,    leading South African distributor of wines
beverage or financial interests in 29 countries,       the largest brewery in the Southern hemisphere      and spirits.
including operations in 17 countries through          and Ibhayi brewery, which is one of the world’s          In turn, ABI (which ranked among the top
our strategic alliance with the Castel Group.         most modern.                                        20 companies listed on the Johannesburg
     In China, our joint venture, China Resources          To support SAB Ltd’s production needs,         Securities Exchange, South Africa in 2003)
Breweries, Ltd, is one of China’s leading             SABMiller also has wholly owned interests           owns 32% of Coca-Cola Canners of Southern
brewers. We also have an interest in Harbin           in maltsters through Southern Associated            Africa (Pty) Ltd.
Brewing Group Ltd in north east China through         Maltsters (Pty) Ltd, and in hop farms through
a 29.4% stake in the business which we are in         South African Breweries Hop Farms (Pty) Ltd.        Brands include:
the process of selling.                                                                                   Coca-Cola, Coca-Cola Light, Vanilla Coke,
     Our presence in India is through the Shaw        Brands include:                                     TAB, Sprite, Sprite Zero, Fanta, Lemon Twist,
Wallace Breweries Ltd joint venture, which            Castle Lager, Castle Lite, Castle Milk Stout,       Sparkling Grenadilla, Sparletta, Stones,
we are in the process of completing.                  Hansa Pilsener, Carling Black Label, Sterling       Schweppes Just Juice, Appletiser, Grapetiser,
                                                      Light, Brutal Fruit, Redds, Miller Genuine Draft,   Milo, Play, Bibo, Minute Maid, Bon Aqua,
Brands include:                                       Amstel, Pilsner Urquell                             Valpré, Nestea
Castle Lager, Castle Milk Stout, Hansa Pilsener,
Kilimanjaro, Safari, Chairman’s ESB, Club Pilsener,
Nile Special, Eagle (clear sorghum), Mosi, Rhino,
Ngola, Chibuku (sorghum), Golden Pilsener,
St Louis, Club, 2M, Manica, Laurentina, Knock
Out, Snow (also called Snowflake), Blue Sword                                                                Notes

                                                                                                               For consistency, this presentation reflects the
                                                                                                               SABMiller annual report data. See page 5
                                                                                                               for the scope of this accountability report.
                                                                                                            1. Number of breweries, bottling plants, brewing
                                                                                                               and bottling capacities as at 7 June 2004 and
                                                      South Africa – Beer                                      are based on the definitions on page 25 of the
Africa                                                7 breweries                                              annual report. Total volumes sold and average
                                          Asia                                                                 number of employees are for the year ended
14 breweries                                                                                                   31 March 2004.
10 bottling plants               32 breweries         Other Beverage                                        2. Employee figures exclude associates.
29 countries                   1 bottling plant       Interests                                             3. Excludes 10 breweries in India, which are
                                                                                                               classified as a fixed asset investment for
(17 jointly with Castel)           2 countries        10 bottling plants                                       accounting purposes, and 29 sorghum
                                                                                                               breweries in Africa.
00/00 SABMiller plc

                                                                                          An SAB Ltd billboard used for promoting the
                                                                                            responsible use of alcohol in South Africa.


SABMiller has long sought to promote      In many different cultures around the       consumption by those whose total
the responsible use of its products and   world, alcohol has long played an           consumption may not be excessive.
to combat abuse and misuse. As we         important part in social life and               Our overall objective, as contained
have expanded into a global brewer,       community celebrations. The responsible     in the company’s new Alcohol Manifesto,
so we have reviewed and consolidated      consumption of alcohol beverages            has three elements:
our approach to addressing concerns       by those not at risk is, we believe,
around underage drinking, and drinking    compatible with a balanced and              •     To promote responsibility in the use
and driving in particular. This year we   healthy lifestyle.                                of beverage alcohol, as part of a
have agreed a new Alcohol Manifesto,           At the same time, excessive or               healthy lifestyle, while at the same
with expanded policy objectives           irresponsible consumption of alcohol              time endeavouring to prevent alcohol
and a detailed Code of Commercial         beverages can result in negative                  misuse and abuse
Communication. This sets a consistent     personal, social or health consequences.    •     In our commercial communications,
worldwide standard that all group         SABMiller acknowledges its responsibility         to promote our own brands among
companies must meet or exceed.            to address this reality.                          those who have made the decision
                                               Effectively combating abuse and              to consume alcohol beverages
                                          misuse also means tackling the harm         •     To ensure that the commitment to
                                          that may result from occasional over              responsibility remains seamless
                                                                                                                                  SABMiller plc 9

   across the company, while at the
   same time acknowledging cultural           SABMiller alcohol policy as contained in the Alcohol Manifesto
   differences and differences in             SABMiller believes it has a legitimate and positive role to play in promoting responsible
   approach dependent on the nature           drinking, and in helping to combat alcohol abuse.
   of the company’s investment in a               In order to accomplish these goals, the following policy will apply to all SABMiller plc
   particular country.                        group companies:

Taking action                                 1. In addition to complying with existing national legislation, statutory regulations and
No single action is likely to reduce             industry self-regulatory codes, group companies adhere to the SABMiller plc Code of
the problems associated with alcohol             Commercial Communication.
abuse and misuse. Enforcement of              2. Internal compliance committees monitor and review commercial communications and
existing laws governing sale and                 ensure that these comply with the letter and the spirit of the Code.
consumption, education to enable              3. Wherever appropriate, SABMiller plc group companies include responsible messages
individuals to take personal responsibility      in commercial communication.
for their drinking choices and self-
regulatory controls is, we believe, the       4. SABMiller plc group companies have an employee alcohol policy in place, which
                                                 provides guidelines on responsible behaviour.
most appropriate response.
     Attitudes towards the role of            5. SABMiller plc group companies take steps to educate the retail trade on the
alcoholic beverages in society differ from       responsible use of the company’s products and, in particular, to prevent the serving
country to country, and so of necessity          of underage or intoxicated patrons.
regulations governing the production,         6. SABMiller plc group companies take steps to educate consumers on the responsible
sale and consumption also vary, as               use of the company’s products and in particular on such issues as underage drinking,
do drinking patterns. These cultural             and drinking and driving.
differences underscore the importance of      7. SABMiller plc group companies encourage, where possible, efforts to collect data on
addressing alcohol consumption within            patterns of alcohol consumption and associated problems, and encourage research
the overall context of health promotion,         projects that will provide data to direct efforts to combat misuse
taking into account cultural norms,
                                              8. SABMiller plc group companies co-operate with, and positively influence, the alcohol
lifestyles and individual behaviours.            industry nationally and internationally to promote the responsible use of alcohol.

Responsible marketing                         9. SABMiller plc group companies collaborate with relevant national and international
Historically, we have ensured our                authorities, and non-governmental organisations, to develop effective controls and
                                                 programmes to promote responsible alcohol use.
marketing conforms to industry codes
in each of our countries of operation.        10. SABMiller plc group companies formally report on progress made in terms of the policy.
We have now developed our own detailed
Code of Commercial Communication
(the ‘Code’), which will be integrated
into the business during 2004 and 2005.
This will apply over and above the codes
of practice that SABMiller subsidiary
companies have endorsed and
followed locally.                                                                                  Examples of materials used in South Africa
                                                                                                 for promoting the responsible use of alcohol.
     The Code ensures, as a minimum,
that those under the legal drinking age
are not targeted and that irresponsible
drinking is not encouraged. Compliance
with the Code will be regularly assessed
and any infringements reported and
corrected. In several countries, SABMiller
subsidiary companies are also active in
developing self-regulatory codes of
conduct, to ensure high standards are
applied across the entire industry.
     Challenge has been made to
SABMiller’s commitment in this area
through class action litigation recently
filed in the USA alleging the illegal
marketing of Miller products to underage
consumers. We believe that, if required
to do so, SABMiller and Miller will be
successful in demonstrating that they
have acted properly and responsibly.
10 SABMiller plc

In the United States, Miller’s ‘Live Responsibly’ initiatives aim to
prevent underage access to alcohol, reduce drink-driving and
encourage the responsible consumption of alcohol. Marketing
and advertising materials are featured here.

Addressing alcohol issues across                      Europe                                        the state Road Safety Agency in a hard-
the group: Examples of our activities                 In Poland, a new voluntary industry           hitting advertising campaign, ‘Don’t drink
                                                      code on marketing practices sets clear        and drive!’ on radio and billboards.
South Africa                                          boundaries within which beer producers
Continuing its long-standing commitment               may operate. Kompania Piwowarska              North America
to combat drink-driving, SAB Ltd (Beer                strictly follows those guidelines in its      Miller Brewing Company’s
South Africa) developed a major road                  advertising, packaging, sponsorships          comprehensive range of ‘Live
safety campaign launched in April 2004,               and promotions. The code forbids              Responsibly’ activities aims to reduce
to coincide with World Health Day, under              targeting advertisements at adolescents       drink-driving, prevent underage access
the slogan ‘Drink Responsibly, Drive                  and no links can be implied between           to its products and promote informed
Responsibly, Live Responsibly’. The aim               beer consumption and maturity or              decision-making about consumption
was to achieve a cultural shift in long-              success at work or socially. Kompania         levels among legal age consumers.
term attitudes to road safety, going                  Piwowarska is also supporting a new           Materials include ‘Let’s Talk’, a family
beyond drink-driving issues to address                campaign – the first joint venture between     guide to making responsible choices
speeding, road-worthiness, driver                     the beer industry and the public health       printed in English and Spanish,
fatigue, safety belts and pedestrian                  sector – targeted mainly at vendors and       ‘Celebrate Responsibly’, a guide
awareness. Half a million road safety                 owners of shops and outlets with on-          to responsible event planning and
pamphlets were produced, together with                premise alcohol consumption. The aim is       ‘Campus Resource’, a guide for
newspaper and radio advertising and a                 to remind vendors of their responsibility     college administrators, staff and
billboard campaign.                                   to check the age of any person                student leaders. In the year under
     SAB Ltd played a central role in the             purchasing alcohol.                           review, Miller developed a national
development and launch of an expansive                                                              ‘Live Responsibly’ advertising campaign.
industry television and radio campaign                In the Czech Republic, Plzensky˘ ´            Sixteen new print advertisements were
to discourage underage drinking, which                Prazdroj has joined with four other           created and a new 30-second radio
was acknowledged by the authorities                   major brewers together representing           commercial was aired by 83 radio
and the general public.                               75% of the market to form the Initiative      stations over the December/January
     It also worked through the Industry              of Responsible Brewers. The aim is to         holiday period.
Association for Responsible Alcohol Use               support moderate and responsible beer              Miller works closely with its distributor
to promote a code of practice, especially             consumption and to educate the public         network to promote responsible drinking.
among the informal retail trade. The                  about the dangers of abuse, working           During 2003, 470 of these independent
code aims to encourage commitment                     with the state authorities. In 2003, the      businesses were involved, using tools and
towards key policies, such as not                     brewers adopted a self-regulatory code        resources developed by Miller in outreach
supplying minors and intoxicated                      of conduct setting out principles for         to retailers, event planners, college
persons. Thousands of copies of these                 advertising, sales promotion and              administrators and the various law
codes have now been endorsed and                      promotional campaigns in the Czech            enforcement agencies. A formal Distributor
displayed by the trade.                               beer industry. Also in 2003, the Initiative   Responsibility Initiative is part of all
                                                      joined with the Ministry of Transport and     distributors’ annual business plans,
                                                                                                                                       SABMiller plc 11

with six key elements such as naming               in our industry, helping to fund consumer           foster dialogue between the industry
an employee responsible for community              education campaigns, supporting                     and its stakeholders.
education, training servers, distributing          research into more effective ways to
the ‘Let’s Talk’ parents’ guide and placing        curb excessive drinking and participating           Future commitments and targets
‘We I.D.’ signage and point-of-sale                in dialogues with external stakeholders,            Looking forward, we plan to strengthen our
materials with retailers. Introduced in            locally and internationally.                        efforts by integrating the revised alcohol
2001, over 80% of distributors have now                At international level, we are active           policy into business decision-making. In
completed all six elements. Matching               members of ICAP, the International                  particular we are establishing a compliance
grants are available, under which Miller           Center for Alcohol Policies, along with             mechanism for the new Code of
funds 50% of distributors’ costs in                nine other leading producers of beverage            Commercial Communication. We are also
expanding these initiatives.                       alcohol. Based in Washington DC,                    reviewing existing policies on employees
                                                   ICAP is an industry-led body seeking                and alcohol that apply in major markets
Engaging with stakeholders                         to reduce the abuse of alcohol                      such as South Africa and the USA, and will
In addition to our own actions country             worldwide, promote understanding                    ensure codes of conduct for employees
by country, SABMiller works with others            of the role of alcohol in society and               are implemented in each subsidiary.

  SABMiller Code of Commercial Communication for Alcohol Beverages
  The object of the Code is to provide guidance for the commercial communication of alcohol beverages. As such, the Code is in addition to
  all regulatory and/or self-regulatory requirements, which may already exist in a particular country.
       Commercial communication includes advertising in all media (including the internet and text messaging), packaging, promotions, product
  placement, merchandising and sponsorship.

  1. Commercial communication must:
     • be legal, decent, honest and truthful and conform to accepted principles of fair competition and good business practice
     • be in keeping with local cultural values
     • be prepared with a due sense of social responsibility and be based on principles of fairness and good faith
     • comply with all regulatory requirements
     • not be unethical or otherwise impugn human dignity or integrity
     • be mindful of sensitivities relating to culture, gender, race and religion
     • not employ themes, images, symbols or figures, which are likely to be considered offensive, derogatory or demeaning

  2. Commercial communication may not be directed at persons under the legal drinking age (or in countries without a legal drinking age,
     to persons under the age of 18).

  3. Commercial communication will not incorporate images of people who are, or look as if they are, under the legal drinking age pertaining
     to the particular market (or in countries without a legal drinking age, to persons under the age of 18), unless there is no suggestion that
     they have just consumed, are consuming or are about to consume alcohol.

  4. Commercial communication may not employ characters or icons which have unique appeal to children.

  5. Commercial communication may not feature or encourage irresponsible, risky or excessive drinking.

  6. Commercial communication may not portray persons in a state of intoxication nor in any way suggest that intoxication is acceptable.

  7. Commercial communication may not encourage the choice of a product because of its higher alcohol content or intoxicating effect.
     Factual information for the guidance of consumers about alcoholic strength may be included, dependent on existing regulatory

  8. Commercial communication may not depict or suggest consumption of alcohol beverages under circumstances that are generally
     regarded as irresponsible, improper or illegal, e.g. before or during any operation requiring sobriety, skill or precision.

  9. Commercial communication may not depict or include pregnant women.

  10. Commercial communication may not have an association with violent or anti-social imagery or behaviour, or with illicit drugs or
      drug culture.

  11. Commercial communication may not imply that alcohol beverage consumption is essential to business, academic, sporting
      or social success.

  12. Commercial communication may not present refusal, abstinence or moderate consumption in a negative light.

  13. Commercial communication may not claim that alcohol has curative qualities, nor offer it expressly as a stimulant, sedative or tranquilliser.

  14. Commercial communication may not portray nudity or suggest that alcohol beverages can contribute directly to sexual success
      or seduction.
12 SABMiller plc

ISSUE: REDUCING OUR ENVIRONMENTAL IMPACT                                                   Water use in breweries has been
                                                                                           reduced remarkably in the last 25 years,
                                                                                           from a range of between 25 to 30

                                                                                           hectolitres of water per hectolitre of beer
                                                                                           to the current figures, which in modern
                                                                                           breweries vary as follows:

                                                                                           •    Typical convention = 7 hectolitres of
                                                                                                water / hectolitre of beer (hl/hl)

                                                                                           •    Best practice = 3.5 hl/hl

                                                                                           Our worldwide average performance in
                                                                                           the year under review was 4.8 hl/hl.

