Posted February 2012
Czech Republic - Budweiser: more shady
machinations and speculations
Reporting season may be upon us, but who can
really work up an interest in Big Beer's profits going up or
down while colourful Czech politicians are busy writing yet
another cliff-hanger in the never-ending Budweiser saga?
In mid-February 2012 it transpired that the
Czech Ministry of Agriculture has launched an audit of Budweiser
Budvar's books. Allegedly, this audit is meant to unseat the
brewer's long-serving CEO Jiří Boček.
As Budweiser Budvar is a state-owned brewery,
an independent audit of its books seems like the most normal
thing in the world. Not to some Czech politicians and Budweiser
Budvar's executive suite, though. Czech media commentators say
that protests are practically inevitable should Budweiser
Budvar's books be checked. As the argument runs, control of
financial management at Budvar is a covert manoeuvre to clear
the way for the American rivals.
Crikey. That's a new one to me. Who would
have thought that anybody in his or her right mind would oppose
transparency and accountability, especially if the company in
question is ultimately owned by the Czech people?
Czech Republic - StarBev on the block?
While Budweiser Budvar's CEO and the Czech
Minister for Agriculture continue with their public slugfest,
several parties, including brewers Heineken, AB-InBev,
Carlsberg, SABMiller, Molson Coors, Asahi as well as
private-equity outfits, are rumoured to be interested in taking
over the central European brewer StarBev, also headquartered in
the Czech Republic. The Wall Street Journal broke the news on 22
Many think AB-InBev is the most probable
buyer of StarBev, as the company has the right of first offer,
has many links to StarBev through several licences and has
sufficient capital to pay the estimated USD 3 billion that is
allegedly required for StarBev.
StarBev is a 13 million hl brewer (2010) with
interests in Bosnia-Herzegovina, Bulgaria, Hungary, Croatia,
Montenegro, Romania, Serbia, Slovakia and Czech Republic. The
company is led by the Belgian CEO Alain Beyens. The marketing
director is another Belgian, Frederic Landtmeters.
Both had long careers at AB-InBev. Alain
Beyens was the head of Eastern and Western Europe. He left the
brewer in 2009 because he wanted to be CEO himself. Mr Beyens is
also an independent director at the Belgian brewer Duvel
But there are other links between StarBev and
AB-InBev. StarBev is the former central European division of AB-InBev,
which was sold to CVC private equity in 2009 to help AB-InBev
reduce its debt following the acquisition of U.S. market leader
Anheuser-Busch in 2008.
According to a press release announcing the
sale to CVC, AB-InBev's disposal totalled USD 2.2 billion, plus
"additional rights for a further payment of up to USD 800
million." That adds up to USD 3 billion - or the rumoured asking
price for StarBev by CVC.
The Belgian publication Trends rightly
wondered: "Could it be that CVC Capital Partners will book no
profit on the sale after almost three years?"
While a re-sale to AB-InBev would seem
logical - StarBev brews and sells several AB-InBev brands
including Stella Artois, Beck's, Hoegaarden and Leffe in the
countries where it operates; in turn, AB-InBev brews the Czech
StarBev brand Staropramen in countries where StarBev is not
active - I still harbour several reservation.
My major objection is that the central
European market is not that interesting anymore for AB-InBev as
the brewer is focusing on high-profit markets in the Americas
In the year before the sale (2008)
to CVC, AB-InBev's profit contribution from central and eastern
Europe, which included Russia and the Ukraine, was only 7
percent of total EBITDA. Central Europe's profit contribution
was much less - 3 percent - if Nomura's estimate of USD 180
million in EBITDA in 2008 is correct. These days it would be
Since then, most central and eastern
European markets have been in decline and margins are under
pressure given fierce price wars among Heineken, Carlsberg and
SABMiller. Heineken CEO Jean-François van Boxmeer elaborated on
these at Heineken's full year 2011 results presentation on 15
That's why I don't think that the usual
suspects - Heineken, Carlsberg and SABMiller - would be overtly
keen to splash out USD 3 billion for StarBev. They have all had
their share of problems in the region in recent years. Moreover,
all of them would run against serious competition hurdles.
