Posted January 2020
Canada – Due to cannabis? Beer consumption declines in 2019
In the first full year of cannabis legalisation, the nation’s domestic beer production fell 3.9 percent over 2018, according to data from Beer Canada, a trade body. The drop in consumption was less pronounced, though, as beer imports grew 1.4 percent. As reports the news site fooddive.com, the decline is worse than in previous years. Between 2014 and 2018, beer volumes fell by an average of 0.3 percent. Market observers wonder if beer volumes taking a hit is a consequence of Canada legalising recreational cannabis in late 2018. Read on
Belgium – Will AB-InBev seek replacement for its Brazilian CFO?
It would be a symbolic sacrifice if AB-InBev were to part with its current Chief Financial Officer, Felipe Dutra, in order to improve its standing with analysts and investors. Mr Dutra has been CFO of the world’s major brewer for 15 years.
As was reported by the website retaildetail.eu on 8 January 2020, quoting an article in the Financial Times, the future of Mr Dutra was discussed at the company’s latest Board of Directors meeting. Read on
Netherlands – Heineken’s plug&play draught systems are a sizeable venture
January’s electronics sales are upon us. So why not use the discounts and splash out on one of Heineken’s draught systems? The discounts available are wide-ranging, though. During an investor conference in November 2019, Heineken’s Chief Commercial Officer Jan Derck van Karnebeek mentioned that what is called an “adjacent business model” (its draught systems David and Blade for the on-trade and the Sub et al for in-home consumption) is actually a sizeable, profitable and growing business for the Dutch brewer. Those gadgets had a net turnover of more than EUR 300 million, following five years of steady increases, which averaged at about 15 percent annually. Read on
USA – Constellation brands launch Corona hard seltzer this spring
Constellation Brands will spend USD 40 million, its biggest-ever single-brand investment, to launch its Corona brand hard seltzer this spring, marketwatch.com reports. Per the website, Corona hard seltzer will come in four flavours: tropical lime, mango, cherry, and blackberry lime. Retailers have already made space on the shelves for the new brand, William Newlands, Constellation’s Chief Executive Officer, said on 8 January 2020. Read on
USA – MillerCoors’ brewery will shutter unless Pabst buys it
Molson Coors will cease production at its Irwindale brewery, California, in September, unless Pabst Brewing takes up the option to buy the facility, The Los Angeles Times said on 8 January 2020. The brewery opened in 1980, and brews the MillerCoors line of brands, as well as other brands by Pabst. With a production capacity of 6 million barrels per year, it only did 4.8 million barrels (5.6 million hl) in 2019, the newspaper said. Read on
USA – Why should virtual brewer Pabst buy a brewery?
Is this some elaborate blame game? MillerCoors has announced the closure of its Irwindale brewery, while granting rival brewer Pabst the option to buy it. But Pabst does not need the capacity. In November 2019, Pabst inked a deal with City Brewing, which will see City take over most of Pabst’s production over the next five years, beginning in 2021. According to Beer Marketer’s Insights, a trade publication, the contract brewing agreement is to run until 2040. Read on
Germany – Beer sales continue downward trend
A hot summer is no longer enough to boost sales. In 2019 beer sales are forecasted to have dropped more than 2 percent to 85.2 million hl. This equals the shuttering of a large German brewery. What has made the year-on-year comparison particularly tough is the fact that 2018 was an unusually good year for brewers. The long warm summer and the soccer world cup made for a higher beer consumption – about 0.5 percent or 500,000 hl over 2017. Read on
Germany – Jürgen Klopp becomes Erdinger’s brand ambassador
The one and only Jürgen Klopp, Manager of the Champions League winner Liverpool FC, has become Erdinger’s brand ambassador. The partnership was announced on 29 December 2019, the day Erdinger’s owner Werner Brombach celebrated his 80th birthday with over 1,000 guests. Read on
Germany – Wheat beer sales under pressure
If Hell beers and other specialties increase sales in an overall shrinking market, something has to give. In this case, wheat beers. Long ranked second most popular beer style behind pils, wheat beer has seen its position snatched away by Helles in 2019. In 2018, pils remained Germans‘ most sought after beer style, with a market share slightly over 50 percent. Wheat beer and Export (a German style) came in second with 7 percent market share each, followed by Hell or Helles (6 percent). All this changed in 2019. Thanks to its increasing popularity, Helles continued its sales hike and seriously dented wheat beer sales. Read on
USA – Brewers Association expects 300 brewery closures in 2019
Even with New Belgium’s volumes deleted from the Brewers Association’s table, the industry organisation expects craft beer volumes to have grown about 4 percent or 1 million barrels in 2019. Between 2016 and 2019, craft beer growth has slowed and volumes have grown at single-digits only. Read on