                                                                                           Typical water usages in a ‘good practice’
                                                                                           brewery are as follows:

                                                                                           Operation                 % Contribution to total water
                                                                                                                consumption in an average brewery

                                                                                           Brewhouse and cellars                           48%
                                                                                           Packaging                                       16%
Drinkable water is becoming a scarce          Nations Environmental Program (UNEP).        General cleaning                                10%
commodity in some areas of the world.         Of particular concern are the situations     Ancillary operations                            25%
The United Nations Food and Agriculture       prevailing on the African continent.         Domestic                                         1%
Organisation estimates that one in five             Africa’s share of global freshwater     Total                                         100%
developing countries will face water          resources is about 9%. This is
shortages by 2030. While not at present       distributed unevenly, with western Africa    Due to strict hygiene and quality
a business or environmental constraint        and central Africa having significantly       requirements, the use of reclaimed
in our countries of operation, water          greater rainfall than the rest of the        and recycled water is only viable at
conservation is of central importance         continent. Erratic rainfall patterns         certain predetermined usage points.
to our long-term sustainability efforts.      complicate the picture, resulting in some    No reclaimed or recycled water can be
We have already and will continue to          people being highly dependent on             used for any additions to the product
reduce consumption in our production          ground water as their primary source of      and for processes where water comes
processes, in some cases dramatically.        freshwater. Africa also has the highest      into contact with the product.
Looking forward, we seek to work              rate of population growth in the world,
with external partners to find                 which will further intensify the demand      The business case
common solutions.                             for freshwater.                              Sustainable water management matters
                                                                                           to our business, and not just because
Water plays a critical role in human          The use of water in brewing                  without a suitable supply, breweries and
development and in maintaining the            Water is one of the most important raw       bottling plants simply cannot function.
ecological support systems on which           materials in the production of beer. It is   Cost savings can also be achieved with
we depend. The availability of these          also essential to ensure a high degree       decreased consumption and, where
freshwater resources, and the demands         of hygiene throughout a brewery and for      clean water is purchased from a third
placed on them, is rightly moving centre      use in plant utilities. Around the world     party there are associated cost benefits
stage in the global pursuit of sustainable    our breweries obtain their water from a      relating to a reduction in pumping,
development and in our own policies and       variety of sources, two-thirds on average    heating and chemical requirements.
actions as a business.                        from municipal supplies, with the balance        In addition, using water in a
     However, effective action to manage      from surface and ground water sources.       sustainable manner helps minimise the
water resources sustainably is complex,       In many cases, treatment is necessary to     impact on downstream users, which
with significant differences in the various    bring the quality of these sources in line   we aim to do as a good citizen. Our
regions and many international initiatives    with internationally recognised drinking     approach is set out in our guiding
trying to help. Business is now               water standards. Since beer is classified     principles (see page 28).
increasingly being asked to play an           as a food product, any water used as an
active role, in recognition that a            ingredient and coming into contact with      Taking action
multi-stakeholder approach, locally           the final product, for example, from          SABMiller continues to research and
and internationally, is essential.            processing equipment and packaging,          develop practices that enable us to
                                              must meet all current specifications for      reduce our overall water consumption
Freshwater availability                       drinking water.                              footprint. To date, 92% of our annual
As the world’s population grows so does           The amount of water used for a unit      lager volumes come from breweries
the demand on freshwater. In less than        of finished beer will depend on factors       achieving water use ratios that
25 years, two-thirds of the world’s people    such as packaging and pasteurisation,        either meet or exceed international
will be living in water-stressed countries,   technology employed, the age of the          recognised benchmarks (5-6 hl/hl).
according to estimates by the United          plant and internal housekeeping.             Water consumption is one of the key
                              SABMiller plc 13

Pivovar Radegast a.s. Nosovice (PRN) brewery
in the Czech Republic has pioneered the
treatment of effluent for safe re-introduction
to natural water bodies.

environmental indicators that are
reported quarterly to the SABMiller
corporate accountability and risk
assurance committee.
     Our operations in both North America
and Europe have made significant
progress in the year under review, with
90% of our breweries in these regions
being on track to meet their individual
two-year targets set in April 2003.
Miller Brewing Company has
consistently achieved ratios of below
5 hl/hl, while SABMiller Europe is just
below the 5 hl/hl mark and improving.
These achievements have been realised
through a combination of technological
improvements and enhanced operational
and housekeeping measures that have
been introduced.
     Care in the use of water extends to
the treatment of effluent, particularly
when this is being reintroduced to
natural water bodies. Some of our most
effective and efficient processes have
been pioneered in the Czech Republic,
where Pivovar Radegast a.s. Nosovice
(PRN) has installed an anaerobic
treatment plant that converts brewery
waste into methane, along with a natural
process including reed beds for final
effluent polishing.
     Similarly our engineers in SAB Ltd
are making significant advances in
the reduction of the division’s overall
water consumption footprint which is
anticipated to keep the breweries well
below the UNEP 5-6 hl/hl benchmark.
     The vast majority of our African
business units outside of South Africa
have been incorporated through
acquisition. In addition to their different
histories, these operations also differ
markedly from each other in size,
technology, stage of development,
culture, skills mix and core competence.
We cannot, therefore, adopt a ‘one size
fits all’ approach. To achieve marked
improvement in sustainable water
management means we must recognise
the specific needs of each brewery and
of its particular phase of development.
14 SABMiller plc

Issue:                                                                       overall water waste by taking into
                                                                             account both the phase of a given
                                                                             plant’s operational development and its
                                                                                                                                    Similarly at the Maluti Mountain
                                                                                                                                    Brewery (Lesotho) a wide-ranging
                                                                                                                                    awareness programme is starting to

Reducing our                                                                 overall capacity plan. The approach
                                                                             helps to create awareness, entrench
                                                                             good practice, reduce waste, identify
                                                                                                                                    change behaviour and processes
                                                                                                                                    resulting in reported consumption
                                                                                                                                    decreasing from 11 hl/hl to 9 hl/hl.
environmental                                                                cost saving opportunities and provide
                                                                             a platform for future progress.
                                                                                                                                         Most second stage assessments are
                                                                                                                                    in preparation and we envisage being

impact                                                                            The programme’s first stage
                                                                             addresses behavioural changes in the
                                                                             workforce, while the second involves
                                                                                                                                    able to report more extensively on these
                                                                                                                                    in future. One brewery where action has
                                                                                                                                    been taken is the Kgalagadi Brewery in
                                                                             a more technological approach where                    Botswana. The brewery initiated a water
                                                                             facilities are audited, a detailed footprint           savings plan to not only drive water use
                                                                             is determined, and medium to long-term                 down, but also to realise variable cost
                                                                             opportunities are identified.                           savings and improve their overall house-
                                                                                  During the first ‘behavioural change’              keeping standards. The project aimed to
                                                                             stage, the aim is to raise awareness of                reclaim used water and redistribute it
This is the basis of our approach to                                         water conservation and instil this into                both inside and outside process areas,
raising manufacturing performance to                                         operational practice, through training                 to clean floors and reduce the reliance
new levels and is the core tenet of our                                      on best practice, active employee                      on additional water. To date, the initiative
Manufacturing Excellence Programme.                                          participation and effective knowledge                  has shown good results with the brewery
    We have defined four phases of                                            sharing between operations. In the                     being able to meet and in some cases
development in a brewery:                                                    second, ‘technological change’ stage,                  exceed its target usage of 5 hl/hl.
                                                                             a detailed assessment of the brewery
Phase                            1:   Emerging                               is carried out and opportunities identified             Future commitments and targets
Phase                            2:   Developing                             and evaluated. Successful projects are                 Looking forward, we remain committed
Phase                            3:   Established                            then publicised internally as case studies             to practical action, brewery by brewery,
Phase                            4:   Evolutionary                           for possible use in other facilities.                  across all our divisions, so that the
                                                                                  By March 2004, half our operations                freshwater resources available to us are
The descriptors for breweries in each                                        in the Africa & Asia division had gone                 managed as sustainably as possible.
phase are shown in Figure 1 below.                                           through the first stage evaluation, and                 To drive continuous improvement, we
                                                                             positive results achieved. Following an                will continue to set targets and publish
We have developed the SABMiller Africa                                       assessment and the implementation of                   the results on water consumption in our
& Asia Waste Minimisation Programme                                          improvement actions identified at                       operations. We will also work with our
– a branch of the Manufacturing                                              Cervejas De Moçambique, for                            neighbouring communities who rely on
Excellence Programme – to allow                                              example, water consumption was                         these same resources where we can
SABMiller Africa & Asia to reduce its                                        reduced from 12 hl/hl to 10 hl/hl.                     contribute to partnership projects.

Figure 1 Phases of brewery development
                             Phase 1: Emerging                       Phase 2: Developing                   Phase 3: Established                    Phase 4: Evolutionary
                             •    Dependent                          •   Still dependent but               •   Co-dependent                        •   Self reliant (not independent)
                             •    Huge gaps in infrastructure            building self reliance            •   Infrastructure largely developed    •   Consistent, reliable, efficient
                                                                     •   Infrastructure being                                                          production
                             •    Performance far short of                                                 •   Focus on best practice
                                  minimum standards                      developed: critical                                                       •   Application of world class
                                                                                                           •   Standards routinely achieved
                                                                         gaps addressed                                                                standards in key areas
                             • Focus on getting the very basics
 Operational Effectiveness

                                                                     •                                     •   Continuous improvement in all
                               right: consistency and                    Introduction of best practice                                             •   Lean manufacturing principles
                                                                                                               areas with some step change
                               sustainability off a low base         •   Basic standards achieved at                                                   pursued
                                                                                                               in key areas
                             • A ‘culturisation’ of the brewery to       an acceptable level                                                       •   Continuous improvement
                               the SABMiller way                     •   Continuous improvement                                                        with step change
                             • Few or no measures: focus on              in key areas, e.g fermentation                                            •   Supply chain optimised and
                               getting basic measurement             •   Focus on quality (cost follows)                                               planning in place
                               systems in place                                                                                                    •   Focus on innovation in
                                                                                                                                                       all spheres
                                                                                                                                                   •   Cost reduction programmes
                                                                                                                                                       in place aimed at systematic
                                                                                                                                                       cost reduction

                                                                                          Operational Development
                                                                                         SABMiller plc 15


is the key
The HIV/AIDS epidemic is a crisis of
tragic proportions. But with active
interventions and appropriate therapies,
its spread can be slowed and the
human suffering mitigated. In all of
our operations in Africa, SABMiller
companies have vigorous intervention
strategies that are starting to take effect.
Taking action is not just the right
humanitarian response, but is necessary
as HIV/AIDS is already impacting our
business in Africa and represents
a growing risk in other parts of the
world too.

Around the world some 40 million people
are living with HIV/AIDS, according to
December 2003 estimates by UNAIDS.
The epidemic continues to spread, with
five million people newly infected in
2003. Sub-Saharan Africa is home to
over 50% of people living with HIV/AIDS
worldwide, although infection rates vary
considerably. In some countries where          Counsellors for our ‘ACT’ (awareness,
SABMiller has operations, there is more        counselling and testing) campaign in
positive news. In Uganda, for example,         South Africa, which has been successful
                                               in educating our employees about
prevalence is falling. But in most other       HIV/AIDS and provides support and
countries, the crisis is growing.              help to those affected.

A critical business issue
The last decade has seen a major
change in the way we approach
HIV/AIDS as a business issue. Initially,
we viewed it more as a question of
social responsibility, and sought to raise
awareness, offer basic education and
facilitate prevention, for example, by
making condoms available. Over the
last four years, we have recognised it
as a critical business risk in sub-Saharan
Africa, which impacts us in three distinct
ways. First and most directly, it affects
our employees, causes a range of
operational difficulties and increases
16 SABMiller plc

Issue:                                       Following the KAP survey, the next goal
                                             is to achieve high take-up of voluntary
                                             counselling and testing (VCT). We have
                                                                                         Taking action on HIV/AIDS
                                                                                         In South Africa, KAP surveys were first
                                                                                         conducted during 2002, and the results

Tackling                                     called this element of the approach the
                                             ‘ACT Campaign’ – standing for
                                             ‘awareness, counselling and testing’ –
                                                                                         of these analysed. In April 2003 SAB
                                                                                         Ltd’s action on HIV/AIDS entered a new
                                                                                         phase, with the launch of its Lifeforce
HIV/AIDS                                     because we believe achieving high levels
                                             of voluntary testing among employees
                                                                                         programme through the implementation
                                                                                         of the ACT campaign as described
                                             is the key that unlocks effective action,   above. In addition to access to
                                             whether continued prevention or             treatment, patient education and
                                             practical assistance for those infected.    supportive counselling is an important
                                             But before employees will choose to do      element of this programme.
                                             this, a concerted communication                 The campaign stepped up a gear in
                                             programme is needed to motivate them        November 2003 when the managing
                                             and assure them of confidentiality.          director of SAB Ltd, Tony van Kralingen,
                                                  Once tested, affected employees can    used a satellite TV address in the run-up
                                             register for managed health care. Fully     to World AIDS Day on 1 December, to
                                             funded by the company, it is operated       stress the voluntary and confidential
                                             independently to maintain confidentiality.   approach. We have set an immediate
                                             The treatment programme is designed         target of persuading 40% of our
direct and indirect costs. Second,           to support people in the HIV well phase     employees to be tested by December
it affects our customers and may             and keep them healthy for as long           2004. By March, we had achieved 25%,
impact future sales. Third, is the wider     as possible and includes lifestyle          and over the current year intend to
community where SABMiller operations         management and anti-retroviral therapy      increase this significantly.
seek to be active corporate citizens.        (ARV) for the individual and his/her            Also in 2003, a second KAP survey
                                             dependants. This means that employees       in South Africa was conducted, allowing
Our approach: Early intervention for         not already covered by health insurance     detailed comparison between the
prevention, then managed assistance          have the full costs of treatment met        country’s sub-regions. The survey
We have adopted a comprehensive              by SABMiller.                               revealed significant improvement in
approach comprising a proactive                   At the same time, we build
intervention strategy to reduce the          management capacity through site-
number of new infections through             based task teams, workshops for
effective early action and a programme       managers and shop stewards, and
to manage existing infections through        training for occupational health staff.
comprehensive lifestyle management           The company’s approach is set out
and treatment.                               clearly in a detailed Life Threatening
    The approach involves an initial         Diseases Policy that currently applies
assessment of current prevalence             in SAB Ltd and the SABMiller Africa
through anonymous and unlinked               & Asia division.
voluntary testing, and this informs a cost
and impact analysis. Next, detailed
knowledge, attitude and practice (KAP)       Our Africa & Asia Life Threatening
surveys are conducted. These provide         Diseases Policy outlines the company’s
                                             commitment to confidentiality, non-
invaluable insights into the barriers to     discrimination, respect for the rights of
changing behaviour and are a crucial         employees and reducing and managing
instrument used to benchmark the             the impact of life-threatening diseases
actions we are taking in each country        on employees, their dependents and
                                             the workplace.
and to identify specific concerns, so that
programmes are targeted and focused
on the right issues. They measure a very
broad range of factors, including myths
and misconceptions about transmission
risks, current sexual behaviour, barriers
to behaviour change and attitudes in
the workplace. Though costly and time
consuming, they ensure subsequent
communication campaigns are highly
targeted and effective. They are
an essential element in evaluating
the effectiveness of the strategy
and intervention.
                                                                                                                             SABMiller plc 17

knowledge about transmission and             also measuring the effectiveness of the
about workplace attitudes to interacting     strategy through prevalence rates, take-
with an HIV positive person. However,        up of voluntary testing and numbers on
it also revealed that a small proportion     ARV therapy.
of employees did not understand
the predictive ability of blood tests or     Speaking out
the benefits of such testing. Some            In Uganda, one of the Nile Breweries
employees did not believe that               HIV/AIDS peer educators was the
information would be kept confidential,       country’s private sector representative at
and feared stigma and discrimination.        the second African Great Lakes HIV/AIDS
These issues were addressed in               conference, held in Kigali in September
subsequent campaigns and activities.         2003. The company’s approach was
     In April 2003, Lesotho Brewing          presented, stressing the non-discriminatory
Company implemented our approach,            policy, take-up of voluntary counselling
offering voluntary counselling and testing   and testing, condom distribution and
and where necessary medical                  provision of ARV therapies. This
management on a confidential basis            interaction resulted in intensifying the
to all employees. The programme pro-         company’s efforts to combat AIDS,
actively set out to encourage employees      which included working with distributors
to find out their HIV status. After 12        and monitoring the effectiveness of the
months, 31% had undertaken VCT and           ARV therapy programme.
those found to be HIV positive were               Nile Breweries is encouraging people
registered for medical management,           with AIDS to ‘break the silence’ after
together with their spouses and partners.    peer educators have gained their
Data accumulated over the past year          attention and helped create a supportive
suggests that this programme is proving      and non-discriminative culture in the
to be a substantial success. Half the        workplace. In June 2003, prominent
employees registered are still at the        Ugandan, Major Rubaramira Ruranga,
pre-HAART (highly active anti-retroviral     who contracted HIV in 1985, addressed
therapy) stage, indicating that they are     Nile Breweries’ workers about his
in the early phase of the illness. With      experience, saying that anyone who is
appropriate intervention, they should        open about his or her HIV status is open
remain healthy for a longer period.          to assistance and is, therefore, more
     National Breweries plc in Zambia        secure. “Talk about it and you are
launched its HIV/AIDS programme              assured of life tomorrow,” he said.
‘Tichumfye Intandabwanga’ (to conquer             Also in South Africa, Amalgamated
HIV/AIDS) in 2002. Devised after             Beverage Industries (ABI) is working             Top: Raising funds for HIV/AIDS charities
careful consultation with a range of         with its external service provider,              in South Africa.
stakeholders, including staff focus          Lifeworks, to help affected employees.           Middle: Raising awareness of HIV/AIDS
groups, the programme has a three to         The ABI programme, known as AAA                  through our ‘ACT’ campaign.
five-year time horizon and is delivered       (ABI Aids Awareness), has been                   Bottom: HIV/AIDS testing is provided free
with community and governmental              commended by the Global Business                 to all employees in South Africa.
partners. Volunteer peer educators play      Coalition on HIV/AIDS as an example of
a key role, and ARV therapy was made         an outstanding initiative. The programme
available to all employees and their         follows our comprehensive approach.
dependents in need from January 2003.             Overcoming the barriers of the social
A KAP survey helped to measure the           stigma, suspicion and myths surrounding
effectiveness of the programme. After six    HIV/AIDS is one of the principal challenges.
months, 84% participation was achieved       Targeted communication campaigns are
for a baseline survey of infection levels    run at critical points of the overall process.
– a measure of success in winning            In the year under review, the theme of
confidence among employees. Now               ‘Know your Status’ coincided with World
monthly progress reports track the           AIDS Day to encourage employees to
extent of training and treatment             register for voluntary confidential
registration statistics.                     counselling and testing. ABI achieved
     Implementation of our                   voluntary counselling and testing of
comprehensive approach is achieving          42% of all its employees.
specific behavioural and attitude
changes, which are carefully monitored
through indicators such as the incidence
of sexually transmitted infections. We are
18 SABMiller plc