Carlsberg is already strong in Bulgaria,
Croatia and Serbia. Heineken is a leading player in Bulgaria,
Hungary, Romania, Slovakia and the Czech Republic. SABMiller has
key positions in Hungary, Romania, Slovakia and the Czech
From what I have heard, though, several
interested parties have been circling StarBev for almost a year
now. This is probably the reason why CVC has been working with
bankers Nomura to assess a number of approaches. It is not clear
if CVC will chose to sell the business. By rule of thumb,
private equity likes to keep businesses for a period of three to
five years before exiting (ie selling them on).
In view of the above, I think it more likely
that another private equity firm might wish to take StarBev on
for the time being - say another three to five years. The
interesting thing is that some private equity firms may have
access to cheap money and StarBev may be generating way more
than the cost of financing such a deal. This could be an
incentive for CVC to sell now.
Admittedly, I don't know if AB-InBev also has
the right of first refusal, but given the fact that there is no
strategic buyer (ie another brewer) who would want to buy
StarBev, I don't think that AB-InBev will worry too much if
StarBev takes another "private equity holiday".
What does this all come down to? I think that
CVC may wish to look at opportunities where they can make their
expertise and financing power work harder than the declining
returns they are likely to see (and perhaps have seen already?)
on their investment in StarBev. So a game of musical chairs -
from one private equity firm to another - may be preferable to
sitting still as far as CVC is concerned.
These StarBev breweries and private equity
stories are increasingly about portfolio management and nothing
The love for the honest pint is a romantic
notion that probably died in 1964 ... or was it 1664 (perhaps a
not so subtle pun)?
Netherlands - Heineken announces more cost
cuts despite profit rise
"Russia is a very difficult market. ... I am
not so sure about the growth potential of the next year, which
might be minute or slightly decreasing", Heineken CEO
Jean-François van Boxmeer said on 15 February 2012, when
commenting on the brewer's 2011 full year figures. And true:
central and eastern Europe was the only market where Heineken
saw revenue growth of 5 percent yet profits drop 7.2 percent (EBIT).
Heineken's results lived up to what Mr van
Boxmeer had announced a year ago: they would boost top line
growth by increasing marketing spending, even if it meant
profits growing at a lesser rate. Read on
South Africa - SA Breweries steps up war of
In the battle over market shares South
African Breweries (SAB), a subsidiary of SABMiller, declared
itself the winner. On 14 February 2012, Norman Adamai, Managing
Director of SAB, said the brewer had recaptured the market it
lost when one of its biggest brands, Amstel, was taken by
competitor Brandhouse, the joint venture between Heineken,
Diageo and Namibia Breweries.
In a rare departure from corporate etiquette
never to comment on a competitor, Mr Adami told investors in
London that Brandhouse’s strategy of turning Amstel into a
mainstream brand had backfired and "undermined its historical
Denmark - Light at the end of the Russian
Brewers in Russia can expect another two
years of disruption as the beer market adjusts to recent sales
restrictions, Fitch Ratings agency reported in early February
2012. Wouldn't Carlsberg know? The world's number four brewer
has long been looking for a way to reverse the steady decline in
sales from its Russian market, which has been hit by a
combination of spiralling taxes designed to curb alcoholism and
In 2009 eastern Europe accounted for 57
percent or DKK 5.3 billion of Carlsberg's profits (EBIT). In
2011, it accounted for merely 42 percent while profits from
Russia stood at DKK 4.3 billion, Carlsberg said on 20 February
2012 when it released its 2011 full year results. Read on
Russia - Carlsberg to buy the rest of
Carlsberg on 20 February 2012 announced that
it will spend up to DKK 4.4 billion (USD 785 million) to buy the
rest of Baltika's shares which it does not own already to swing
its ailing Russian business back to growth. Currently, Carlsberg
holds an 85 percent stake in Russia’s Baltika brewery. Carlsberg
will then delist the company.
Denmark – Carlsberg plays the dating game
They have been saying this for
years. That they are seeking growth in Asia through acquisitions
to offset sluggish business in Europe. But repeating this
strategy over and over again does not make it any more real.
