Posted July 2013
Germany – AB-InBev turns prime witness against beer cartel
AB-InBev is cooperating with Germany’s anti-monopoly agency to help in its investigation of a dozen major brewers for prize fixing. A spokesperson for AB-InBev Germany, the brewer of Beck’s beer, told media on 6 July that AB-InBev used the leniency provision and turned itself prime witness. Prime witnesses in cartel probes usually receive a pardon or lesser fines.
The spokesperson would not give any more details as the case is still pending. However, it’s expected to close next month. According to rumour, Germany’s brewer Bitburger also assisted the anti-monopoly agency in its probe.
Two years ago the anti-monopoly agency began its investigation, following allegations that brewers illegally clubbed together to simultaneously raise prices of about two dozen major German beer brands. If found guilty, the accused brewers could be faced with fines in the three figure millions.
In a separate probe, the anti-monopoly agency is investigating several breweries in Cologne accused of a similar offence.
Finland - Heineken sells Hartwall business to Royal Unibrew
In February it was only a rumour put out by the UK's Sunday Times that Heineken would dispose of its Finnish unit. But on 11 July 2013 it became a fact when Heineken announced that it has signed an agreement with Danish brewer Royal Unibrew for the sale of its Finnish business Hartwall.
A multi-beverage company with a broad product range, Hartwall is ranked second behind Carlsberg in Finland, says Royal Unibrew. Hartwall is the market leader in the categories of mineral water, cider and Ready To Drink (RTD) and number two in the categories of beer, soft drinks and energy drinks. Non-alcoholic beverages account for 43 percent of revenue, whereas beer, cider and RTDs make up 44 percent. The business unit Hartwa-Trade operates as an agency for a number of international wine and spirits brands and contributes 13 percent of Hartwall's revenue.
Royal Unibrew did not pay as much for Hartwall as many thought it would fetch (EUR 590 million/USD 790 million). In actual fact, Royal Unibrew got Hartwall for EUR 470 million which includes interest, net debt and net debt equivalents assumed by Royal Unibrew.
To fund the acquisition, the stockmarket listed Royal Unibrew will issue shares to the Finnish investment company Hartwall Capital, which is the investment vehicle of the Hartwall family, the founder and owner of the Hartwall Brewery until the merger with Scottish & Newcastle in 2002. The family was a significant shareholder of Scottish & Newcastle until it was sold in 2008 to both Heineken and Carlsberg. Through taking a minority interest in Royal Unibrew, the Hartwall family seems to be making a safe investment decision, but they are also taking a bit of a gamble that Royal Unibrew can raise profit margins in Finland when Heineken could not. Read on
Australia – Coopers brewery sponsors local soccer stadium
Netherlands - Heineken seeks to tap "silvermarket"
Don’t the anti-alcohol watchdogs have anything more serious to worry about? As of July 2013, Hindmarsh Stadium, the 17,000-capacity home of the soccer club Adelaide United, will be known as Coopers Stadium for the next five years.
Coopers now have exclusive naming and pouring rights at the ground. However, this deal is not with the club and will not provide funding to Adelaide United for football, development or anything else.
Still, this sponsorship deal has generated major angst amongst anti-booze forces as it goes against the recent stand of the Football Federation of Australia (FFA) to ban alcohol sponsorship of the sport. Read on
For over a decade, demographers have said that that the 21st century will be ruled by the “New Old”, formerly known as the Baby Boomers - those born in the 1950s and 1960 - who as a cohort are significant on account of their size alone. In many countries, like in the U.S. and Europe, they represent the largest generational segment. But have consumer goods companies woken up to the challenge?
Probably not, since their marketing departments are usually staffed with youngsters who are used to lumping all people over the age of 60 into a grey basket of zimmer frames, comfy shoes and big-buttoned telephones. What is more, advertising's creative types, the people who dream up commercials, are considered ancient by the time they are 35. Finding the right language and imagery to communicate with an older audience, let alone coming up with the right products for the “over 60s”, pose big challenges for them. Read on
Israel - Sales of pomegranate wine surge
French vintners beware - a pomegranate wine from Israel could just be what the doctor recommends. Pomegranate wine is pleasing on the palate and good for the heart. What more can you ask from a drink? On a recent visit to Israel I discovered pomegranate wine, which could easily become my drink of choice because of the above reasons.