Tackling HIV/AIDS
Reaching out to communities                 the past year, and ongoing support          that has come forward for ARV therapy.
In several countries, SABMiller             in the form of maintenance, project         The number of employees and their
companies are reaching out to work with     management, and community                   dependants on the managed health
governments and non-profit agencies          awareness drives will be offered.           care programme continues to grow,
supporting HIV/AIDS interventions           The centres provide after school care,      as the ACT campaign is rolled out in
through their community involvement         nutrition and education to children from    more countries.
programmes. For example, in Botswana        the surrounding communities.                     As the epidemic is greatest in Africa,
the KMS Trust – funded by Botswana                                                      it is right our current effort is there.
Breweries (Pty) Ltd and Kgalagadi           Future commitments and targets              Moving forward, we have already begun
Breweries (Pty) Ltd – contributed           We plan to expand our comprehensive         to exchange experience within and
some P100,000 (US$21,000) to support        approach in all our operations in Africa.   between our other operations. During the
HIV/AIDS projects. One project, run by      Specifically, KAP surveys will be            current year, we expect to put in place
a group of 40 women and children living     conducted in those countries where          policies and then plan for appropriate
with HIV/AIDS, provides a counselling       they have not already been completed.       programmes in other affected parts of
room in Ramotswa village. Another           We are working to overcome variability      the world in which SABMiller operates.
helps the Botshelong Counselling Centre     in service providers, expertise, and        Learning from Southern Africa, we will
in Selebi Phikwe, a mining town with        practical difficulties of providing access   base these on detailed assessments of
an HIV/AIDS prevalence rate of 54%.         to treatment for our employees in remote    the local needs and consult about the
Funding helps with the set-up costs of      areas. Despite these difficulties, we have   best way to address the problem and
a pilot payphone project that generates     been successful in treating everyone        achieve positive results.
income for some 20 infected people.

If successful, the approach will be
replicated in other areas.                     We are working to overcome variability in service
     National Breweries plc in Zambia
has assisted several local community        providers, expertise, and practical difficulties of
projects, ranging from the donation of
essential food products to working with     providing access to treatment for our employees
the Clinical Pastoral Care Centre and       in remote areas

the Kitwe District Health Management
Team’s Task Force on HIV/AIDS.
The largest project supported by the
company is the Mother Theresa drop-in
centre in Lusaka, which comprises an
HIV/AIDS hospice, school and clinic.
     The plight of vulnerable children is
seen as a priority and a partnership
between ABI and NOAH (Nurturing
Orphans of Aids for Humanity), a not
for profit organisation, was entered into
during the past year. NOAH is an
initiative that aims to help children
orphaned by AIDS to grow up into
emotionally and psychologically
stable adults.
     ABI supports NOAH to set up
community-based committees and
structures for the sustainable
management of children orphaned as a
result of the impact of AIDS. Funding for
the construction of two centres in the
most severely affected province of
KwaZulu Natal, was committed during
                                                                                                                             SABMiller plc 19


Creating and
sharing wealth

The owner-driver scheme which is             SABMiller supports various farming                A joint venture between farmers and Tanzania
supported by SAB Ltd provides jobs           initiatives in emerging markets.                  Breweries Ltd has resulted in the reintroduction of
and opportunities to develop                                                                   barley production which sustains the livelihoods
independent business.                                                                          of villagers.

In an era when trade is becoming                  Cash value added                            This year, the growth of the business has
increasingly global, SABMiller remains            SABMiller is focused on achieving           increased cash value added by nearly half
very locally focused. We seek to procure          sustained commercial success but also       to US$5,600 million. Again governments
our supplies locally, taking steps to             recognises the importance of sharing        are the largest single beneficiaries, taking
build capacity where this is not currently        among all stakeholders the wealth and       a 43% share of cash value added through
the case, and the majority of our                 opportunities generated. One way            corporation tax and excise duties.
beverages are sold in the same region             to assess our performance in meeting        Employees earn 22%, including payments
in which they are made. The result is             this goal is to measure the value we        made on their behalf to governments for
that the wealth we create as a business           create and the way in which the value is    employment taxes and social security
is shared widely, benefiting those local           distributed. We have pioneered the use      benefits. Approximately one-fifth is
to our operations.                                of cash value added statements in social    retained in the business to help finance
                                                  reporting, as we believe it provides an     growth from which stakeholders will
The year has again seen major growth              easily understandable snapshot of how       benefit in future. (See Table 2 on page 31.)
and change in the SABMiller group of              much wealth the business has created
companies. With brewing operations in             and who benefits.                            Local economic impacts
more than 40 countries and employment                 Value is created by taking bought-in    SABMiller companies spent
of nearly 40,000 people, the economic             resources such as raw materials and         US$5,700 million during the year on
impact of the business is powerful,               other supplies and transforming them        bought-in goods and services from
extending into the ‘value chain’ of our           through the skills of our people and the    suppliers, up a third on the previous
suppliers, contractors, distributors and          technology inherent in our equipment and    year. This volume of purchasing has a
retailers around the world.                       processes into products and services that   very significant economic impact in the
                                                  customers want to purchase. Only if we      communities and countries where we
                                                  are successful at creating value can        trade. In recent years, we have been
                                                  stakeholders benefit from the business.      consolidating our procurement of key
20 SABMiller plc

                                             ‘  Our impact on local economies comes not just
                                             from the jobs we ourselves create in our own
                                             operations, but also in our value chain
supplies, to ensure consistently high
quality and to lower costs. Some key
items are now sourced regionally, rather
                                             linkages as our products go to market:
                                             distributors, wholesalers, retailers, bars,
                                             restaurants and hotels.
                                                                                             than 20 years and have traditionally
                                                                                             focused on the workforce and on
                                                                                             suppliers. While Miller’s ethnic minority
than just within one country. The average        Accurate estimates are difficult, as         representation is slightly ahead of the
value of purchasing within country for the   this value chain lies outside our direct        general US labour force availability
group remains high at 87%. However,          control. In previous reports, we have           (28.2% vs. 27.0%), women are under-
this varies widely across the countries in   detailed studies as diverse as Tanzania,        represented (29.6% vs. 46.7%), especially
which we operate, from less than 20%         Spain, Poland and the USA which show            in the executive band (4.3%).
being sourced within country in some         the jobs multiplier in the brewing industry          In response, Miller has committed to
African countries to over 90% in our         is between 20 and 30 – that is our              increasing its overall representation of
larger operations by purchasing value.       operations sustain 20 or 30 times the           women, especially in the executive band
     In areas where local sourcing is low,   number of our own direct employees              by year end 2005. In addition, action
we seek to engage with local partners to     along the value chain. (See Table 3 on          plans are in place to address diversity
help build the economic and agricultural     page 32.) In the soft drinks industry,          issues identified in the recent organisation
capacity. For example, Accra Brewery         studies by The Coca-Cola Company in             effectiveness survey.
Ltd in Ghana has been helping to             South Africa show that each job in the               Miller’s spend with minority business
develop small and medium-sized               bottling sector sustains a further ten in       enterprises (MBEs) fell slightly to 3.2%
enterprises since 1999, as a way to          forward and backward linkages.                  (US$95.6 million) from 4% (US$118.2
source raw materials locally and avoid           Based on these studies and the              million) of total company eligible spend
incurring costly and scarce foreign          countries falling within the scope of           in 2003. This decrease is primarily the
exchange on imports. After a period of       this accountability review and taking a         result of loss/shift in business with three
experimentation, it was found locally        cautious approach, we estimate that our         key MBE suppliers who comprised
grown maize could be used as a viable        operations sustain more than 1.6 million        approximately 30% of the total MBE
partial substitute for some malted barley    jobs in total.                                  spend. Second tier expenditures, where
traditionally used. In 2000, the brewery                                                     MBEs sell to Miller’s first tier non-minority
partnered with a privately-owned local       Broadening the impact                           suppliers, comprised 23.8% of the
firm, General Mills Company, providing        In keeping with our guiding principles,         reported total. These second tier
working capital and guaranteeing an          many SABMiller companies take practical         initiatives help to foster relationships in
above-market purchase price to farmers.      measures to broaden the range of people         areas of the supply chain that would
In the first year, 1,000 tonnes of maize      who benefit from our operations. In some         otherwise have little minority involvement.
grits were supplied, and this has now        cases, this involves offering help and          Annually, Miller sponsors two minority
risen to over 5,000 tonnes.                  support to new entrepreneurs wishing to         business owners from our MBE suppliers
     An estimated 3,950 farmers and          set up their own businesses. In South           to attend minority business executive
some 20,000 farm labourers are now           Africa and the United States, this effort has   programmes. This serves to further
engaged in maize growing as a direct         a particular focus on ‘commercial equity’ –     develop the leadership within these
result of this partnership. The future       using the purchasing power of the supply        companies and work towards
outlook is positive too: General Mills       chain to foster economic empowerment            long-term partnerships.
Company is making a US$1 million             among sections of the community that                 The company is an active corporate
investment to expand production by           have been previously disadvantaged.             member of the National Minority Supplier
some 20,000 tonnes, planned for export       Within our own operations, too, we seek         Development Council (NMSDC), the
to other breweries in West Africa.           to give effect to this commitment to            premiere organisation for minority
                                             diversity. We place great emphasis on           business relationships. Individual
Jobs multiplier                              training, so for example local managers         breweries also belong to the local
Our impact on local economies comes          can succeed expatriates after an initial        NMSDC chapters.
not just from the jobs we ourselves create   turnaround period following the acquisition
in our own operations, but also in our       of a new brewery.                               South Africa
‘value chain’ – from the jobs created in                                                     In our South African businesses, black
our suppliers and their subcontractors       Miller Brewing Company                          economic empowerment (BEE) in all
and from all those involved in forward       Miller’s diversity initiatives date back more   its forms is regarded as a necessary
                                                                                                                              SABMiller plc 21

                                                                                              Left: Farmers working at a maize mill
                                                                                              supported by Accra Breweries in Ghana.
                                                                                              Right: Tanzania Breweries beer delivery
                                                                                              near Mount Kilimanjaro, Tanzania.

economic and social imperative which we         a vehicle rental. After necessary training,
wholeheartedly support. Our approach is         which includes numeracy and business            Ten years in Tanzania
to ensure that interventions are demand-        skills, the owner-driver enters a ten-year
                                                                                                In 1993, SAB acquired a 50%
led – that is to say, steps taken to redress    cartage agreement, acquires a truck             shareholding in Tanzania Breweries
previous imbalances must make sense             and then has the ability to develop             Ltd from the government. At the time,
for the business, otherwise the approach        the business.                                   annual output was 525,000 hls. The
will not be sustainable in the long term.            During the year under review,              brewery was loss-making and had not
     In SAB Ltd, our approach to internal       SAB Ltd has also rolled out a new project       paid a dividend for 20 years. The stated
empowerment is to invest heavily in             offering training for independent business      aim of the joint venture with the
training, currently running at seven days       owners who run bars. More than 830              government was to increase production,
on average per employee, amounting to           taverners benefited, and the target in the       improve quality, raise plant utilisation
5.8% of payroll costs. Equity headcount         current year is to reach 3,000. SAB Ltd         rates, reduce costs and so make a
                                                                                                profit, resulting in additional revenues for
is 66%, of which 28% are women.                 invested around R880,000 (US$125,000)
                                                                                                the government through tax, excise duty
     Externally, SAB Ltd spends around          in the initiative. The results of the           and dividends on its remaining holding.
R732 million (US$103.7 million) a year with     taverner-training programme to date have             Ten years on, the results have
commercial equity companies and has             been dramatic: turnover increased by            been dramatic. Production now nears
5,000 such businesses registered on its         an average of 30%, debtors outstanding          two million hls a year, with new brands
vendor listing. This is 11.7% of total          decreased by 18% so reducing the risk           introduced and exports commenced.
purchases. Over the last year, a new            of bad debts, and creditors increased by        Excise and sales taxes have trebled
accreditation process was put in place,         38%, as the business owners understand          and total tax contributions now exceed
part of a detailed action to achieve a new      the importance of cash flow.                     Tsh83,000 million (US$79 million) a year.
set of commercial equity targets that will be                                                   Dividend payments were restarted in
                                                                                                1995 and the company has listed on the
compliant with South African government         Future commitments and targets
                                                                                                Dar es Salaam Stock Exchange, with
standards, and a complete audit of the          Looking forward, we plan to increase            22,000 local shareholders able to share
supplier database was conducted.                the amount of business we conduct               directly in the wealth created.
     SAB Ltd’s commitment to                    with commercial equity partners in                   Tanzania Breweries recognises
empowerment was recognised in                   South Africa and with minority business         this continued success also depends
2003 through winning the inaugural              enterprises in the United States.               on helping to overcome poverty and
Business Map Foundation Black                   Our businesses continue to explore              develop the economy. A joint venture
Economic Empowerment Award for the              how their purchasing power can benefit           with farmers in West Kilimanjaro has
‘Most Progressive Established Company’          local economies while still meeting our         re-introduced barley production, brought
of the year. SAB Ltd was singled out for        commercial goals. Looking further ahead,        6,000 acres back into cultivation and
                                                                                                now sustains the livelihoods of many
the steps it had taken to improve its           we will consider how to increase the
                                                                                                villagers. The company also invests
equity targets and for its overall              impact in our forward linkages, that is         12.5% of its post-tax profit in a range of
employment equity plan.                         help to develop businesses which sell our       corporate citizenship programmes that
     One example of SAB Ltd’s support           products. In these ways the economic            address the country’s education, health,
is an owner-driver scheme for distributing      benefits of our activity are spread as           water and infrastructure needs.
its products to market. Started in 1987,        widely as possible.
more than half the company’s deliveries
are made through 248 individual drivers.
Each driver employs a crew of at least
four people, so this R176 million
(US$24.9 million) project provides more
than a thousand jobs and has created
nearly 250 independent businesses.
When a new driver wants to join the
scheme, SAB Ltd retains ownership of
the truck during the first phase, lasting
one to two years, with the driver paying
22 SABMiller plc