Where are the acquisitions that could get Carlsberg out of its
The brewer wants to boost investment in
China, Carlsberg CEO
Buhl Rasmussen said on 14 February 2012.
Several market observers think that Carlsberg
may go for China’s Kingway Brewery – in which Heineken sold its
21.4 percent stake In March 2011 for USD 170 million. AB-InBev,
Tsingtao, and China Resources Snow Brewery may also bid.
USA – MillerCoors sales and volume decline in
Not a good year but it probably could have
been worse. MillerCoors said on 16 February 2012 that net sales
dipped 0.3 percent to USD 7.55 billion for the 12 months to the
end of December 2011. Net profits fell 5.5 percent to USD 1.01
billion over 2010, even though the number two brewer in the U.S.
delivered the final tranche of USD 765 million in synergies
related to its formation as a joint-venture between SABMiller
and Molson Coors.
Fortunately, MillerCoors' craft and import
beer business, Tenth and Blake, reported double-digit rises in
volume sales in 2011. The former Coors’ brand Blue Moon Belgian
White is now the nation's largest craft brand. Peroni Nastro
Azzurro continues to deliver mid-single digit growth, primarily
through the on-premise channel, MillerCoors said.
USA – Beer volumes down but beer sales up
The Beer Institute on 13 February 2012
released new data that show retail beer sales rose more than 2
percent in 2011, highlighting beer’s continued strength within
the alcohol beverage sector. While U.S. beer production,
according to the Beer Institute, was down 2 percent, sales
revenue, in both the on-premise and off-premise sector, was USD
98 billion last year.
Market research company Nielsen said the
increase in sales revenue can be attributed to the high-end beer
business, aka consumers trading up. The sale of imports, crafts
and above-premium beers sold off-premises was up nearly 3
USA – Sierra Nevada finally found site for
a new brewery
The search is over: Sierra
Nevada Brewing Company from California announced that it has
chosen a site in the state of North Carolina for the future home
of a 360,000 hl East Coast brewery. Lured to North Carolina by a
USD 3.5 million tax break, Sierra Nevada will spend USD 100
million on a new production facility, as well as a proposed
restaurant and gift shop. Read on
Czech Republic - Budweiser Budvar plays
the political card in dispute with ministry- comment
In the recent spat with Petr Bendl, the
Minister of Agriculture, Budweiser Budvar's Jiří Boček may have
won a round - but not the fight. The long-time manager of
state-owned brewery Budějovický Budvar (Budweiser Budvar)
cleverly played the political card - Budweiser Budvar falling
into the hands of Anheuser-Busch if it were to be privatised -
to fend off criticism of his managerial style.
After weeks of public hostilities between Mr
Bendl and Mr Boček, following a supervisory board reshuffle at
Budweiser Budvar which had brought two of Minister Bendl's
confidents to the Budweiser table, the Czech Prime Minster Petr
Nečas was forced to intervene on 7 February 2012 and say that
the time was not right for Budweiser Budvar to be privatised.
That may be the case. Nevertheless, it has
also shown that Mr Boček's grandstanding as the sole defender of
Czech brewing culture against the overbearing Yankies (aka
Anheuser-Busch) is not above reproach in Czech political circles
It's quite difficult to make out what really
caused the acrimonious row between Minister Bendl and Mr Boček,
as Czech business media are far from unbiased bystanders.
According to one of the less salubrious papers, the Minister of
Agriculture is furious with Budweiser Budvar, which he accused
of being run like a "state within a state". Mr Bendl reportedly
said that Budweiser Budvar is a company with "a CZK 2 billion (EUR
80 million) budget, which has spent CZK 1 billion on marketing
over the past three years and more than CZK 2 billion on
investments without worrying about the law on public tenders.”
What can this mean? That profits
have not flowed into the national treasury, like those of other
state-controlled companies, and that measures have not been
taken that would have curbed profits' non-transparent transfer
and the influence of lobbyists?
Doubts over Budweiser Budvar's
profit-maximising capabilities seem to have been mounting in
recent years, especially when the leading government coalition
party, the centre-right Civic Democrats (ODS) took control of
the Ministry of Agriculture, which owns Budweiser Budvar.
