Beer Monopoly




    International Reports







Posted February 2016

China – New challenge for brewers: sinking sales

After decades of rising sales, brewers in China have to adjust to a new reality: beer sales in China fell 7.3 percent in the January to September period last year. Beer sales dropped for the first time in 2014 and the downtrend continued into 2015. Brewers are responding to this decline by shutting down facilities and slashing advertising budgets, Asian media say. Read on


Denmark – It’s a first: Asia is bigger profit contributor for Carlsberg than Russia

How times are changing. Carlsberg made more profit last year in Asia than in eastern Europe for the first time. Eastern Europe - predominantly Russia - accounted for just 19 percent of operating profits last year, down from a peak of 52 percent in 2009, while Asia jumped to 28 per cent. Read on


UK – Asahi offers to by Peroni and Grolsch for EUR 2.6 billion

ThaiBev’s aggressive posturing did its trick: it separated the serious bidders for SABMiller’s brands Peroni and Grolsch from the ditherers.

On 10 February 2016 AB-InBev said that it has received a binding EUR 2.55 billion (USD 2.9 billion) offer from Japan’s Asahi. The two have now entered into a period of exclusivity to finalise a deal, which also includes London’s Meantime brewery and a UK distribution subsidiary of SABMiller called Miller Brands.

Asahi’s bid stopped its rivals, including Thai Beverage, the maker of Chang beer, and a handful of private equity buyers in their tracks. Read on


Africa – The party is over

Officially at least, AB-InBev’s takeover of SABMiller is all about breaking into the African market, where SABMiller is the dominant player. But Africa’s days of buoyant economic growth seem to be over, for the time being. “Low oil prices in oil-producing countries are affecting us very obviously, like in Nigeria,” Heineken’s CEO Jean-Francois van Boxmeer told CNBC Europe's "Squawk Box" on 10 February 2016.

Because of the close correlation between the general state of the economy and beer consumption, brewers rightly worry that plummeting world prices for oil, platinum, copper, coal and iron ore will leave African countries with a booming headache and consumers strapped for cash.

As if this were not enough, foreign direct investments are dwindling to a trickle because of Africa’s notorious byzantine bureaucracy and its deteriorating security situation.

Already in January 2016 SABMiller announced that it will call time on its brewery in south Sudan (opened in 2009), after its business has been hampered by an acute shortage of foreign currency, which prevented it from buying raw materials. SABMiller may have braved the civil war, which has seen more than two million people flee since fighting broke out in Juba in December 2013, but it has now come up against a major shortage of hard currency. Unless there is a miracle, the last beer is expected to leave SABMiller’s brewery, which employs almost 240 people directly and thousands indirectly, in March 2016.

Also in January, Zimbabwe’s Delta Corporation, in which SABMiller has a 23 percent stake, reported that lager beer sales dropped 14 percent in the nine months through December 2015. Like South Sudan, Zimbabwe is facing its worst-ever liquidity crisis, with both government and the private sector struggling to meet monthly wage bills.

On the whole SABMiller seems to keep up well across Africa. Read on


Brazil - What’s Aloha in Portuguese?

Clever AB-InBev. With consumer interest for U.S. craft beers rising in many parts of the world, they did not wait for their competition to fill the shelves, they did it themselves. After launching the Goose Island craft beer brands in The Netherlands and Belgium last year, they are now taking the Hawaiian Kona beer to Australia and Latin America.

Earlier this year, the publicly traded Craft Brew Alliance (CBA), in which AB-InBev has a 32 percent stake, announced that it is partnering with AmBev, the Brazilian subsidiary of AB-InBev, to expand the distribution of Kona beers to Brazil.

AmBev is Brazil’s leading beer and beverage company with a market share of 68 percent. Whereas in the past AmBev had to compete with Brazil’s 300+ pesky craft brewers by pushing its German wheat beer brand Franziskaner, it is now well positioned to meet the increasing demand from Brazilian beer drinkers with a genuine American brew. Read on


USA – “We can win the fight with the megabreweries”

Should Jim Koch, the founder and public face of Samuel Adams beer ever seek a career change, he should consider becoming a motivational speaker. Mr Koch firmly believes that craft beer can win the fight with the Big Brewers – provided craft brewers don’t stop innovating and don’t succumb to in-fighting.