SABMiller companies aspire to be good        Corporate social investment                    days are offered, aimed at equipping
corporate citizens in the many local         An essential part of our commitment to         individuals with an understanding of their
communities where we operate around          community engagement is corporate              circumstances and providing life skills.
the world. In over 40 countries, we have     social investment, that is the making          Then a four-week, action-based,
81 breweries and 27 bottling plants.         of cash and sometimes in-kind                  business start-up course gives
Each of those communities has its own        contributions to a wide range of projects      individuals the opportunity to test ideas
needs and concerns, so our approach is       in the communities where we operate.           and produce business plans. Ongoing
to consult and then respond according        Typically, these are grass roots projects      help is often necessary, and support is
to local priorities.                         to address pressing local needs, chosen        provided for at least a year in order to
                                             in consultation with those affected.           reduce the risks associated with start-up
Our guiding principles commit SABMiller      Many of the most significant have been          ventures. A family support module has
companies to be a good neighbour in          running for five or more years, especially      been introduced so spouses and/or
our local communities and to consult         in our most established businesses             children can also become part of the
regularly. The range of local engagement     in South Africa and the USA. The value         Noah process.
activity is very wide, involving regular     of these contributions amounted to                  SABMiller companies are also
dialogue with interested parties, holding    US$12.9 million, equivalent to 0.9%            engaged in environmental and health
meetings with government officials,           of group pre-tax profits, with education,       projects. Tanzania Breweries Ltd (TBL)
organising brewery tours, and supporting     health and welfare, and economic               is supporting a clean-up operation in
community organisations. Some                development being the main focus areas.        Mchikichini Ward, Dar es Salaam –
companies undertake formal surveys to            The range of projects around the           a deprived neighbourhood of some
assess opinions about their responsible      world is very diverse, as individual           15,000 residents with poor sanitation
business behaviour and overall               companies reflect local needs and               and frequent outbreaks of cholera and
reputation and findings are considered        priorities. Some are focused on                malaria. In partnership with the German
in determining future actions.               developing the local economy or                Development Service, the project aims to
     Increasingly, our companies             assisting previously excluded groups.          train and empower a community-based
are producing their own corporate            Many are longstanding engagement               organisation employing local residents
accountability reports or expanding          activities. Since 2000, for example,           to keep the drains clear and collect solid
alternative networks to communicate          Miller Brewing Company has awarded             waste. After the first year, the project
with local stakeholders. In the year under   US$450,000 to more than 40 urban               hopes to be self-supporting by levying
review, our companies in countries as        businesses and hosted 20 seminars              a fee for its services. TBL is contributing
diverse as the Canary Islands, USA and       through the award-winning Miller Urban         approximately half the set-up costs,
Poland have done so, and this is a trend     Entrepreneurs programme. This                  some Tsh20 milllion (US$19,000), to the
we intend to encourage.                      encourages current and aspiring                project, which began in October 2003.
     Our efforts have been recognised        business-minded professionals to pursue             TBL is also helping with the
in independent surveys. In the year          their entrepreneurial dreams.                  construction of Pawaga Secondary
under review, for example, Tanzania              Since 1998, SAB Ltd has run                School in the Iringa region. Included are
Breweries Ltd was voted as the ‘Most         Project Noah to help individuals               ten classrooms, accommodation for
Respected Company’ in a Tanzanian            overcome the negative effects of               teachers and an office block. The urgent
survey, and achieved third position in       redundancy/retrenchment. It enables            need for the secondary school was
East Africa as a whole. For the fifth year    them to rebuild their self-confidence           triggered by earlier successes in enrolling
running, SAB Ltd was judged ‘Most            and motivation, determine the options          children into primary schools under
Caring Company’ in the annual Business       available and make informed decisions          the government’s Primary Education
Social Monitor survey.                       about their future. Initially, nine training   Development Programme. TBL
‘  An essential part of
our commitment to
community engagement
is corporate social

contributed some US$20,000 towards
completing the buildings.
    Other SABMiller companies are
                                                Tanzania Breweries work in partnership to support a clean-up
                                                operation in a deprived neighbourhood of Dar es Salaam.

also involved in supporting education
and welfare projects, benefiting young
people. In Mozambique, for example,
Cervejas de Moçambique (CDM) is
supporting Cidadela das Crianças
(Children’s Town), home to some 80
abandoned or orphaned children in the
Costa do Sol area, near Maputo. As well
as a home, the centre offers education
and life skills training, with another 400
children attending as day scholars. Run
by a local association together with the
Ministry of Social Welfare, CDM is
contributing US$20,000 over two years.
Dr Virgilia dos Santos Matable, Minister of
Women and Social Security Coordination,
has commented: “CDM is one of the
private sector companies in Mozambique          Tanzania Breweries was voted first in the ‘Most Respected
                                                Company’ in a Tanzanian survey.
with whom we have a particularly good
relationship. They have been proactive and
responsive to our call for assistance in      Moving forward
supporting our development projects.”         Looking ahead, our operating companies
    CDM has also been supporting              will continue to be encouraged to
Mozambique’s hard-pressed education           increase their local engagement and their
system, as it expands to meet the needs       own accountability reporting at country
of massive urban growth. Working with         level. We will also be sharing best
the Fundação Para O Desenvolvimento           practice on community investment
da Comunidade, CDM has helped fund            around the world, learning from the
the construction of Moagoanine Primary        longer-established projects. In recent
School in Maputo – which operates on          years, SABMiller as a group has grown
a shift system due to overwhelming            rapidly and today spans four continents.
demand, with children attending one of        We are now reviewing and revising the
three daily teaching rosters – and helping    extent of our engagement with non-profit
reconstruct 18 classrooms at nearby           and intermediary organisations at
Hulene Primary School. Some 6,800             international level, to reflect better our
children have directly benefited, and          responsibilities in the communities in
CDM has contributed more than                 which we operate.
US$100,000 to date.
24 SABMiller plc


Our soft drinks
                                           SABMiller’s beverage interests extend
                                           beyond brewing to soft drinks operations,
                                           both as self-standing businesses and,
                                           in some cases, alongside a brewery.
                                           We are one of the largest bottlers of
                                           Coca-Cola products and, working
                                           in partnership with The Coca-Cola
                                           Company (TCCC), we seek to manage
                                           our corporate accountability issues in soft
                                           drinks – based on our guiding principles
                                           – just as responsibly as in our brewing

                                           Our interests in soft drinks include a
                                           74% holding in ABI, the largest bottler in
                                           South Africa, and smaller operations in
                                           Angola, Botswana, Swaziland, Lesotho,
                                           Zambia and the Indian Ocean Islands
                                           of Comoros and Mayotte. Through
                                           our subsidiary, Bevco, we have
                                           an exclusive agreement with TCCC
                                           accounting for almost 65% of the soft
                                           drinks markets in Honduras and El
We seek to manage our partnerships         Salvador. In addition, SABMiller owns
responsibly in particular in relation to
marketing of carbonated soft drinks.
                                           Appletiser in South Africa, a company
                                           producing sparkling fruit juices.
                                               SABMiller’s involvement in soft
                                           drinks is growing and we are aiming to
                                           extend the range of products and brands
                                           to meet the different consumer needs
                                           for refreshment, as well as nutrition
                                           and replenishment.
                                                                                                                            SABMiller plc 25

Business partnership                            in the direct promotion and availability       All SABMiller bottling plants ensure
The business partnership through which          of its products in schools and other           effluents are treated, whether through
these branded soft drinks reach final            children orientated settings.                  their own effluent plants, or, as in South
consumers is known as the Coca-Cola                  SABMiller bottlers are committed          Africa, through municipal systems. Here,
‘system’. The Coca-Cola Company                 to the promotion of healthy, active            effluent is separated from storm water
(TCCC) owns the brands, decides on              lifestyles for young people, for example,      and its concentration and volume reduced
product contents and promotes them in           by sponsoring educational and sporting         before entering the drainage system.
the market place. TCCC licenses bottlers        bodies. In South Africa, this includes joint
in each region, which then manufacture          support for national sporting events such      Solid waste management
and distribute the actual products. That        as the Comrades marathon, the Duzi             and minimisation
is our role. In South Africa, for example,      River Canoe Marathon, Craven Week              SABMiller bottling operations are all
we are responsible for 60% of sales             rugby for schools and the Coca-Cola            conscious of the need to reduce solid
with three other bottling companies             Cup soccer tournaments.                        waste and manage the impacts both in
responsible for the remaining 40%.                                                             their own operations and in the hands of
The bottler’s role is to source ingredients,    Nutrition                                      consumers. Within manufacturing plants,
other than the concentrate, and                 Our product range includes mineral             waste including PET, plastic closures,
packaging and to run the bottling lines         water, fruit juices, sport and energy          glass, paper, cartons and boiler coal is
that combine the concentrate and                drinks and vitamin-enhanced nutritional        collected, sorted and recycled. Where
syrups with water, sugar, carbon dioxide        drinks. The Coca-Cola Company is               glass bottles are used, a voluntary
and other inputs. We then promote               responsible for the scientific consumer         deposit system ensures high return
and distribute the final products to a           and product development research.              and reuse rates. In South Africa, ABI
network of independent wholesalers,             Suppliers of raw materials and                 supports the glass industry initiative to
supermarkets, shops, restaurants and            ingredients are subjected to quality           implement a voluntary levy system,
hotels, and also to many informal outlets.      assurance process audits to ensure             which is trying to increase the recycled
     Each business in the system and            that the consumers’ nutrition and safety       content of new glass purchases and
the wider network is responsible for            needs are not compromised.                     extend collection of non-returnable glass.
managing its own operations in keeping              We recognise that there is a debate             A new project in South Africa
with its business principles.                   around the food and beverage industry          involves ABI working with the Southern
     Ultimately, it is a partnership, and       with regard to the various causes of           and East African region of TCCC in
the local bottling operations take part         obesity. This has not surfaced as a            the industry’s PET recycling project.
in joint planning with the regional and         major public health issue in the countries     ABI is helping set up a bottle recycling
local offices of TCCC, addressing both           in which we have significant soft drinks        infrastructure that has so far collected
operational issues and wider social             operations. We will monitor the debate         over 5,000 tonnes of PET bottles, mainly
responsibility, covering packaging,             and keep the issue under review.               from waste disposal sites. These are
procurement, marketing, human                                                                  being converted into polyester resin for
resource management and public affairs.         Economic impacts                               re-use. The aim ultimately is a bottle-to-
                                                The process of producing and delivering        bottle PET recycling process and the
Quality                                         soft drinks to customers creates jobs          scheme will be expanded to include
TCCC sets and controls rigorous                 and income for those involved and tax          SABMiller’s other Southern African
standards, so as to maintain the integrity      revenues for governments. This is              bottlers. Often we work to help educate
and quality through a process known as          multiplied when the upstream and               local communities on better waste
The Coca-Cola Quality System – TCCQS.           downstream impacts are taken into              management. Angola, for example, has
This process is aligned with SABMiller’s        account, ranging from raw material             structured a process for shipping post-
own internationally accredited quality          suppliers to retailers and restaurants.        consumption beverage cans to South
processes and implemented in all our                                                           Africa for recycling by the not-for-profit
bottling operations.                            Environment                                    organisation, Collect-a-Can.
                                                As the manufacturer, SABMiller bottling
Social impacts                                  operations play a crucial role in water        Future commitments and targets
                                                conservation and purification, energy           As our soft drinks operations continue
Responsible marketing                           efficiency and solid waste management.          to grow, we will increase our monitoring
SABMiller takes into account The Coca-          On water minimisation, the bottling            of key performance and trend data
Cola Company’s principle of responsible         process for returnable glass traditionally     to allow us to set targets, site by site.
marketing, particularly as it affects minors.   has higher water consumption than              On economic impacts, we will keep
     Accountability for marketing is clear      the PET (plastic bottle) production            under review ways to develop the wider
– the bottling operations are responsible       process. In ABI’s largest returnable           benefits, working through formal and
for ‘below the line’ communication and          glass production facility north of             informal retailers. We will also continue to
trade marketing, while TCCC determines          Johannesburg, a comprehensive                  work in partnership with The Coca-Cola
all the ‘above the line’ brand marketing,       programme has significantly reduced             Company across all issues.
including consumer advertising.                 the water consumption from a ratio
SABMiller marketing management                  of three litres of water to one litre of
applies the principle of adult consent          beverage produced down to 2.5 litres.
26 SABMiller plc

SABMiller formalised the management of        communities in which we operate are to       and reporting, reviews changes in
accountability and social responsibility      view us as credible.                         stakeholder expectations, and decides
some seven years ago. The approach is             SABMiller’s governance structure         what external codes for corporate
based on our own core values, taking          reflects an integrated and flexible            behaviour and best practice guidelines
into account legal and regulatory             approach. Shareholder and other              are appropriate. The CARAC assesses
requirements, stakeholder and societal        stakeholder interests alike are managed,     the performance of management against
expectations and current market               controlled and accounted for at board        key performance indicators (KPIs),
practices. The corporate accountability       level. This has placed governance in         targets and benchmarks by receiving
and risk assurance committee (CARAC)          the role of lead agent not only in           and considering reports from the
assists the board in the discharge of its     consolidating the various aspects            SABMiller businesses.
duties relating to corporate accountability   of corporate accountability, social
and associated risk and opportunities.        responsibility and sustainable               Accountability systems
Each SABMiller operation reports              development, but also in incorporating       The group corporate accountability team
internally on its economic, environmental     these agendas into mainstream                is tasked with implementing activities as
and social impacts every quarter and          business activities.                         directed by the CARAC. The department
a full review is published annually.                                                       reports to the director of corporate affairs
                                              Corporate accountability and risk            who is a member of the executive
Interest in the behaviour of companies        assurance committee                          committee and so provides the
continues to grow, internationally and in     The scope and responsibility of board        management link to operational decision-
many of the countries where SABMiller         committees is detailed in the annual         making. This link is being strengthened,
operates. Mistrust in systems of              report on pages 30 to 36. Direct             with a new corporate accountability
corporate governance, fuelled by a            responsibility for our economic, social      steering group of senior executives from
few high profile scandals, is resulting        and environmental performance is             business units being formed in the
in calls for increased legislation and        undertaken by the CARAC under the            current year to increase representation
regulation, and for greater transparency      chairmanship of the senior non-executive     and participation across the group.
and accountability.                           director, Lord Fellowes.                          Previously a set of six sub-
     Some in business fear this only              The CARAC’s main objective is to         committees, comprising co-opted
brings increased costs, bureaucracy and       assist the board in discharging its duties   management specialists in the areas
intrusive, non-value adding processes.        relating to corporate accountability,        of finance and economics, human
Within SABMiller, we believe an effective     taking into account the risks to             resources, trade relations, communities,
balance is possible between the               corporate reputation as identified in         governments and the environment met
challenges of successful entrepreneurship,    the company’s risk management                periodically. In 2002 they began a
and remaining accountable to our              process. The committee also provides         thorough review of internal policies and
stakeholders for managing the resources       independent and objective oversight,         reporting systems, which was completed
of the business. Through a values-based       and reviews accountability information       during 2003. Going forward, they will
approach, we can achieve our own              presented by management. During              meet on a project basis, with the new
internal governance standards and             the year, CARAC’s formal terms of            steering group responsible for ensuring
demonstrate to external stakeholders          reference were amended to clarify that       the accountability agenda is aligned
that we are acting within both the letter     responsibility for risk management           with the major strategic functions of
and spirit of the law in meeting society’s    processes lies with the audit committee.     the business.
expectations. Transparent corporate               To achieve its objectives, the CARAC          At operating level, country managing
governance is no longer optional if our       monitors external developments in the        directors are responsible for ensuring
investors, partners, employees and the        practice of corporate accountability         adherence to the group’s values and
                                                                                                                       SABMiller plc 27

business principles. They are supported        •   External audit of our                    to audit perceptions among a cross
in some cases by divisional-level                  financial statements by                   section of opinion formers in our major
committees, which deliberate on issues             PricewaterhouseCoopers LLP,              markets and consulted a selection of
of concern including aspects of                    whose scope of work and                  employees too.
accountability. Performance within the             responsibility is set out in the             Reflecting the increased size and
operating companies is monitored and               annual report on page 53                 international spread of the business,
assessed every quarter, through an             •   The external assurance and               during 2004 we are expanding
internal reporting process based on a              commentary provided by The               engagement at group level and will
selection of core KPIs. Every six                  Corporate Citizenship Company,           report back on the outcomes in future.
months the results are presented                   as set out on page 45.                   We are also planning to extend existing
for consideration to the board.                                                             stakeholder engagement at operating
     At the end of the year, a                 Reporting scope and boundaries               company level and are exploring the
comprehensive questionnaire, covering          For the purpose of internal accountability   scope for increased accountability
more than 250 issues and indicators,           reporting, all businesses where SABMiller    reporting country-by-country.
forms the basis of annual reporting.           has day-to-day management control or
Local managing directors personally sign       influence are included in the quarterly
off for its accuracy and completeness.         accountability core KPI monitoring.
In addition each managing director and         Our external accountability reporting
finance director provides an annual ‘letter     maintains this scope, but there is a
of internal representation’ certifying their   two-year exemption for operations newly
operation’s compliance with SABMiller          acquired or built. Under this approach,
systems of control. These include              our Angolan bottling companies are
environmental protection, ethics, local        included in the report for the first time.
labour laws, a range of notifiable                  During 2003, SABMiller reached
occurrences and progress towards               agreement with the shareholders of Birra
achieving the full corporate accountability    Peroni S.p.A in Italy to acquire a 60%
framework of mission, values and               interest. Our Indian subsidiary entered
guiding principles.                            into a joint venture with Shaw Wallace
                                               and Company Ltd to combine both
Standards and assurance                        brewing interests in a substantially new
We remain committed to adhering to             business. For accountability reporting
external voluntary codes and standards         purposes, these transactions fall within
and, where appropriate, participating in       the two year exemption period.
their development and application.             Accordingly Italy and India are not
These include the Universal Declaration        reported on here, and only
of Human Rights, OECD Guidelines               our long-standing Chinese businesses
for Multinational Enterprises,                 are included to the extent that data
Commonwealth Business Council                  are available.
Corporate Governance Principles, the               Southern Sun Hotels and Gaming
Global Reporting Initiative and AA1000.        group, which was included in previous
    During the year under review, we           reports, was partially disposed of in
retained our memberships of Business           March 2003 with Tsogo Investments
for Social Responsibility in the United        now having a 51% interest and thus
States, AccountAbility in the United           controlling the business. These operations
Kingdom and the International Business         are therefore not included.
Leaders’ Forum. We also participated in
the UNEP/SustainAbility assessment of          Stakeholder engagement
global corporate reporters. While the          For the group-wide framework, we
results were not published, we were            have identified our stakeholders as:
pleased to have improved our ranking           investors, business partners, employees,
for the third year running.                    customers, consumers, suppliers,
    Our systems of performance                 governments, communities and their
monitoring, assessment and reporting           representative organisations; in addition
undergo an assurance process, to               we regard future generations as a
ensure the results are material, complete      stakeholder concerning the environment
and responsive to the needs of our             and our commitment to sustainable
stakeholders. Our approach to                  development. During the year under
assurance operates at three levels:            review, we have conducted an evaluation
                                               of key audiences and the representative
•   Internal audit checks on internal          organisations with whom we engage.
    systems of control and reporting           We commissioned an external agency
28 SABMiller plc