Let's be frank: few managers in the brewing
industry have had it as good as Mr Boček, 54. He has been at the
helm of Budweiser Budvar for over 20 years, steering the brewer
through the troubled waters of the Czech Republic's transition
from a planned economy to a free-market economy. All the while
Czech industries were being privatised and taught the capitalist
mantra of profit maximisation, Budweiser Budvar remained
state-owned and was allowed to keep on fighting its trademark
battles with Anheuser-Busch.
For the past twenty years, time
appears to have stood still at Budweiser Budvar. At least when
it comes to management philosophy. It has been amusing to watch
the persistent appeal of Soviet tonnage ideology in Budweiser
Budvar's published results. Not exactly a paragon of
transparency, Budweiser Budvar has only released beer volume
data to the public - sales and EBITs were notably absent - as if
volumes are the major criteria to assess a company's business
The same routine was played to us at
the beginning of this year when Budweiser Budvar reported a 5.5
percent increase in beer sales for 2011 to a record 1.32 million
hl, while exports rose 7.8 percent to a record 650,000 hl.
Admittedly, total beer volumes and export
volumes have been going up during Mr Boček's reign, but so have
they at Pilsner Urquell, another Czech brewer, which was hardly
bigger than Budweiser Budvar when it was sold to South African
Breweries in 1999 for over USD 600 million. In 2011 Pilsner
Urquell exported almost 900,000 hl.
Although Budweiser Budvar has been very
economical with publishing its business figures, some data still
got out, which show that Budweiser Budvar in 2010 allegedly had
a turnover of CZK 1.9 billion (USD 100 million), a pre-tax
profit of CZK 220 million (USD 11.6 million) and a net profit of
USD 10 million on beer sales of 1.3 million hl. That's hardly
peanuts. However, Czech brewing industry comparisons show that
when it comes to EBITDA margins, Budweiser Budvar in 2009 was
significantly outperformed by Staropramen (StarBev) and Prazdroj
What is more, some Czech media sources claim
that Budweiser Budvar has been allowed to retain profits. When
asked by Brauwelt what the arrangement is with the government as
concerns its profits, Budweiser Budvar was not available for
Now if you were Minister Bendl and
did your sums: wouldn't you come to the conclusion that
Budweiser Budvar is basically a self-serving set-up, whose
profits don't bolster the Czech budget but some managers' egos
and their costly legal battles with Anheuser-Busch over the
To push further: what's really in it for the
Czech state that Budweiser Budvar is state-owned? I'd hazard the
extravagantly wild guess that privatising Budweiser Budvar,
either through a stock-market listing or a sale, would bring in
more money for the government than the Czech state has got in
dividends from Budweiser Budvar in years.
It's beyond me to say whether Budweiser
Budvar has been well-managed or badly managed or even mis-managed
as Minister Bendl has claimed.
One thing is certain: Budweiser
Budvar cannot go on acting like a damsel in distress each time
they are called upon to clean up their act. State-owned
companies above all have to serve their stakeholders: they need
to be squeaky clean and profitable. Otherwise they lose their
credibility and their licence to operate, national treasure or
United Kingdom - World beer market 2011
grew 2.7 percent
Growth in the world beer market picked up to
reach 2.7 percent in 2011, thanks to increased beer consumption
in emerging markets, industry research group Plato Logic
reported on 8 February 2012.
Plato Logic also forecasted that
beer consumption would grow 2.5 percent this year.
That's broadly in line with global
economic growth. On 18 January 2012 the World Bank said that
global growth is now projected at 2.5 percent in 2012 and 3.1
percent in 2013.
Using purchasing power parity weights, global
growth would be 3.4 percent and 4.0 percent for 2012 and 2013,
USA - Coca-Cola grows volumes and announces
Ah, the sheer power of a global brand. North
American brewers will be eating out their heart: while they
watch beer volumes decline, Coca-Cola, the world’s largest
soft-drink maker, reports volume increases and price hikes.
The company released fourth quarter 2011
results on 7 February 2012 which showed that demand was strong
for its flagship Coca-Cola soft drink in North America, with
volume sales gaining 1 percent even as the company raised retail
prices for carbonated beverages by 4 percent.
