Beer Monopoly





  International Reports








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?  Read on


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 February 2012.

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 Moortgat.

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 and China.

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 even less.

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 February 2012.

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 Republic.

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 more.

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 words

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 premium credentials".  Read on


Denmark - Light at the end of the Russian tunnel?

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 intense competition.

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 Baltika's shares

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.  Read on


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 current fix?

The brewer wants to boost investment in China, Carlsberg CEO Jørgen 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.  Read on

USA – MillerCoors sales and volume decline in 2011

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.  Read on


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 percent.

Read on


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 itself.

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 nous.

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 (SABMiller).

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 comment.

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 Budweiser trademark?

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 no.


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, respectively.  Read on


USA - Coca-Cola grows volumes and announces cuts

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.  Read on

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.  Read on


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 Lager.

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 investment policy.  Read on

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 beer exports.  Read on


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 football.

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 way.

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 memorable.

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 performance.

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 exit

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 pizzas.

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 network.

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.  Read on


Germany - Adieu Bionade - what's the next big thing?

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.  Read on

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 2009.

Bud Light Platinum is another attempt by AB-InBev to win back a fledging demographic of drinkers.

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.  Read on


USA – Dave Peacock steps down as President of Anheuser-Busch

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 non-printable expletives.  Read on


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 Brazil.  Read on


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 Wikipedia's rules.

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 innuendo.

My advice to AB-InBev: be a good sport and show some sense of humour.


United Kingdom – AB-InBev goes easy on the alcohol content

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.  Read on


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.  Read on



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