Guiding Principles
At SABMiller we seek to meet our goal of creating long-term value for our
shareholders, while living out our values and guiding principles throughout
our operations.
Shareholders                                             settlement of accounts. We seek to work         •   Local economic impact SABMiller
SABMiller is committed to increasing long-               together to achieve consistently high               companies seek to have a positive impact
term shareholder value, exceeding that                   standards in materials and services supplied.       on local economies, through profitable and
achieved on comparable investments.                  •   Supplier diversity SABMiller encourages             sustainable commerce.
•   Corporate governance SABMiller is                    diversity within all the group’s commercial     •   Social aspects of products SABMiller
    committed to an open governance                      associations, particularly the involvement of       acknowledges that alcohol products
    process, which protects the sustainable              disadvantaged people, minorities and local          can be issues of concern, and we
    value and reputation of the company by               businesses around the world.                        therefore promote the responsible use of
    managing the business effectively and in                                                                 our products.
    compliance with legal requirements and                                                               •   Social development SABMiller seeks to
                                                     SABMiller seeks to be a preferred employer.
    best practice in governance.                                                                             be actively involved in partnerships which
                                                     •  Salary and benefits SABMiller remunerates
•   Return on investment SABMiller seeks to                                                                  bring measurable benefits to people in
                                                        its employees fairly, according to skills and
    maximise total shareholder return (TSR).                                                                 communities where it operates.
                                                        performance, by reference to competitive
•   Communication with investors, lenders                                                                •   Consultation SABMiller seeks to be a
                                                        industry and country conditions and within
    and analysts SABMiller values the support                                                                good neighbour in local communities.
                                                        a rewarding work environment.
    of all its providers of capital and seeks to                                                             We will consult on social issues and the
                                                     •  Health and safety SABMiller recognises
    communicate with them regularly and                                                                      environmental impacts of our operations.
                                                        that productivity is directly related to the
    openly, providing reliable and timely
                                                        health, safety and welfare of its employees.     Governments
    information about the company.
                                                        SABMiller companies promote continual            SABMiller will engage constructively with
Partners                                                improvement in health and safety                 the governments of the countries in which
Guided by its values, SABMiller seeks                   performance, through the involvement of          it operates.
to build long-term relationships with its               employees and the auditing of compliance         •    Compliance with the law SABMiller
business partners to achieve mutual                     with health and safety legislation and                companies will comply with the laws
sustainable success.                                    industry safety standards.                            and regulations of the countries in which
•   Franchisors and partners SABMiller seeks         •  Employee development SABMiller seeks to               they operate.
    to do business with those joint venture             create an environment in which all individuals   •    Competition SABMiller believes in free
    partners and franchisors that share its             and teams may develop their full potential for        market competition and will conduct
    company values.                                     the benefit of themselves and the group.               its activities within the framework of
                                                     •  Employee diversity SABMiller companies                applicable competition laws.
Other providers of capital
                                                        understand and respect the wide range of         •    Party political support The group and
SABMiller will meet its obligations towards
                                                        human diversity in which they operate and             its subsidiaries will not make political
other providers of capital.
                                                        encourage inclusiveness with regard to                donations other than by exception, and
Customers/Consumers                                     human resource practices, irrespective                in an open and transparent manner.
SABMiller provides brands and services                  of (among others) nationality, race, gender
                                                                                                         Current and future generations
of consistently high quality and value.                 and physical disabilities.
                                                                                                         SABMiller is committed to the goal of
•   Value, price and quality SABMiller provides      •  Fair employment practices SABMiller
                                                                                                         sustainable development, including the
    brands and services of consistent high              is committed to fair treatment of
                                                                                                         natural environment.
    quality and value, to meet the needs and            employees: timely, honest and respectful
                                                                                                         •   Material and energy use SABMiller
    standards of its consumers and industry             communication, and freedom of
                                                                                                             companies will continuously monitor
    customers worldwide.                                expression. SABMiller recognises the right
                                                                                                             and seek to minimise the environmental
•   Product safety SABMiller is committed to            to freedom of association of employees and
                                                                                                             impact of the movement and use of
    providing products which are safe for their         further recognises that trade unions and
                                                                                                             materials, energy, facilities and other
    intended use.                                       collective bargaining form a normal part of
                                                                                                             resources in their operations. They will
•   Advertising and promotions SABMiller                labour/management relations. Appropriate
                                                                                                             implement natural resource conservation
    advertises and promotes its products in an          employee participation in problem-solving
                                                                                                             programmes, particularly water usage
    honest and ethical manner, which respects           and decision-making is encouraged.
                                                                                                             in beverage operations.
    the values of its consumers’ societies.          •  Ethical behaviour SABMiller promotes
                                                                                                         •   Effluents and emissions SABMiller
•   Innovation SABMiller aims for continuous            ethical behaviour and will not tolerate
                                                                                                             companies will adapt and implement
    improvement at all levels in the group by           violation of human rights nor any illegal
                                                                                                             technologies to limit and/or reprocess
    encouraging employees to be creative,               activity, including bribery and corruption.
                                                                                                             effluents, emissions and wastes, including
    innovative and open to new ideas.                   Group employees may not comment
                                                                                                             refrigerants, and to rehabilitate resources
                                                        unfavourably on the products, management
Suppliers                                                                                                    where practical.
                                                        or operations of competitors.
SABMiller engages its suppliers to achieve                                                               •   Reduce, reuse and recycle SABMiller
long-term mutually beneficial relationships.          Communities                                             companies will promote reuse and recycling
•   Suppliers and services SABMiller always          SABMiller contributes to improving                      initiatives both in business operations and
    endeavours to meet its legal and contractual     the quality of life in the communities                  in communities, particularly of used
    obligations to suppliers, including the timely   in which it operates.                                   packaging materials.
                                                                                                                          SABMiller plc 29


The first responsibility of a business is to be successful at doing its job –
providing the quality goods and services that customers rely on, at a
competitive price, thereby creating wealth for the benefit of everyone with
a stake in the enterprise. SABMiller seeks to conduct its business ethically
and responsibly, in the firm belief that this approach supports its long-term
commercial success.

                                               Maximising shareholder return                 (See Graph 1.) We also estimate the
Impacts at a glance                            The value which a company returns to          number of jobs this spending sustains
•   Cash value added up 44% on the             its owners is best measured by total          in our suppliers, as well as the larger
    previous year, with governments taking     shareholder return (TSR) – the                number supported in our forward linkages
    a record share.                            combination of share price appreciation       as our products go into the market and
•   Total shareholder return of 74% over five   and dividends returned over the medium        reach their end consumers. We have
    years since London listing.                to long term. Recent measures of              updated these multipliers for Miller
•   1.6 million jobs supported among           shareholder return are impacted by the        Brewing Company, using Beer Institute
    suppliers and distributors.                significant decline in equity indices over     data as this is the best available for our
•   Average value of purchasing made           the past five years. However, since            sector. (See Table 3.)
    in-country for the group at over 80%.      SABMiller moved its primary listing to the         In South Africa, our companies try
•   Record equity spend with suppliers in      London Stock Exchange in March 1999           to extend business opportunities to
    South Africa.                              the FTSE 100 has produced a TSR of            enterprises that promote participation
•   Stronger checks on supplier ethics.        negative 17% while the group has              of previously disadvantaged individuals,
                                               produced a TSR of positive 74% as             including black people, women and
                                               at the market’s close on the date of our      people with a disability. Under
                                               preliminary 2004 results announcement.        ‘commercial equity’, they set targets
                                                    A breakdown of our shareholders is       to increase the amount of purchasing
                                               shown in Table 1 and further information      they make from businesses that are
                                               is provided in the annual report.             owned and operated by people who
                                                                                             were previously socially, politically
                                               Local economic impact                         and economically disadvantaged.
                                               As described more fully previously (see       (See Table 4.) Examples of these
                                               pages 19 to 21), our business activities      measures are given on page 20.
                                               benefit a broad range of stakeholders.
                                               We use a statement of cash value added        Quality and innovation
                                               to demonstrate this. (See Table 2.)           In SABMiller, we are committed to
                                               In addition, we monitor the extent of local   providing customers with products
                                               purchasing, country by country and where      and services that are of consistently
                                               this is relatively low, we are seeking to     high quality and value, and always safe
                                               build economic and agricultural capacity.     for their intended use. In the year under
30 SABMiller plc

Economic                                      Supplier ethics
                                              In 2003’s accountability report we
                                              committed to exploring with our suppliers

review                                        how best to extend into the value chain
                                              the standards of corporate behaviour we
                                              set for ourselves. Our aim is for SABMiller
                                              companies to make major suppliers
                                              aware of the standards we expect and, to
                                              the extent practical, assess adherence.
                                                   As part of the trade relations review,
                                              each company reports on whether an
review, our accountability review process     established process is in place to
was revised and extended by a specialist      communicate SABMiller’s ethics and
trade relations working group. An             values to suppliers. They also now
extended range of performance data            report whether they are satisfied that no
and systems information from group            supplier has deliberately breached local
companies is now assessed, covering           environmental legislation or recognised
product integrity, quality, innovation and    ILO standards. A formal communications
customer service.                             process was operating in all but six
    All but one company report having         instances. However, in four of these,
documented product and process                informal procedures were in place to
specifications meeting group standards         ascertain that no breaches had occurred.
for all brands. All except four report that   The position in the remaining two is
products have been despatched in              being rectified.
keeping with group quality standards;              In addition, we have explored the
the four reported exceptions have             feasibility of direct engagement with
measures in hand to achieve required          major suppliers. After an initial exercise to
performance levels.                           assess our supply chain, questionnaires
                                              were sent to a selection of large ‘tier one’
Responsibility in trade                       suppliers in the United States, covering
Our guiding principles commit SABMiller       both environmental issues and labour
companies to advertise and promote            standards on health and safety. In almost
their products in an honest and ethical       all cases, the answers were satisfactory;
manner, respecting the values of the          where not, corrective action is being
societies in which they operate. The          taken. Going forward, we are now
annual accountability review requires our     considering how best to engage on a
companies to report whether they adhere       broader range of accountability issues
to the SABMiller marketing code of ethics     and developing a more formalised
and the number of instances where             approach to addressing accountability
complaints are upheld about marketing         in supply chain management.
practices. The only exception is Miller
Brewing Company which, along with the
whole beer industry in the United States,
is required to adhere to its own industry
marketing code of ethics on compliance
with Federal and State laws regulating
the sale of beer. Examples across the
group of cases reported with regard to
competitor complaints or infringements of
local industry or government marketing
regulations were as follows:
•    In Tanzania, a competitor
     complained and Tanzania Breweries
     agreed to share its third party
     distribution network with its
     competitor’s product.
•    In the USA, where an Administrative
     Case Notification was received
     from the Texas Alcoholic Beverage
     Commission concerning promotional
     activity at the Lucky Eagle Casino;
     the charge is denied but the case
     was outstanding at year end.
                                                                                                                      SABMiller plc 31

Table 1
Ordinary shareholding analysis
                                                                                                         Number of            Percentage of
                                                                                                       shareholders            share capital

Portfolio size
1 – 1,000                                                                                                 16,886                    0.54
1,001 – 10,000                                                                                             5,712                    1.69
10,001 – 100,000                                                                                           1,248                    4.30
100,001 and over                                                                                             658                   93.47
                                                                                                          24,504                      100
Individuals                                                                                               17,692                    3.66
Pension and provident funds                                                                                  320                    4.72
Banks, nominees, insurance and finance companies                                                            1,240                   33.50
Trust funds and investment companies                                                                       3,570                   13.62
Other corporate entities                                                                                   1,682                   44.50
                                                                                                          24,504                      100
Holdings extracted from the register of ordinary shareholders at 31 March 2004.
Details of individual holdings exceeding 3% are given in note 36 of the annual report.

Table 2
Group cash value added
for the year ended 31 March 2004
                                                                                                                     2004             2003
                                                                                                                    US$m             US$m

Net cash generated
Customers, consumers and investment income
Cash received by SABMiller for the supply of its products                                                       11,239             8,100
Cash returns on investments (1)                                                                                     87                68

Cash payments outside the group for
materials, facilities and services purchased                                                                     (5,716)           (4,278)

Group cash value added                 (2)                                                                        5,610            3,890

Distribution of cash value added
Remunerate employees for their services (3)                                                                       1,233              960
Pay direct and excise taxes to state treasuries (4)                                                               2,440            1,567
Provide lenders with a return on borrowings                                                                         219              170
Provide shareholders with cash dividends (5)                                                                        463              340
Corporate social investment (6)                                                                                      13               13
Political donations (7)                                                                                               2
Cash retained in the business to fund future growth                                                               1,240               840
                                                                                                                  5,610            3,890
(1)  Dividend income and interest received.
(2)  The physical cash that SABMiller received during the year from its operations.
(3)  Employee salaries and benefits, including amounts paid to government institutions (employee taxes, levies and unemployment funds)
     on behalf of employees. This also includes the company contributions.
(4)  This includes company tax, secondary tax on companies (payable as a result of declaring dividends) and excise duties.
(5)  Shareholders receive dividends and capital growth in return for the funding provided. Only dividends will lead to an outflow from the
     company. Capital growth is realised on the various stock markets.
(6)  Voluntary investment of funds in the broader community, where the target beneficiaries are external to the company. This excludes
     legal and commercial activities or where the purpose is exclusively commercial with no significant public or social good, such as pure
     marketing, employee benefits or public relations activities.
(7)  Political donations of US$0.7 million were not split out for the purposes of the cash value added for 2003.
(8)  Cash retained to fund future acquisitions and/or asset purchases used to enhance the earning potential of the company.