United Kingdom -
Diageo's net profits hit by changes in taxation
Drinks group Diageo has reported a rise in
half-year profits as demand for its global brands continues to
grow in emerging markets. Pre-tax profits were GBP 1.86 billion
(USD 2.95 billion) for the six months to 31 December 2011, up 15
percent on the same period a year earlier.
Still, Diageo reported a 20 percent drop in
net profit to GBP 953 million (USD 1.5 billion), because the
authorities had stripped it of the right to certain tax
deductions in future years.
USA - Boston Beer the toast of Wall Street
For diligent citizens watching the seemingly
endless series of Republican Presidential candidate debates, the
Washington Times newspaper on 16 January 2012 devised a beer
drinking game which tells viewers which craft beer to down as
candidates deliver a painful litany of clichés.
As befits American political rhetoric, the
"founding fathers", the "writers of the constitution" often get
mentioned in these debates. So the best beer to enjoy at that
moment, says the Washington Times, is a Samuel Adams, named
after Mr Samuel Adams, signer of the Declaration of Independence
and inspiration for the Boston Beer Company's Sam Adams Boston
We are not sure Sam Adams beer needs this
sort of recommendation. Boston Beer has been in the news so
often in the past two years not least because its shares have
been on fire, rising more than 30 percent since October 2011.
Some analysts think there are fundamentally
three reasons why Boston Beer has performed so well on the stock
market and outperformed the U.S. beer market, whose volumes have
been steadily declining: founder and chairman Jim Koch, the
quality of the product it sells, and the company's shrewd
Germany - Bavaria's brewers ... and the rest
With a sales increase of 2.2 percent to 22.1
million hl Bavarian brewers did significantly better in 2011
than brewers in the rest of Germany, not least because they
managed to rev up beer exports. Nevertheless, their best efforts
could not stem a further decline in German beer sales which
dropped 0.1 percent year-on-year, the Bavarian Brewers
Association reported on 7 February 2012.
The 460,000 hl sales hike, favourable as it
may seem to the 630 or so Bavarian brewers, needs to be taken
with a pinch of salt: Which brewers contributed to it? Was it
Munich's major brewers? Or even the Bavaria-based cheap brewer
Oettinger (6.2 million hl), whose eponymous brand happens to be
Germany's major beer brand?
No doubt, beer exports from Bavaria were up
12 percent and hit 3.8 million hl. That's 17.4 percent of total
Bavarian beer sales (the export rate for Germany is15.5
percent). But again, upon closer look, it was the southern
Bavarian breweries (aka the Munich ones, one of whom also brews
a brand like Beck's) which contributed 70 percent to Bavaria's
USA - Anheuser-Busch's beer commercials at
the Super Bowl underwhelm
Silly me: I had thought that the
Super Bowl - 5 February 2012 - was the undisputed biggest moment
of the year for America's Ad Men. OK, it is also one of the
highlights of the sporting calendar, if you are a fan of
Some of the biggest companies in the
world would spend millions of dollars creating the perfect
advert, knowing that making a splash will guarantee them huge
kudos with their consumers.
Such is the importance of the event
that the National Football League secured a broadcasting deal
worth an estimated USD 250 million for the Super Bowl.
According to media reports, each
30-second slot cost around USD 3.5 million, with some prime
moments during the game fetching USD 4 million. Even at those
prices, and even in the worst financial downturn since the
1930s, host broadcaster NBC had sold out in November last year.
This year's Super Bowl included four
and a half minutes of commercials for Anheuser-Busch, making the
brewer not only the exclusive beer advertiser but one of the top
five Super Sunday spenders.
While their Super Bowl ads almost
always made a big splash, this year they were a little drier.
Some of Anheuser-Busch's spots were
used to introduce Bud Light Platinum, which hit stores on 30
January. Judging from the clips available on the internet
Anheuser-Busch presented the product in a fairly straightforward
Other spots, including one starring
the Clydesdales horses, were more about creating feelings for
the brand than having a laugh.