That’s the message Jim Koch, 65, the founder and CEO of Boston Beer, gave to more than 300 Ohio Craft Brewers Association members at the trade group’s annual conference on 3 February 2016.

So far, Mr Koch’s proviso does not seem to apply. Collectively, U.S. craft brewers’ market share in the U.S. is estimated to have risen to 15 percent in 2015 from 11 percent in 2014.

But, nevertheless, Mr Koch’s preaching fell on open ears, as the U.S. craft beer industry appears to harbour deep and existential misgivings after several prominent industry members decided to sell out to Big Brewers last year. Read on


Australia – U.S. craft beer to hit the beaches

The Brewers Association may boast that craft beer exports are growing by double digits, but on close inspection one can see which brands are actually benefitting from foreign markets’ pull: they are AB-InBev’s “crafty brands”. Last year already its Goose Island beers were sitting prominently on Dutch and Belgian supermarket shelves.

This year, it seems, it’s Australia’s turn. The market ranks 4th among export destinations for U.S. craft beer (behind Canada, Sweden and the UK).

An increasing number of pubs with large beer offerings are adding American beers to their ranges. The demand for international craft beers in the Australian market encouraged the boutique spirits distributor, Handcrafted, to create a sister company, Craft Revolution, a business which now has a wide American beer portfolio, including beers from Kona, Redhook Brewery and Widmer Bros. These brands are owned by Craft Brew Alliance, a listed brewery group in which, incidentally or not, AB-InBev holds a 32 percent stake.

Would Australian consumers be aware that Craft Brew Alliance does not qualify as a craft brewer – as defined by the Brewers Association? Probably not. Besides, would they care? Read on


Australia – Jacob’s Creek: The making of a global wine brand

The 40th anniversary of the introduction of the Jacob’s Creek range by Orlando Wines in 1976 was marked by a feature in the Adelaide press which related the history of this now very popular Australian brand.

The brand has grown from a few thousand cases of a single red wine blend – sourced from the Coonawarra, Keppoch and McLaren Vale regions of South Australia in 1976 – to the current 51 wines in a range (which includes Classic, Reserve, Cool Harvest, Heritage and St Hugo under the Jacob’s Creek banner), which sold almost 75 million bottles (over six million cases) in 2013/14. Read on


Vietnam – Australians invest in Southeast Asia’s first malting plant

Call it frontier spirit. A company owned by Western Australian grain growers and the Indonesian billionaire Anthony Salim is currently constructing an AUD 90 million (USD 64 million) malting plant in Vietnam that is likely to change the face of the local brewing industry.

In 2014 European malt made up approximately 50 percent of all malt imported into Vietnam, whilst Australian malt was only 30 percent. Now Intermalt, which is actually owned by Interflour which in turn is a 50/50 joint venture between Mr Salim and the Western Australian co-op CBH, is hoping to invert these numbers.

Vietnam represents a prized opportunity for the brewing industry, thanks to its relatively established beer drinking culture. Already it is the largest beer market by volume in Southeast Asia, with consumers showing a keen appetite for a quality product. Read on


Germany – Cheap beer paradise

It’s a miracle. In 2015, German brewers are estimated to have sold as much beer as in the previous year (95 million hl), without there having been a special “beerable” event like the World Football Championship in 2014. Actually, it’s not a miracle at all. German brewers just did what they have been doing for long: they notched up the promotion rate. During the first half of 2015, Germany’s top 10 pils brands sold 76 percent of their volume on offer. In 2010, only 60 percent of their volume was sold at a discount.

Promotion figures for the second half 2015 are not out yet, but any shopper will confirm that throughout the month of December all beers were sold at a discount, which probably allowed German brewers to collectively limp into the black.

Limp indeed because how much profit will they have made as the average promotion price was only EUR 10.35 (official retail price EUR 12.76) for a 10 litre crate of beer? (EUR 10.35 = USD 11.21) Read on


UK – Psychological warfare in the Peroni-Grolsch auction

All is fair in love and war. Company auctions are usually hush-hush affairs. But not for ThaiBev. It let it be known on 25 January 2015 that it has used its Singapore listed unit Fraser and Neave (F&N) to “bid without condition” for SABMiller's Peroni and Grolsch beer brands. One day later F&N confirmed on its website that it has expressed an interest.