                                               Distribution of cash value added
                                                  Remunerate employees for their services(3) 22.0% (2003: 24.7%)
                                                  Pay direct and excise taxes to state treasuries(4) 43.5% (2003: 40.3%)
                                                  Provide lenders with a return on borrowings 3.9% (2003: 4.4%)
                                                  Provide shareholders with cash dividends(5) 8.3% (2003: 8.7%)
                                                  Corporate social investments(6) 0.2% (0.9% of pre-tax profit) (2003: 0.3%)
                                                  Cash retained in the business to fund future growth(8) 22.1% (2003: 21.6%)
32 SABMiller plc


Graph 1
Supplies sourced in-country


                     10                                                                                    2003
                          SABMiller   SABMiller   SABMiller     Miller   Central    Other      SAB Ltd
                           Group       Africa      Europe     Brewing    America   Beverage
                                                              Company              Interests

Table 3
Miller Brewing Company: jobs multiplier

Directly employed                                                                                                                5,536

Backward impact: Jobs supported in the supply chain
In agriculture                                                                                                                  4,338
In business and services                                                                                                       13,860
In finance                                                                                                                       3,530
In manufacturing                                                                                                                8,753
In transport and communication                                                                                                  3,361
In other industries                                                                                                             9,756
Total                                                                                                                          43,598

Forward impact: Jobs supported in retail and distribution
In wholesaling                                                                                                                 12,570
In retail                                                                                                                      93,552
Total                                                                                                                        106,122
Total employment                                                                                                             155,256

Source: Beer Institute using 2003 data.

Table 4
Commercial equity
                                                                                      Amount          Percentage of   Percentage increase
                                                                                       US$m         total purchases         2003 to 2004

SAB Ltd                                                                               103.7                 11.7                  52.5
ABI                                                                                     38.9                  6.2                      –(1)
Total                                                                                 142.6
      Not previously determined using same basis of calculation.
                                                                                                                        SABMiller plc 33


Social review
SABMiller’s approach to corporate accountability recognises that a business is
not just an economic entity generating wealth. It also has impacts in the social
sphere: these affect the people who contribute their labour, consumers who
use our products, governments who depend on the revenues we generate
and the communities who are our neighbours.

                                               Employers of choice                         (retirement benefits being the exception)
Impacts at a glance                            SABMiller companies aspire to be            has improved during the year under review
•   Performance up in 11 out of 12 key         employers of choice. Our guiding            and further targets for improvement have
    indicators of human resource management.   principles set out the commitments we       been set going forward.
•   Investment in training increased to        make on the full range of human resource
    3.5 days per employee on average.          (HR) management issues, such as health      Skills and development
•   Overall accident rates down.               and safety, respect for human rights,       Investment in training across the group
•   Stronger approach to business ethics       opportunities for personal development      averages 3.5 days per employee,
    implemented in local operations.           and ethical behaviour. Graph 2 shows the    excluding Miller Brewing Company (Miller),
•   Contribution to public revenues exceed     regional spread of employees around the     up on the previous year’s performance of
    US$3,000 million.                          world while Graph 3 shows the split by      3.2 days. (See Graph 4.) The required
                                               grade, both reflecting the scope of the      level of investment in training varies
                                               annual report.                              according to the individual operation’s
                                                                                           level of development, particularly the
                                               Managing key performance issues             technical complexity of its equipment.
                                               We monitor worldwide HR performance
                                               through a selection of key performance      Health and safety
                                               indicators. However group averages can      The first responsibility of any employer
                                               mask variability in performance, as large   is to provide working conditions that are
                                               well-performing operations can influence     as safe as practical. Self-assessment of
                                               the group-wide average.                     the management approach to health
                                                    So two years ago we developed          and safety in our local operations,
                                               a new grading system, to assess the         including HIV/AIDS, shows this is one
                                               management approach of each operation       of our strongest performing areas, with
                                               on 12 priority HR issues. We reported       the emphasis on prevention and the
                                               these for the first time in 2003, along      creation of a safety culture. (See Graph 5.)
                                               with targets for improvement, and have      In addition, we monitor two indicators that
                                               repeated the approach this year.            show when systems and procedures fail
                                                    Each operation assesses its current    and accidents do occur: the total number
                                               approach against one of four stages of      of reportable injuries and the disabling
                                               development, according to a precise         incident frequency rate (DIFR), a
                                               definition, and sets itself a target for     benchmarkable indicator.
                                               improvement. The summary gradings for            The South African National
                                               the two years are presented in Figure 2,    Occupational Safety Association (NOSA)
                                               along with an example of the assessment     sets a best practice threshold of 1.5 for
                                               criteria (health and safety).               achieving its five star rating. Worldwide
                                                    Operations reported that management    our average DIFR performance bettered
                                               of 11 of the 12 priority HR issues          this at 1.2, down from a figure of 1.7
34 SABMiller plc

Social                                         seen in senior executives where the
                                               proportion increased from 3.6 to 24.4%.
                                               (See Graph 8.)
                                                                                            Human rights
                                                                                            SABMiller upholds the expectations
                                                                                            of the Universal Declaration of Human

review                                              We also monitor the number of
                                               expatriate executives working away
                                               from their home countries. Our general
                                                                                            Rights and believes its employment
                                                                                            practices also conform to the core labour
                                                                                            standards of the ILO. No SABMiller group
                                               approach is to invest in training so that    company employs or otherwise engages
                                               each business has the necessary skills       children under the age of 16.
                                               locally. However, when a new acquisition          Our guiding principles respect
                                               is being integrated, some transfer of        the freedom and equal dignity of all
                                               personnel is necessary. We also use          people without distinction of any kind,
                                               overseas postings as a way to further        such as race, colour, gender or religion.
three years ago. The majority of               experience in up-and-coming managers.        They pledge equal pay for equal work
operations are below 1.0, with Miller and      In total 156 employees were expatriate in    and fair remuneration, with adequate
Central America the main exceptions.           the year under review, including 40 in       protection for health and well-being.
(See Graph 6.)                                 Africa, 37 in North America and 64           They provide for reasonable working
     In total, there were 433 reportable       in Europe.                                   hours and periodic holidays with pay.
injuries among our employees. Over a                The extent to which disability is       Implicit is the preclusion of any use of
quarter of these occurred at Miller which      perceived by stakeholders to be a priority   slavery and their opposition to servitude;
reported a reduction of 7% in the number       issue is assessed, and where this is the     explicit is the acknowledgement of the
of injuries from the prior year. At Miller,    case, companies seek to incorporate          duties that the company owes to
an ammonia release resulted in a fine           appropriate action into their strategic      the community.
of US$20,000 with no resulting lost            business plans. Among those reporting             The guiding principles also explicitly
work days.                                     in the affirmative are South Africa,          recognise the right to free association,
     Most regrettably, two employees of        El Salvador and the Canary Islands –         to join trade unions, to choice in
ABI in South Africa lost their lives, as did   countries where governments have             employment, and to just and favourable
the crewman of an owner-driver operating       set a target employment level for people     conditions of work. Average group-wide
under contract.                                with a disability.                           trade union membership is 43%.
     As access to medical facilities                                                        (See Graph 9.)
varies widely in the countries where           Business ethics
we operate, the annual accountability          In a further strengthening of our            Employee engagement
review also surveys the extent that our        approach, all SABMiller companies were       We strongly believe that effective
employees are covered either by state          required to have their own local written     HR management results in employee
medical facilities or by company medical       codes of conduct or ethics. The              satisfaction and improved performance,
care. In addition, availability of             accountability review confirms this was       which ultimately benefits the business.
occupational healthcare is reported.           achieved during the reporting period, with   Our commitment to our employees is
On both measures, the position is              the exception of Angola which launched       reflected in loyalty to the company. 56%
now nearly universal.                          its code in April 2004. Companies are        of employees across the group have more
                                               required to report if they publicised the    than five years service with their company.
Diversity                                      code to employees during the year – all      (See Graph 10.)
In addition to measuring the management        except two did so – and whether there            Employee relations remain very
approach, we track several indicators          is general communication, formal or          positive, with no days lost due to strike
that allow an assessment of diversity          informal, within the organisation about      action. During the year under review,
performance, including representation          procedures and activities that are           group companies report that a total of
of women in management. Women                  considered acceptable behaviour –            317 employees were involved in industrial
comprise 19% of the total workforce            all reported there was.                      tribunals. Of those concluded by the
and 22.3% of management. All business               Furthermore, companies are asked        year end, the company lost 10 cases
divisions except Miller showed an              to report on whether adequate processes      and 76 were settled.
increase, but Miller’s size caused the         exist to detect non-compliance with the
company-wide average to fall from              ethics policy. Generally the position is     Responsibility to consumers
23.2% the year before. (See Graph 7.)          strong but in those instances where          Our social impact as a business extends
     In South Africa, our businesses           mechanisms such as gifts registers are       to the use of our products by consumers.
monitor their progress in meeting targets      not yet in place, action is being taken.     We have reported earlier in this report
required under the Employment Equity           In addition, the audit committee has         on our approach to the social aspects
Act. Strong growth was seen across the         recently approved whistleblowing             of alcohol and soft drinks. To monitor
board for our South African businesses         arrangements for roll-out to group           performance of our policies, SABMiller
for the year under review. The proportion      companies to update processes in             companies report through the
of asian, black and coloured                   place as well as to fill in any gaps.         accountability review the number of
representation in the total South African      For the year under review, no incidents      complaints about marketing generally
workforce increased from 63.2% to              of bribery and corruption were               and about breaches of local codes
71.3% with the greatest increase being         reported.                                    of advertising practice. In the year
                                                                                                                            SABMiller plc 35

under review, complaints were upheld          are only made by exception and in              Engaging with communities
in three countries.                           accordance with local laws, after careful      We have reported above on our
     In the Canary Islands, 64 complaints     consideration, the following political         worldwide community engagement
were received by Compañia Cervecera de        donations were sanctioned during the year.     activity. One indicator is our voluntary
Canarias, mainly about an advert that              The group provided funding to             contributions to community causes.
included a pregnant woman. The advert         those political parties in South Africa’s      Our group-wide CSI policy is presented
was immediately cancelled. In Hungary,        parliamentary election in 2004 that, in        in Figure 3. The table below sets out how
a regional authority imposed a fine on         addition to a commitment to democracy,         our US$12.9 million was allocated.
Dreher because external signage was           had demonstrated voter support by
placed in proximity to a pharmacy.            receiving at least 1% of the total votes       Education                                18%
In South Africa, one complaint was made       in the 1999 parliamentary election.            Welfare                                  21%
to the Advertising Standards Authority        It is our belief that a strong democracy       Health                                    5%
about a Miller Genuine Draft poster ‘at       requires healthy political parties,            Environment                               8%
least the beer is pure’. The ASA ruled that   particularly in a newly established            Arts, culture and recreation             11%
the advert was sexist and disparaging to      democratic system like South Africa and,       Multiple impact projects                 37%
women, and SAB Ltd withdrew the print         accordingly, an amount of R5 million
advertisement at once.                        (US$700,000) has been distributed
     In addition to these complaints          across the six largest parties, pro-rata
upheld, Miller received 3,003 consumer        to their level of support in the 1999
complaints concerning its advertising in      parliamentary election.
the United States. The vast majority               During the year under review, Miller
related to a single Miller Lite commercial,   Brewing Company made contributions to
‘Catfight’. However, Miller believes the       the campaigns and office running costs of
advert was fully in accordance with           individual elected officials who indicated
agreed industry and marketing advertising     their support for the beer industry in
codes and standards, and did not              states that permit such donations. The
withdraw it.                                  majority of donations were for US$1,000
     This year we have included an            or less, amounting in aggregate to
assessment of the extent to which group       US$700,000.
companies have formal policies in place            The group’s operations in Central
to ensure the privacy of consumer             America made donations of US$400,000
data. In the majority of instances, our       in the context of municipal and presidential
companies do not have direct relations        elections that were held in the final quarter
with final consumers, as their products        of the year ending 31 March 2004.
are sold by a range of intermediaries.             As part of the accountability review,
However, in the more developed                SABMiller companies report on
markets, such as in South Africa, signed      prosecutions or fines resulting from non-
confidentiality agreements are in place for    compliance or breaches of legislation,
consumer research services with external      together with any formal investigations
agencies and SAB Ltd adheres to the           or major disputes with governments
Southern African Marketing Research           or regulators. Excluding discussions
Association’s code of conduct.                and disputes over tax and excise
                                              computations, the following incidences
Open relations with governments               were reported for the year under review.
Our guiding principles commit us                   In the Czech Republic, the
to constructive engagement with               Competition Board levied a fine of
governments and their regulatory              CZK2.3 million (US$84,000) and required
agencies, based on open and arm’s-            that exclusivity and minimum volume
length relationships. State authorities       provisions with pubs be altered.
benefit very considerably from the wealth            ˘ y
                                              Plzensk´ Prazdroj is contesting the
the business creates, by more than            order in the Regional Administrative
US$3,000 million in the year under            Court. In Russia, investigations by
review as a result of direct and excise       authorities on currency related issues
tax. (See Graphs 11 and 12.)                  found minor administrative errors and
    Given their power to tax and regulate     a US$5,000 fine was levied.
our operations, it is important we are
active in protecting our legitimate
business interests. This we do openly
and transparently, without intervening in
partisan politics. Whilst it remains the
group’s policy that political donations
36 SABMiller plc

                                                                                                                             Figure 2

                                                                                                                               Management approach to key
                                                                                                                               human resource issues
Graph 2                                                            Graph 3                                                                                    2003   2004

Employees by division                                              Employees by grade                                          Labour turnover                B+     A–
(Total employees 39,358)                                                                                                       Training and development       C+     B–
                                                                                                                               Performance appraisal and
                                                                                                                                   career management          C+     B
                                                                                                                               Diversity                      C+     B
                                     SABMiller Africa 18%                                          Executives 3%               Primary healthcare             B      B+
                                     SABMiller Europe 26%                                          Managers 12%                Health and safety              B–     B+
                                     Miller Brewing Co. 15%                                        Supervisory/skilled 39%     AIDS                           B–     B+
                                     Central America 19%                                           Non-supervisory 46%         Internal communication         B–     B+
                                     Other Beverage Interests 9%
                                                                                                                               Negotiation and consultation   B+     B+
                                     SAB Ltd 13%
                                                                                                                               Staff attitude surveys         C      B–
                                                                                                                               Market related salaries        B      B+
                                                                                                                               Retirement benefits             B+     B

                                                                                                                               For more details on health issues see
                                                                                                                               Graph 5 and example below.

Graph 4                                                                                                                        Management approach grading
                                                                                                                               example: Health and safety
Training days per employee 2004
                                                                                                                               A. Advanced
                                                                                                                               A recognised health and safety
                                                                                                                               system exists. Safety committees are
                                                                                                                               constituted at each site. Effective record
       6.0                                                                                                                     keeping for all safety issues is in place.
       5.0                                                                                                                     Internal audits are conducted regularly,
       4.0                                                                                                                     and external audits are conducted
       3.0                                                                                                                     annually, with good results. A health
       2.0                                                                                                                     and safety training and communication
                                                                                    Miller Brewing Company                     programme is in place, which includes
       1.0                                                                        currently assesses training
                                                                                   levels on a different base.                 the use of visual management.
             SABMiller   SABMiller   SABMiller   Central     Other     SAB Ltd
              group       Africa      Europe     America   Beverage                                                            B. Developed
                                                                                                                               A recognised health and safety
                                                                                                                               system exists. Safety committees are
                                                                                                                               constituted at each site. Effective record
                                                                                                                               keeping for all safety issues is in place.
                                                                                                                               Audits as to safety standards are
                                                                                                                               conducted annually. Health and safety
Graph 5                                                                                                                        training is provided to staff.
Assessment of management approach: Health issues
                                                                                                                               C. Established
                                                                                                                               A health and safety system exists.
                                                                                                                               Safety committees are constituted at
                                                                                                                               each site. Effective record keeping for all
                                                                                                                               safety issues is in place. Internal audits
   B                                                                                                                           occur from time to time. Basic safety
                                                                                                                               training occurs where needed.
                                                              Performance level 2003
   D                                                          Target for 2004                                                  D. Emerging
                                                              Performance level 2004                                           Health and safety is dealt with in an
                                                              Target for 2005                                                  ad hoc manner, as is record keeping.
                                                                                                                               Safety committees are constituted.
                Primary          Health           AIDS                                                                         Basic safety training occurs
               healthcare      and safety
                                                                                                                               where needed.
                                                                                                                                                                                SABMiller plc 37

                                                                                                                                                Figure 3

                                                                                                                                                  SABMiller Corporate Social
                                                                                                                                                  Investment Policy