Australia – Coopers hikes sales but suffers hit in profits
Price competition in a crowded beer market, combined with higher costs, have eaten into the profit of Coopers, Australia’s major independent brewer. Total beer sales rose 2 percent to nearly 770,000 hl, but pre-tax profit dropped 33 percent to AUD 23.1 million. Also, container deposit schemes (cash for empty cans and bottles) have cost Coopers about AUD 3 (USD 2.10) per carton of beer. In theory, beverage producers should have passed the costs of the container deposit schemes on to their customers, by increasing prices between AUD 3 to AUD 5 for a 24-drink carton. However, stiff competition in the Australian beer and beverage market, as well as worries over declining sales in the off-premise, have forced producers to absorb these costs themselves. This has had a detrimental effect on their profits. Read on
Australia – Two standard alcoholic drinks a day no longer safe
Dry January is upon us. Those still imbibing may want to take note of Australia’s National Health and Medical Research Council (NHMRC). Its new tougher guideline recommends no more than 1.4 drinks per day. The NHMRC’s new guidelines on drinking alcohol say that adults should have no more than 10 standard drinks a week – or roughly 1.4 per day – to reduce health risks. 1.4 standard drinks equal 375 ml of a full-strength beer or 150 ml of white wine. The maximum an adult should have on a single day is four standard drinks. In the past, the recommended quantity was two standard drinks per day. Read on
USA – Kirin’s purchase of New Belgium okayed despite Myanmar links
New Belgium is no longer employee owned and can no longer be considered an independent craft brewer, after employees/shareholders approved of the sale to Australia’s brewer Lion on 17 December 2019. Lion is part of Kirin, a Japanese beverage firm. Incidentally, New Belgium declined to disclose the number of employees who voted, or a breakdown on how they voted. Read on
USA – Ethics in business: from Myanmar to Fort Collins
Consider this: Kirin’s purchase of craft brewer New Belgium did more to raise international awareness about Kirin’s political balancing in Myanmar than previous reports by the United Nations and Amnesty International.
In 2015, Kirin paid USD 560 million for a 55 percent stake in Myanmar Brewery, the country’s major brewer. The remaining stake is held by Myanmar Economic Holdings Limited (MEHL), a military-owned conglomerate, which is led by commander-in-chief Min Aung Hlaing. As says the Financial Times, he is accused of leading military-backed ethnic cleansing against Rohingya Muslims in 2017, that sent more than 730,000 fleeing into Bangladesh amid reports of mass killings, rapes, and arson. Read on
Myanmar – Hitting the headlines: reputational risks for foreign firms
Multinational companies doing business in the south-east Asian country could be facing risks to their reputation, following criticisms of Kirin’s partnership with a military-linked conglomerate. Kirin’s commercial dilemma is not unique.
It boils down to this: Shall foreign companies take on partners linked to a military, which has been accused for years of corruption, land-grabbing and human rights abuses, or shall they not do business at all in Myanmar? The EU, along with the US, lifted most sanctions against Myanmar after 2011, to encourage the transition to democracy from almost half a century of military dictatorship. Read on
Australia – Regulator concerned about sale of CUB to Asahi
The country’s competition watchdog ACCC has raised concerns over the USD 11 billion deal by AB-InBev to sell its local unit CUB to Japan’s Asahi. AB-InBev acquired Carlton & United Breweries (CUB) from SABMiller in 2016. In a preliminary statement, the Australian Competition and Consumer Commission (ACCC) said on 12 December 2019 that the deal would reduce competition in the cider market and may also do so in the beer market. Read on
Japan – Asahi to stop disclosing data for volume sales
Asahi Breweries will report beer sales by value rather than volume, starting with 2019 data. This will allow it to bow out of a costly battle for market share in Japan and free up resources for expansion abroad. As was reported by the Nikkei Asian Review on 18 December 2019, Asahi’s President Kenichi Shiozawa projects a steep plunge in the size of Japan’s beer market from 2030 onwards. Therefore, Asahi will need to move away from an obsession with volume sales and market share. Read on
USA – Congress extends brewers’ tax relief for one year
The Brewers Association (BA) has expressed its gratitude to the 116th Congress for extending the current Federal Excise Tax (FET) rates for breweries and beer importers for one year (2020). President Trump’s two-year long tax relief for brewers, issued in 2017, was to expire on 1 January 2020 unless Congress acted by 31 December 2019. At the last minute, on 20 December 2019, congressional leaders extended the relief for another year, thus acknowledging the profound impact the reduced excise tax rate has had on the growth of a uniquely American industry, the BA said. Read on