Though F&N gave no details about pricing, many wonder if touting its non-binding bid to the world was an attempt to sway the seller (AB-InBev) in its favour or to make its competitors in the auction tremble in their boots?

To date ThaiBev is the only one to have made public that they are among the bidders in a deal that could be worth USD 3 billion - or more. Read on


Italy –Media‘s coolish response to the Peroni sale

Given that in Italy, a country of about 60 million drama queens, bad news tend to be greeted by loud screams of “the end is near”, the quasi silence which followed the announcement that the beer brand Peroni was to be sold, still appears remarkable.

After all, did not SABMiller market Peroni as quintessentially and eternally Italian – much like Sophia Loren, la Vespa and Giorgio Armani (that have been around like forever too)?

Perhaps the Italian media’s reluctance to turn this sale into a “scandalo“ is due to the fact that Peroni has been owned by a global brewer – first by SABMiller and now briefly by AB-InBev – since 2003. Too long to make anybody remember that it was Italian-owned once.

Also when SABMiller took over Peroni, it did not axe jobs. This rendered the takeover almost benign – in the eyes of the concerned public at least. In those days joblessness was around 8 percent (today it’s over 12 percent).

Besides, and this is a major point , it was thanks to foreign brewers taking a foothold in the Italian beer market that in moral terms (!) the general situation improved massively. Before Heineken at al came to Italy, beer quality was so so. Many brewers engaged in illicit sales (bypassing the tax man) and fiddled with their excise payments (except for the northern Italian brewer Forst). In other words, foreign brewers have literally cleaned up the Italian brewing industry and made it more law-abiding. Today, Italy’s major brewers Heineken and SABMiller control 50 percent of domestic beer sales and Carlsberg 6 percent, according to estimates. AB-InBev, through imports, has a 7 percent market share. All other imports combined represent around 20 percent of sales.

Despite brewers’ best efforts it’s perhaps for these historical reasons that beer is not exactly relevant to Italian consumers. Per capita beer consumption is only around 29 litres. As to preferred brands, Italians seems to be very little patriotic: only one in five Italians declared to prefer an Italian brand to an import, according to a report by UK Trade and Investments.

Ultimately, the polite disregard shown towards the Peroni sale may be attributed to Italians having much more on their plates to upset them. No day goes by without a scandal involving politicians hitting the news. No day without groups of people finding out that they are not entitled to a pension. No day without the discovery of illegal rubbish dumps; no day without media sighting ruined artefacts due to neglect. As one observer puts it, it’s because of all these really big problems that no one in Italy can spare a thought for the fate of Peroni.


Australia – Heineken's profits have gone flat

Trust Australian journalists to go snooping after Lion’s figures as soon as the market-leading local brewer submits its financial results with the corporate regulator. On 26 January 2015 media revealed that the Lion-Heineken joint venture suffered a 16 percent fall in annual profits in its latest financial year (ended 30 September 2015) as net profit after tax dropped to AUD 10.5 million (USD 7.5 million) from AUD 12.5 million a year earlier. However, sales increased 2.5 percent to AUD 67.4 million (USD 47.7 million) in the financial year 2015. Read on


USA – More than 4,000 craft brewers in the U.S. in 2015

They are wowing the world. As of 1 December 2015 there were 4,144 breweries operating in the U.S., the most ever, says the Brewers Association. According to historians, the previous high-water mark of 4,131 was back in 1873.

Although beer industry observers have known this day was coming, the pace of growth was still explosive: At the end of 2011, there were 2,033 breweries and in 2005, there were only 1,447. And 25 years ago? The Brewers Association registered only 284 breweries in 1990.



2016 january

2015 december · november · october · september · august · july · june · may · april · march · february · january

2014 december· november · october · september · august · july · june · may · april · march · february · january

2013 december · november · october · september · august · july · june · may · april march february january

2012 december november october september august  july june may april march february january

2011 december november october september  august july june may  april march february january