                                                                                                                                                  SABMiller embraces its obligations of
                                                                                                                                                  corporate citizenship towards, among
                                                                                                                                                  other stakeholders, the communities
                                                                                                                                                  in which it operates. Accordingly,
                                                                                                                                                  SABMiller group companies will seek to
                                                                                                                                                  contribute meaningfully to the economic,
                                                                                                                                                  environment and social well-being of
                                                                                                                                                  these communities, while aiming
                                                                                                                                                  concurrently to build and sustain its
Graph 6                                                                                                                                           corporate reputation and conditions
Disabling incident frequency rate 2004                                                                                                            conducive to profitable business.
                                                                                                                                                      In line with its values and guiding
                                                                                                                                                  principles – particularly those relating
                4.0                                                                                                                               to community involvement and
                3.5                                                                                                                               consultation – in order to further this
                3.0                                                                                                                               policy, SABMiller will:
                2.0                                                                                                                               •   Concentrate its efforts in local
                1.5                                                                                                                                   operations, in response to
                1.0                                                                                                                                   local stakeholder needs and
                0.5                                                                                                                                   circumstances but undertake limited,
                                                                                                                                                      strategic investments at both
                      SABMiller        SABMiller    SABMiller      Miller    Central       Other       SAB Ltd                                        regional and group levels;
                       group            Africa       Europe      Brewing     America     Beverage
                                                                 Company                 Interests
                                                                                                                                                  •   Aim to be as professional in
                                                                                                                                                      managing its impact on society and
                                                                                                                                                      community relations as it is in all its
                                                                                                                                                      commercial activities and take into
                                                                                                                                                      account the wider context in which
Graph 7                                                                                                                                               the business operates in its decisions;
                                                                                                                                                  •   Develop at all levels, appropriate and
Women in management
                                                                                                                                                      transparent CSI policies and criteria
                                                                                                                                                      for investment, which inform and
                  35                                                                                                                                  guide both the donors and the
                                                                                                                                                  •   Develop a range of responses from

                                                                                                                                                      philanthropic giving, to social
                  20                                                                                                                                  investment and commercially-led
                  15                                                                                                                                  initiatives with direct community
                  10                                                                                                                                  benefits, with a selected number of
                                                                                                                                                      community partners with whom it
                      5                                                                                             2003
                                                                                                                                                      shares common goals – through
                          SABMiller     SABMiller    SABMiller      Miller    Central        Other      SAB Ltd
                                                                                                                                                      donations of cash, product,
                           group         Africa       Europe      Brewing     America      Beverage                                                   equipment or use of company
                                                                  Company                  Interests                                                  premises or the services of
                                                                                                                                                      employees provided by the company;
                                                                                                                                                  •   Become involved in programmes in
                                                                                                                                                      a responsible and innovative way,
                                                                                                                                                      based on the principles of mutual
Graph 8                                                                                                                                               advantage and benefit to the
Asian, black and coloured representation in South Africa                                                                                              company and the community;
                                                                                                                                                  •   Enter community partnerships on the
                                                                                                                                                      understanding that while proactive
                                                                                                                                                      initiatives have merit they must first
                 80                                                                                                                                   and foremost be acceptable to the
                 70                                                                                                                                   beneficiaries and, as such, an
                                                                                                                                                      ‘interactive’ rather than ‘proactive’

                 50                                                                                                  Data for 2003 has been           approach is the one of choice; and
                 40                                                                                        restated as Southern Sun Hotels        •   Commit to measuring the
                 30                                                                                           and Gaming group which was
                                                                                                                                                      effectiveness/impact of community
                                                                                                                included in previous reports
                 10                                                                                    2003             is no longer included         partnerships through individual
                                                                                                       2004           in the reporting scope.         project evaluation measured against
                          All grades      Executives    Management Supervisory            Non-                                                        project goals and objectives and act
                                                                   and skilled         supervisory
                                                                                                                                                      on the results.
38 SABMiller plc


Graph 9
Trade union membership


                  10                                                                                                     2003
                        SABMiller      SABMiller      SABMiller      Miller       Central        Other        SAB Ltd
                         group          Africa         Europe       Brewing       America*     Beverage
                                                                   Company*                    Interests
   *Data for Miller Brewing Company and Central America is available for 2003 and 2004 only.

Graph 10
Staff with service of five years or more


                   10                                                                                      2003
                        SABMiller   SABMiller   SABMiller     Miller   Central      Other     SAB Ltd
                         group       Africa      Europe     Brewing    America    Beverage
                                                            Company               Interests

Graph 11                                                                      Graph 12
Taxes paid by division                                                        Total taxes paid by type

                                                SABMiller Africa 9%                                           Excise/duty 47%
                                                SABMiller Europe 27%                                          Sales/turnover 33%
                                                Miller Brewing Co. 33%                                        Import/customs 2%
                                                Central America 1%                                            Company income 6%
                                                Other Beverage Interests 7%                                   Employees 3%
                                                SAB Ltd 23%                                                   Purchase 8%
                                                                                                              Other 1%
                                                                                                                              SABMiller plc 39


SABMiller’s core business as a beverage producer has relatively low
immediate environmental impacts. Our commitment is to minimise these
where possible and to work with others towards long-term sustainability,
recognising the need to maintain the supply and quality of natural ingredients –
barley, hops, sugar, fruits and, above all, water – that go to make up our beer
and soft drinks.

                                                   This year we have continued to expand the      In total, fines worth US$42,123
Impacts at a glance                                group-wide environmental management            (2003: US$109,484) were levied
•   More efficient use of water in all divisions.   system, based on the principles underlying     by public authorities, arising from
•   Improved performance on effluents.              the ISO 14001 standard. We have                four incidents:
•   Reduced emissions of carbon dioxide.           expanded the number of reported                    At Alrode Brewery in South Africa,
•   Improved efficiency in electricity.             indicators and improved the accuracy           suspended solids in effluent rose above
•   Eco-efficiency of soft drinks operations        of others. The number of local operations      municipal limits (US$24,600 fine). Initial
    increased on most measures.                    with environmental management systems          attempts at effluent purification having
•   Twelve more operations with ISO                has risen to 31 comprising 55 sites            proved unsuccessful, approval was
    accreditation or EMAS equivalent.              with formal, independent, externally           granted to build a new effluent treatment
                                                   certified systems.                              plant during the current year.
                                                       We have again entered the UK’s                 In Swaziland, effluent exceeded the
                                                   Business in the Environment Index, for         permitted standard, resulting in a fine
                                                   the fourth year running, as this offers a      of US$339. A new effluent balancing
                                                   benchmark of our progress against more         tank is now being built to reduce loads
                                                   than 150 other leading companies. Our          on the municipal treatment plant, and
                                                   score increased seven points to 62.75%,        minimisation techniques applied in
                                                   with notable results in leadership, policy     the meantime.
                                                   and assurance. However, our overall                In Hungary, discharged waste water
                                                   ranking in the Index fell slightly, as other   also exceeded the legal limits (US$13,197
                                                   companies improved more strongly. We           fine). The feasibility of a biological
                                                   continue to lag our sector peers, notably      treatment plant is being reviewed and
                                                   on setting objectives and targets and on       meanwhile action is being taken including
                                                   supply chain engagement.                       a yeast collection system and a centrifuge
                                                                                                  at fermentation stage.
                                                   Compliance                                         In Romania, waste water composition
                                                   All group companies are required to            also exceeded limits (US$3,987 fine).
                                                   report incidences of non-compliance            Plans to deal with effluent treatment
                                                   with local legal standards, together with      over the next three years in Romania
                                                   the remedial action they are taking.           are in place.
40 SABMiller plc

Environment                                   Energy, including electricity
                                              Our two main energy sources are
                                              electricity, either purchased from national
                                                                                            fossil fuel combustion and we use the
                                                                                            World Resources Institute/World Business
                                                                                            Council for Sustainable Development

review                                        grids or generated on site, and thermal
                                              energy mainly for boilers. This year we are
                                              able to publish data on thermal energy
                                                                                            Greenhouse Gas Protocol (GHG) to
                                                                                            calculate our emissions.
                                                                                                 CO2 emissions from clear beer
                                              consumption for individual divisions, as      operations totalled 1.78 million tonnes,
                                              accuracy and availability has improved,       slightly down on 2003, both directly from
                                              notably calorific heating values for fuels     our own combustion of fossil fuels and also
                                              in some of the developing countries.          indirectly from the generation of bought-in
                                              Average thermal energy consumption            electricity. The efficiency ratio for clear
Environmental impacts                         for clear beer is 142 mega joules of          beer production also improved, to
In the year under review we made              energy per hectolitre of production.          15.51 kg/hl from 16.34 kg/hl the year
continued progress in reducing our main       (See Graph 15.)                               before. These reductions result from
environmental impacts, as measured                We continue to report efficiency ratios    improved energy efficiency and better
through efficiency ratios comparing            for electricity and we have good trend        reporting. We are now able to exclude
impacts with production levels. Our overall   data. The average across clear beer           hydroelectricity (carbon neutral) and are
performance falls within international good   operations improved slightly to               using the new version of the GHG Protocol
practice levels according to such external    10.14 kWh/hl, compared to 10.33 kWh/hl        with accurate emissions factors for more
benchmarks as are available. Here we          the previous year. Overall, we remain         countries. (See Graph 18.)
report on the main inputs to the brewing      within norms for good international                Carbon dioxide is also used in, and
process, especially water, on energy          practice which are considered to be           produced by, the brewing process itself,
consumption and greenhouse gas                between eight and 12 kWh/hl, according        for example, as sugars are converted to
emissions and on waste outputs. We            to a UNEP study. (See Graph 16.)              alcohol and CO2 during fermentation.
also report the headline environmental                                                      This is on a much smaller scale than fossil
indicators for sorghum beer and soft          Effluent                                       fuel releases and is largely greenhouse
drinks which have smaller production          The brewing process produces significant       gas neutral as carbon dioxide is extracted
volumes than clear beer. A summary of         volumes of liquid effluents, typically         from the atmosphere as barley and other
our environmental footprint can be found      containing high COD and BOD (chemical         natural inputs grow. Many of our
in Table 5.                                   oxygen demand and biological oxygen           breweries have gas recovery systems
    To ensure comparability and to            demand). If released untreated, the high      to capture, purify and reuse the gas, and
improve accuracy of trend data, some          organic content would threaten the            this saves purchasing gas needed for
previous year figures have been                ecology of the receiving water body, so       carbonation and tank pressure control.
recalculated on a like-for-like basis with    effluent is either treated on site, where      In the year under review, we bought in
updated and corrected information,            practical, or safely discharged, mainly       30,000 tonnes of CO2, less than in the
principally relating to North America.        to third parties for treatment such as        previous year, and sold surplus stocks
                                              municipal sewerage systems. The               amounting to 7,800 tonnes.
Inputs, including water                       average COD of effluent discharged by               For the second year running, we have
Our largest single input to the production    our clear beer operations was 1,866 mg/l,     calculated our emissions of nitrogen oxide
process is water. Total water use in clear    an improvement on the previous period         (NOx) and methane (CH4). Efficiency ratios
beer was 550 million hectolitres, a 3.7%      (2,019 mg/l). This falls within the           are largely unchanged, at 0.03 kg/hl for
increase on 2003. Two-thirds is sourced       characteristic range for brewery effluent      NOx and 0.45 kg/hl for CH4.
from municipal or town water supplies.        identified by the World Bank of between
(See Graph 13.) The key performance           1,800 and 3,000 mg/l.                         Waste and refrigeration
indicator (KPI) for the brewing industry is       The overall average ratio for effluent     Solid waste generated during the brewing
the water to beer ratio – that is the total   produced across all clear beer operations     process is primarily organic, consisting
amount of water required for all purposes     improved to 3.16 hl/hl, from 3.27 hl/hl in    mainly of spent grains and yeast cells
including ancillary functions to produce      2003. This indicates improved production      from fermentation which is generally
one unit of beer. UNEP has found that         processes due to advanced reclamation         sold to farmers as livestock feed. In total,
figures of between five and six hectolitres     systems in modern breweries. All divisions    our clear beer operations generated
of water per hectolitre of clear beer         improved their performance, with the          1.8 million tonnes, 88% of which is
represent good international practice.        exception of Central America. UNEP            recycled. (See Graphs 19 and 20.)
    Our average ratio for water use           estimates show standard international              Small volumes of hazardous
across all clear beer operations was          practice for clear beer effluent is around     waste are also generated, and this
4.79 hl/hl, slightly down on the previous     3.5 hl/hl. (See Graph 17.)                    is disposed correctly at government
period (4.92 hl/hl). All divisions reported                                                 approved sites. Clear beer operations
improved performance. (See Graph 14.)         Greenhouse gas emissions                      generated 234 tonnes of solid hazardous
    This year we are reporting for the first   Carbon dioxide (CO2) is the most prevalent    waste and 1,079 litres of hazardous
time the volumes of the other major           of the group of six gases identified as        liquid waste.
inputs. (See Table 6.)                        contributing to global warming. Within our         The preservation of beer at the correct
                                              operations, the main contributor is from      temperature is a key part of the brewing
                                                                                               SABMiller plc 41

process. Some cooling equipment                  such as precision application of
poses an environment threat if refrigerants      fertilisers and minimum tillage.
used are considered ozone depleting.                  Going forward, we continue to
All SABMiller operations are required to         keep under review what actions our
assess and report their activity in this area.   production sites can take to maintain and
None use CFCs (chlorofluorocarbons)               enhance biodiversity, in discussion with
or HCFCs (hydrochlorofluorocarbons).              stakeholders.
The majority use ammonia as a primary
refrigerant and for the second year we           Genetic technology
have reported ammonia evaporative                During the year, we have conducted
losses, totalling 145 tonnes, up from            an initial review of the extent to which
102 tonnes the previous year.                    genetically modified organisms (GMOs)
                                                 may be included in our bought-in supplies.
Sorghum                                          Our initial assessment is that few, if any,
Our sorghum beer operations are small            GMOs are currently used, but better
compared to clear beer, accounting for           systems need to be put in place,
less than 2% of production volumes.              principally at our suppliers, before we
For completeness, again this year we             can present an accurate picture.
are reporting headline environmental                  SABMiller accepts the need to remain
performance and have data for the first           abreast of technological developments
time on effluents. Sorghum beer is made           in order to retain access to the most
from maize, not barley. Fermentation is          advanced information possible, and
shorter than clear beer and the product          the company supports research in
has a shelf-life of four to six days. The        biotechnology to increase the knowledge
brewing process is simpler and has lower         base within this discipline.
demands for energy and water, although                As a global company, SABMiller
the COD content of effluent is higher.            will keep the issues around the use of
(See Graph 21.)                                  genetically modified raw materials under
                                                 constant review with all due recognition
Soft drinks                                      of consumer perceptions and concerns.
Soft drink production volumes are about
a quarter the size of clear beer, consisting
mainly of fruit juices, flavoured waters
and carbonated beverages such as
Coca-Cola. Production processes are
less resource intensive. Less heat is
required, for example, resulting in lower
CO2 emissions. Performance in the year
under review showed improving ratios on
the headline indicators except for CO2
efficiency. (See Graph 22.)