This is definitely a change in tone
for Anheuser-Busch's well-known sense of humour, culminating in
the quirky "Whassup?" commercial campaign for Budweiser (1999
-2002). Although these commercials often were accused of
frat-boy humour with misogynistic overtones, they still proved
Not so this year's fare. No wonder,
Advertising Age, the ad men's leading trade publication, wasn’t
too impressed with Anheuser-Busch's Super Bowl commercials.
In fact, Ad Age’s Ken Wheaton wrote:
“If there’s an opposite of most improved, Anheuser-Busch would
take home the prize. It’s almost as if there’s no clear
marketing leader over there. It was enough to make me long for
the days of Bud Bowl.”
Perhaps the brewer's shift in tone
may have something to do with the country having reverted back
to its more prudish roots. Risk-taking, rule-breaking ideas were
as hard to find among the more than 50 commercials as a piece of
skin in Madonna's outfits during her Super Bowl half-time
The former bullet-bra-wearing pop
queen played it very vanilla as she danced and sang a medley of
her greatest hits. In her final number she even wore a very
chaste full-length coat and lived up to her promise that she
would not bare it all - unlike Janet Jackson, whose 2004
Nipplegate "wardrobe malfunction" will be remembered for ever.
Which left me wondering: why tune in
to the Super Bowl at all?
Germany - Founders of Bionade make for the
Haven't we seen this before - a
small business losing out to big business? On 1 February 2012
the founders of Bionade, Germany's eco-soft drink label, sold
their remaining 30 percent stake to food giant Dr Oetker, a EUR
2 billion food company best known for cake mixes and frozen
The fizz started going out of the
Bionade story three years ago when founder Peter Kowalsk, 44,
and his family together with their partner, the Egon Schindel
Holding (which owns several mineral water brands) transferred 70
percent of their shares to the Radeberger beer group, which in
turn is owned by Dr Oetker.
At the time Mr Kowalsky said that
hitching up with Radeberger would help their brand grow, thanks
to Radeberger's deep pockets and nation-wide distribution
However, joining the Radeberger portfolio of
brands did not do Bionade any good. Sales continued to drop:
from 200 million bottles in 2007 to 60 million bottles in 2010.
In 2011 sales "almost stabilised", said Radeberger, which
translates into an estimated loss of 5 percent over 2010.
Germany - Adieu Bionade - what's the next
At the height of Bionade's success,
you could be forgiven for thinking that Germany's youth had seen
the light: they could enjoy a soft drink while saving the
planet. Bionade was politically correct, environmentally
friendly, almost healthy (well, it was still a soft drink) and
ultra cool. After all, Bionade had put mortal fear into
Coca-Cola's executives that they launched their own healthier
version of a soft drink called The Spirit of Georgia in 2008.
The Spirit of Georgia did not do
well. It floundered as did many other Bionade me-toos.
Strangely, not a single eco-lemonade managed to benefit from
Bionade's downward slide.
Which was a puzzle: Had Bionade's
core users just grown tired of an over-exposed brand or had they
got fed up with the organic-bla-bla itself?
Looks like the latter is the case.
USA – Bud Light Platinum launched in Texas
The beer wasn’t even on sale nationwide yet,
and already the blogosphere worried about how to recycle its
cobalt blue bottle. Beer in blue bottles isn’t exactly the
dernier cri in beer packaging as several brewers have done it
before. Still, AB-InBev chose to launch its much hyped Bud Light
Platinum in Texas on 24 January 2012.
…one week before the rest of the country.
This is AB-InBev’s third brand
extension of the Bud Light brand. The tongue-twister Bud Light
Lime was released in 2008 followed by Bud Light Golden Wheat in
Bud Light Platinum is another
attempt by AB-InBev to win back a fledging demographic of
The trade publication Advertising Age
described Bud Light Platinum’s release as part of a bid “to win
over younger drinkers who have been gravitating to spirits.”
Platinum does not seem to be aimed at craft beer drinkers -- who
tend to be more sophisticated drinkers into full-flavored beer
experiences -- but rather at nighttime partiers.
USA – Dave Peacock steps down as President
Emotions were flying high in the
blogosphere when on 24 January 2012 the St Louis Today newspaper
reported that Anheuser-Busch President Dave Peacock had resigned
and would be replaced by Luiz Edmond, the Brazilian-born North
America Zone President of AB-InBev.