After an initial review in 2003, our findings
suggest that only one of our current
operations is situated in an area of
international environmental importance,
namely Newlands Brewery, which
falls within the Cape Floristic region
of South Africa.
     In 2003’s report, we presented data
for the first time on our limited agricultural
holdings. This year, the holdings are
considerably reduced, rendering
performance data uncomparable. Even
though they provide only a very small
proportion of our production inputs, they
do allow us to understand the biodiversity
and other impacts associated with
agricultural supplies. We can also
test the feasibility of new techniques
42 SABMiller plc


To ensure comparability and to improve                   Table 5
accuracy of trend data, some previous                    Group-wide absolute environmental indicators
                                                                                                                                                          Absolute value
year figures have been recalculated on a                  Environmental indicator                                                                                    2004
like-for-like basis with updated and
                                                         Water                                                                                        606 million hls
corrected information, principally relating              Electricity                                                                               1,262 million kWh
to Miller Brewing Company.                               Energy                                                                                     16,549 million Mj
     Data for Miller Brewing Company and                 Effluent                                                                                      399 million hls
Central America is available for 2003 and                Ammonia                                                                                         145 tonnes
2004 only.                                               CO2                                                                                       2.0 million tonnes
                                                         CH4                                                                                          59,000 tonnes
                                                         NOx                                                                                           4,000 tonnes
                                                         Total waste (non-hazardous)                                                               2.2 million tonnes
                                                         Waste recycled (non-hazardous)                                                            1.8 million tonnes
                                                         Solid waste (hazardous)                                                                         234 tonnes
                                                         Liquid waste (hazardous)                                                                         3,688 litres

Graph 13                                                 Graph 14
Water sources (clear beer)                               Water consumption (clear beer)

                80                                                  12

                50                                                   8

                40                        Municipal/                 6
                                          water                      4                                                                            2001
                20                        Ground/                                                                                                 2002
                10                        surface                                                                                                 2003
                                          water                                                                                                   2004
                     2002   2003   2004                                   All clear   SAB Ltd     SABMiller      SABMiller     Miller   Central
                                                                           beer                    Africa         Europe     Brewing    America
                                                                         operations                                          Company

Table 6
Materials used

Raw materials by type and                                Packaging use by type and
amount used (clear beer)                                 amount used (clear beer)
Raw materials                             Tonnes 000’s   Packaging                              Units used (millions)

Malt                                          1,114      Returnable bottles                                   6,868
Hops                                             11      Non-returnable bottles                               5,628
Adjuncts                                        505      Cans                                                 9,997
Sorghum                                           2      Kegs                                                 1,030
Sugar                                         2,271
                                                                                                                                                                       SABMiller plc 43

Graph 15                                Graph 16
Thermal energy consumption (clear beer) Electricity consumption (clear beer)

              300                                                                  16
              250                                                                  14

              150                                                                   8

              100                                                                   6
                                                                                    4                                                                           2002
                                                                                    2                                                                           2003
                           SAB         SABMiller       Central                           All clear   SAB Ltd      SABMiller   SABMiller      Miller   Central
                 All clear Ltd          Europe Miller America                              beer                    Africa      Europe      Brewing    America
                   beer        SABMiller       Brewing                                  operations                                         Company
                operations      Africa        Company

Graph 17
Effluent produced (clear beer)




                2                                                                                          2002
                     All clear   SAB Ltd      SABMiller     SABMiller              Miller        Central
                       beer                    Africa        Europe              Brewing         America
                    operations                                                   Company

Graph 18
CO2 emissions (clear beer)
                                                                                                                                     Graph 19
               30                                                                                                                    Waste by type (clear beer)


               15                                                                                                                                               Spent grains 79%
               10                                                                                                                                               Yeast 10%
                                                                                                                                                                Cullet 3%
                5                                                                                          2003
                                                                                                                                                                Boiler ash 2%
                                                                                                                                                                Kieselguhr 1%
                                                                                                                                                                Other 5%
                     All clear   SAB Ltd      SABMiller     SABMiller              Miller       Central
                       beer                    Africa        Europe              Brewing        America
                    operations                                                   Company
44 SABMiller plc


Graph 20                                                       Graph 21                                                 Graph 22
Waste disposal (clear beer)                                    Sorghum beer –                                           Soft drinks –
                                                               key environmental indicators                             key environmental indicators

           24                                    To landfill      16                                                        8
           21                                    Recycled         14                                                        7
           18                                                     12                                                        6
           15                                                     10                                                        5

           12                                                      8                                                        4
            9                                                      6                                                        3
            6                                                      4                                                        2
            3                                                      2                                             2003       1                                             2003
                                                                                                                 2004                                                     2004
            All clear     SABMiller          Miller Central           Water                 Effluent    CO2                    Water                 Effluent    CO2
              beer    SAB Africa SABMiller Brewing America         consumption Electricity produced    (kg/hl)              consumption Electricity produced    (kg/hl)
           operations Ltd           Europe Company                    (hl/hl) consumption (hl/hl)                              (hl/hl) consumption (hl/hl)
                                                                                (kWh/hl)                                                 (kWh/hl)

   Environmental policy

   SABMiller believes that as responsible members of the community we have an obligation to manage the environmental impacts of our
   activities while pursuing our business aims. We are committed to maintaining an environment that meets the needs of current and
   future generations.
        Accordingly, we endeavour judiciously to limit the impacts of our products, services and activities on the environment by meeting the
   following objectives:
   • Complying with safety, health, and environmental legislation applicable to our operations in each geographical location;
   • Identifying and monitoring of our significant environmental impacts to establish compliance and the need for corrective action;
   • Conducting environmental impact assessments when establishing new facilities or changing existing facilities;
   • Aligning our risk management and control practices to take account of local conditions, while setting minimum standards and achieving
        continual environmental performance improvement;
   • Adopting the most cost-efficient technologies which at the same time minimise our impact on the environment;
   • Enhancing environmental awareness among employees through training, development and education;
   • Making optimal use of resources, that are part of the process or product that may impact on the environment, by promoting the reuse
        and recycling of materials and goods;
   • Reducing waste and disposing of all remaining waste in a responsible manner;
   • Committing ourselves to developing environmental management systems for all our owned operations in line with ISO 14001 principles
        and ultimately having these operations accredited by an internationally recognised certification authority;
   • Maintaining transparent relations with stakeholders regarding environmental management and our performance;
   • Encouraging suppliers and contractors who provide us with services to follow recognised environmental management principles; and
   • Supporting selected organisations that promote biodiversity and environmental awareness and conservation.

   Adopted April 2002
   Applicable to all SABMiller owned and managed operations.
                                                                                                                                SABMiller plc 45

Assurance statement

The Corporate Citizenship Company              years, from its leading position in             be achieved, given that the impacts
acts as specialist advisers to international   Southern Africa to become one of the top        mostly fall outside the direct operations.
corporations that seek to improve their        global brewers. Headline sales grew from             The final area concerns group
economic, social and environmental             US$9,000 million to US$12,600 million,          companies where SABMiller only has
performance as good corporate citizens.        creating cash value added available for         a minority holding and can exercise
We have worked with SABMiller since            distribution to stakeholders, up more           some influence, not operational control.
1999, helping to devise its accountability     than 40%.                                       These have been included within the
framework and to manage and report its              With this growth has come the need         scope of corporate accountability,
key impacts.                                   to strengthen its approach to managing          subject to transitional periods for new
    We have checked and are satisfied           corporate accountability. A cross-section       acquisitions, even though there are real
that the contents of this report are           of international stakeholders was               limitations on what can be achieved.
consistent with underlying records, mainly     consulted about their perceptions and           Looking forward, greater clarity about
data provided by operating companies           external engagement at international level      these limitations and about where
or obtained from audited financial              is being expanded. Corporate policies on        responsibility ultimately lies will, I believe,
statements. We have assessed the               alcohol marketing and political donations       enhance overall accountability.
correctness of data trends and received        among others were reviewed. A new
satisfactory explanations where                steering group is being formed to
appropriate. We have not verified               integrate the business divisions more
otherwise unaudited data.                      effectively in deciding on, and delivering
    In our opinion the report provides         corporate accountability commitments.
a fair and balanced representation                  I believe the report presented here
of progress being made in applying             demonstrates that progress continues
SABMiller’s accountability systems             to be made in living out SABMiller’s
and in living out its mission, values          corporate values and business principles.
and guiding principles.                        The economic contribution of the
                                               business at country and local community
The Corporate Citizenship Company              level remains very strong. Overall eco-                efficiency has improved, with all divisions
London 7 June 2004                             continuing to make changes that reduce
                                               their environmental impacts. On social
External commentary                            aspects, reported performance has
This is SABMiller’s seventh annual             improved on most indicators.
accountability report and it marks a step           In some areas, progress was more
change in the company’s approach to            mixed. On human resource management,
external reporting. While the broad range      for example, some indicators held
of non-financial performance data               constant or fell back in the year under
continues to be presented and has been         review. In a decentralised business, these
expanded in some respects, the focus           reflect the aggregate performance of
has moved on to issues which are               individual operations. The need now is to
material to an understanding of the            focus on a smaller number of indicators
business and its impacts along the             that really matter, set targets and drive for
production and consumption chain.              results, reporting next year on the choices
These include natural resource inputs,         made and outcomes achieved.
                                                                                               Michael Tuffrey
notably water, HIV/AIDS as a critical               Externally, some progress was made
                                                                                               Michael Tuffrey co-founded The Corporate
health concern for employees in the            on assessing impacts in the value chain,
                                                                                               Citizenship Company in 1997, having
African business divisions and                 as regards suppliers and on marketplace         previously worked with companies on their
responsibility in the marketing of its         issues such as distribution, transport          social responsibility practices for a decade.
alcohol beverages.                             and product packaging. Going forward,           A chartered accountant by profession,
    The company has grown rapidly in           I believe the priority here is to map the       he also edits the international journal,
size and geographic scope over recent          impacts and assess what practically can         Corporate Citizenship Briefing.
46 SABMiller plc

GRI Indicators
Vision and strategy                   Economic performance indicators
1.1        Page 1, 2, 4, 28           Customers
1.2        Page 2, 3                  EC1: Net sales                                                 Y     Page 31 & AR
Company profile                        EC2: Geographic breakdown of markets                           P     AR
2.1        Front cover                Suppliers
2.2        Page 6, 7                  EC3: Cost of materials purchased                               Y     Page 31
2.3        Page 6, 7                  EC4: Percentage of contracts paid by agreed terms              NAV   alternative indicator provided
2.4        Page 6, 7 & AR             Creditor days                                                  Y     AR
2.5        Page 6, 7                  Supplies sourced locally (in-country)                          Y     Page 29, 32
2.6        AR                         Employees
2.7        Page 6, 7                  EC5: Total payroll and benefits                                 Y     Page 6, 7, 31, 36 & AR
2.8        Page 6, 7, 31 & AR         Providers of Capital
2.9        Page 28 *                  EC6: Distributions to providers of capital                     Y     AR
2.10       Inside back cover          EC7: Change in retained earnings                               Y     Page 31 & AR
2.11       Page 2                     Analysis of shareholders by type & size                        Y     Page 31
2.12       Page 2                     Public Sector
2.13       Page 5, 27                 EC8: Total sum of taxes by country                             P     Page 31 & 38 (by division)
2.14       Page 5, 27, 31 & AR        EC9: Subsidies received                                        NAV   not significant
2.15       Page 5, 27                 EC10: Community donations                                      Y     Page 35
2.16       Page 5, 40                 Indirect economic impacts
2.17       NA                         EC13 Major external impacts of the company                     P     Page 19, 29
2.18       Page 31 *                  Employment multipliers                                         Y     Page 20, 32
2.19       Page 40                    Diversity in procurement                                       Y     Page 20, 21
2.20       Page 26, 27, 45            Environmental performance indicators
2.21       Page 26, 27                Materials
2.22       Inside back cover          EN1: Total materials use                                       Y     Page 42
Governance                            EN2: Percentage of waste materials used                        NAV   Under consideration
3.1        Page 26, 27                Energy
3.2        AR                         EN3: Direct energy use                                         Y     Page 43
3.3        AR                         EN4: Indirect energy use                                       Y     Page 43 (electricity use)
3.4        Page 26, 27 & AR           Water
3.5        AR                         EN5: Total water use                                           Y     Page 42
3.6        Page 26, 27 & AR           EN21: Ground and surface water                                 P     Page 42
3.7        Page 9, 11, 28, 37, 44 *   EN22: Recycling and reuse of water                             Y     Page 12
3.8        AR *                       Biodiversity
3.9        Page 23, 27                EN6: Biodiversity-rich habitats                                Y     Page 41
3.10       Page 11, 22, 23, 27 *      EN7: Impacts on biodiversity                                   P     Page 41 (agriculture only)
3.11       Page 11, 41 *              EN29: Business units operating in protected areas              Y     Page 41
3.12       Page 11, 20, 41, 45 *      Emissions, Effluents and Waste
3.13       Page 26, 27, 41 & AR       EN8: Greenhouse gas emissions                                  Y     Page   40, 42, 43
3.14       Page 27                    EN9: Ozone-depleting emissions                                 Y     Page   40
3.15       Page 27                    EN10: NOx, SOx and other emissions                             P     Page   42
3.16       Page 19, 21, 25, 28, 30    EN11: Total amount of waste                                    Y     Page   42, 44
3.17       Page 1, 9, 26, 27, 29 *    EN12: Significant discharges to water                           Y     Page   40
3.18       AR                         EN13: Significant spills                                        P     Page   39
3.19       Page 26, 27 *              EN31: Production, transport, etc. of hazardous waste           P     Page   42 (production waste)
3.20       Page 26, 27, 39 *          Purchase and sales of CO2                                      Y     Page   40
GRI content index                     Total effluent produced                                         Y     Page   40, 42
4.1        Page 46                    Products and Services
Key                                   EN14: Environmental impact of products                         NAV   Packaging under consideration
AR – in Annual Report 2004            EN15: Reclaimable product                                      NAV   Packaging under consideration
*– addressed where appropriate        Compliance
throughout report                     EN16: Incidents and fines                                       Y     Page 39
NA – not applicable                   Social performance indicators
NAV – not available                   Employment
Y – yes, indicator provided           LA1: Workforce breakdown                                       P     Page   6, 7 (by major region)
P – partial data only                 LA2: Employment creation and labour turnover                   P     Page   38 (length of service)
                                      LA12: Employee benefits beyond those legally mandated           P     Page   36 (management approach)
                                      Assessment of management approach to market related salaries   Y     Page   33, 36
                                      Assessment of management approach to retirement benefits        Y     Page   33, 36
                                      Assessment of management approach to primary healthcare        Y     Page   33, 36
For details on the Global             Assessment of management approach to labour turnover           Y     Page   33, 36
Reporting Initiative (GRI)            Assessment of management approach to performance appraisal     Y     Page   33, 36
see           Assessment of management approach to staff attitude surveys    Y     Page   33, 36
                                                                                                 SABMiller plc 47

Social performance indicators (continued)
Labour/Management Relations
LA3: Trade union representation                                     Y     Page   34, 38
LA4: Consultation policy/procedures                                 Y     Page   33, 36
Days lost due to industrial action                                  Y     Page   34
Assessment of management approach to negotiation and consultation   Y     Page   36
Employees involved in industrial tribunals                          Y     Page   34
Health and Safety
LA5: Occupational accidents/diseases                                Y     Page   33, 37
LA6: Joint Health & Safety committees                               Y     Page   33, 36
LA7: Injury lost days                                               P     Page   33
LA8: HIV/AIDS policy/programmes                                     Y     Page   15-18, 33, 36
Extent of company or state healthcare                               Y     Page   34
Assessment of management approach to internal communication         Y     Page   33, 36
Assessment of management approach to health and safety              Y     Page   33, 36
Assessment of management approach to performance on HIV/AIDS        Y     Page   33, 36
Training and Education
LA9: Training per employee                                          Y     Page 33, 36
Assessment of management approach to training and development       Y     Page 33, 36
Diversity and Opportunity
LA10: Equal opportunities                                           Y     Page   34
LA11: Senior management and corporate governance bodies             Y     Page   34, 37
Level of women in management                                        Y     Page   34, 37
Assessment of management approach to diversity and localisation     Y     Page   33, 36
– Human Rights
Strategy and Management
HR1: Human rights policies                                          Y     Page 34
HR2: Human rights and investment                                    NAV   under consideration
HR3: Human rights and suppliers                                     P     Page 30
HR4: Non-discrimination policy                                      Y     Page 28
Freedom of Association and Collective Bargaining
HR5: Freedom of association policy                                  Y     Page 28
Child Labour
HR6: Policy excluding child labour                                  Y     Page 34
Monitoring number of children employed                              Y     Page 34
Forced and Compulsory Labour
HR7: Policy preventing forced labour                                Y     Page 34
– Society
SO1: Policies to manage impacts on communities                      Y     Page 10, 12, 19, 22
SO4: Awards received for CSR performance                            Y     Page 21, 22
Bribery and Corruption
SO2: Policies to address bribery/corruption                         Y     Page 34
Political Contributions
SO3: Policies to address political contributions                    Y     Page 35
SO5: Amount paid to political parties/institutions                  Y     Page 35
Competition and pricing
SO6: Anti-trust and monopoly                                        Y     Page 35
SO7: Preventing anti-competitive behaviour                          Y     Page 28
– Product Responsibility, Customer Health and Safety
Customer health and safety
PR1: Policy on customer health                                      Y     Page 28
Responsible drinking                                                Y     Page 8-11, 30, 34
Products and Services
PR2: Policy on product information                                  Y     Page 28
PR9: Advertising codes                                              Y     Page 8-11, 30, 34
PR10: Number and types of breaches of advertising regulations       Y     Page 9, 30, 34
Respect for Privacy
PR3: Policy on consumer privacy                                     Y     Page 35
48 SABMiller plc

SABMiller plc                Corporate Accountability
(Registration No. 3528416)
                             Telephone +44 20 7659 0100
Company Secretary
AOC Tonkinson                Investor Relations
Registered Office             Telephone +44 20 7659 0100
Dukes Court, Duke Street,
Woking, Surrey, England      This Corporate Accountability Report is
GU21 5BH                     published as a companion document to
Telefax +44 1483 264103      the SABMiller plc Annual Report 2004.
Telephone +44 1483 264000    Both are also available on the corporate
Head Office
One Stanhope Gate,           Internet Address
London, England    
Telefax +44 20 7659 0111
Telephone +44 20 7659 0100
The paper used in this report is produced in mills with
ISO 14001 accreditation using elemental chlorine-free pulps
made from wood harvested in fully sustainable forests.

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