Calling him the leader of the "Judas Squad"
that put thousands of St Louis employees on the street and out
of work, bloggers cheered his departure with lots of
Brazil – New chief for Schincariol
Gino Di Domenico, the new President of
Schincariol, has his work cut out for him. Not only will he have
to calm things down at Brazil’s third ranking brewer following
the bumpy takeover by Japan’s Kirin last year. He will also have
to implement a succinct strategy to fight back Petropolis’
advances on to Schincariol’s home turf in the northeast of
United Kingdom – Botoxing history
It’s nice to see that one’s advice is
occasionally taken up. A few years ago I wrote that perhaps AB-InBev
should employ some bloggers to give Mr Brito’s malicious U.S.
critics a good run for their vitriol on the internet. In early
January 2012 UK media found out that AB-InBev had attempted to
do just that.
Inquiries by the Labour Member of
Parliament Tom Watson revealed that AB-InBev had been so keen to
kill off the unflattering nickname “wife-beater”, which their
Stella Artois brand had acquired in the UK in the early
noughties, that the brewer hired a top lobbying company to
smooth out Stella’s entry in the online encyclopedia Wikipedia,
by getting rid of the dreaded nick-name.
Portland Communications managed to
improve the beer's online reputation on behalf of its brewer,
AB-InBev. This is ok by Wikipedia’s rules as it’s an open
encyclopedia and anybody can alter or improve entries.
However, like botox, the effects of
which wear off after a few weeks, the surgically enhanced Stella
Artois entry did not last for long as the site's watchful users
spotted the editing and reversed it.
To their embarrassment, Wikipedia managed to
trace the new edit back to Portland Communications. A
spokesperson for Portland did not deny they had made the
changes, saying they had been done in an open manner and within
That's true. But it does not reflect well on
your worldly wisdom if you try to rewrite history while
everybody in the UK over the age of thirty will have that
particular nickname ingrained on their memory for eons. Sadly
but true, it has already become part of the UK’s cultural DNA.
Like that other immortal slogan, which Heineken coined in the
1970s: “Heineken refreshes the parts other beers cannot reach”
which has spawned an endless stream of spoofs for its hmhmhm
My advice to AB-InBev: be a good sport and
show some sense of humour.
United Kingdom – AB-InBev goes easy on the
AB-InBev is to cut the alcohol
content of their Stella Artois, Budweiser and Beck’s brands in a
move to offset escalating duty costs.
Stella Artois, Beck’s and bottled
Budweiser will switch from 5.0% to 4.8% ABV in the on-premise
sector in April this year. Bud Draught will remain at 4.3% ABV,
it was reported in January 2012.
The 0.2% change could save GBP 0.02 (USD
0.04) on the cost of duty for every pint of beer sold.
AB-InBev did not offer any specific reason
for the alcohol reduction. The move is not without its risks.
Readers will recall that both Foster's and Lion in Australia
embarked on this strategy a couple of years ago in order to
counteract the automatic six-monthly excise increases. As far as
I can tell, consumers did not complain at the time as price
rises were minimised but obviously you can't keep on reducing
alcohol to meet every excise rise.
What long-term effect these reductions had on
the struggling Australian beer market, however, is of course,
hard to measure. It's worth noting that many craft beers and
domestic and imported premiums tend to have higher alcohol
contents than mainstream Australian beers.
United Kingdom - Jacob's Creek launches
lower alcohol wines
AB-InBev are not the only one to
adjust (read: lower) the alcohol content of some of their
products. As of February 2012, one of the major Australian wine
brands, Jacob’s Creek, has introduced a range of four wines with
lower alcohol contents: sparkling or still sauvignon blanc,
vermentino, and shiraz rosé, which sit between 9.5% and 10.5%
ABV. The wines are sourced from vineyards noted for lower sugar
levels at early ripeness with grapes picked in the early hours
of cooler nights.
Despite the recent growth of reduced alcohol
wines in the UK, with supermarket chain Sainsbury’s having
committed itself to doubling its lighter alcohol range by 2020,
Jacob's Creek is careful to differentiate its Cool Harvest range
from the light wine category, which suffers from a bad image.
2009 december ·