My favourite brand is a pomegranate wine by the name of Saba Yair Delicat, produced by Yair Etzioni from the moshav Ram-On, an Israeli-type of cooperative, about 100 km to the north of Tel Aviv.
Made from fermented pomegranates, Saba Yair Delicat has a dark red colour. Yair serves the 9% ABV wine chilled, which immediately made me think that his pomegranate wine bears closer resemblance to a "scrumpy" or a "hard cider" than to a wine, given its alcohol content.
Pomegranate wine is tricky to make and expensive to drink, but has unique health benefits. Because pomegranates have a much lower sugar content than wine grapes, they cannot be effectively fermented. To get around this problem, Yair adds some sugar before fermentation, while some of his competitors allegedly use a new variety of pomegranate, which is sweet enough for wine production.
Still, his wine is more bitter than his competitors' as he does not just use the juice but also the pulp, which he says contains all the goodies that are beneficial to your health. Read on
Belgium – No outcry following tax hike
to Belgian media? Have they grown tired of complaining against
price hikes on beer? Or are they saving the news of an 8 percent
tax hike on beer, effective 1 August 2013, for the silly season
next month, when brewers will have little choice but to pass the
tax increase on to consumers?
Brewers’ Association, at least, has reacted immediately and voiced
its disapproval of the tax increase on beer, which the Belgian
government agreed upon on 1 July 2013.
This is the first time since 1992
that the excise on beer has been raised. The excise on wine and
spirits has already been put up by 12 percent in January this
At the moment,
consumers will have little reason to complain about the price of
beer as Alken-Maes has a half-price promotion running for a crate
of its beer. Not to be left out, AB-InBev has its products on
offer every three weeks, we have been told.
Belgium – AB-InBev wins EU
trademark for “Bud”
then. AB-InBev was granted trademark rights throughout the
European Union for the word “Bud” on 14 June 2013. The trademark
registration follows AB-InBev's victory earlier this year in its
long-running trademark clash over the Bud name with Czech brewer
As Budvar didn't
appeal the January court decision, the Bud trademark registration
process went ahead.
South Africa – Political
heavyweight leaves SABMiller’s board
SABMiller fare without a political fixer par excellence like Cyril
Ramaphosa, who decided not to seek re-election to SABMiller's
board of directors at the brewer’s up-coming Annual General
Meeting on 25 July 2013
Ramaphosa, 61, joined the board of South African Breweries Limited
in 1997 as a non-executive director and must be considered one of
its more colourful members, being a South African politician,
businessman, activist, and trade union leader.
must have counted its blessings that Comrade Cyril, as he is known
to his African National Congress (ANC) pals and fellow trade
unionists, probably used his political clout to protect SABMiller
from workers’ militancy, which has already cost mining companies,
as the worst affected, and the state billions of rand while
savaging South Africa’s reputation as an investment destination.
reason for Mr Ramaphosa leaving SABMiller’s board is that he was
elected Deputy President of the ANC in December 2012, which many
view as a stepping stone to a senior position in South Africa’s
government, ahead of the general election due in 2014. This would
have led to a conflict of interests, real or perceived.
Fortunately, even after his departure Mr Ramaphosa will only be a
phone-call away so SABMiller need not worry all that much.
As a director of
SABMiller, Mr Ramaphosa received a remuneration package worth USD
130,000, according to the brewer’s latest annual report. His
personal net worth Forbes estimated to be USD 675 million, which
ranked him 21st on Forbes’ list of wealthiest Africans in 2012.
Canada – Molson Coors wins
injunction in spat with Miller
They may be partners with Coors in
the U.S., but this did not prevent SABMiller from terminating a
licensing agreement with Molson Coors in Canada, to which Molson
Coors responded by dragging SABMiller to court.
On 20 June 2013
Molson Coors scored a temporary victory: the Ontario Superior
Court granted Molson Coors an injunction that prevents Miller
Brewing, SABMiller’s U.S. unit, from ending the agreement before
the trial begins, which is scheduled for December this year.
Europe – Passport scan
opens Molson’s fridge
The idea isn’t
new, but it certainly warrants repeating. In 1998 the
songwriter/comic Tony Hawks travelled around Ireland for a month
in the company of a fridge and turned his adventures into a
bestselling book. In May this year Canadian brewer Molson told its
advertising agency Rethink to set up red fridges at various
locations around Europe as part of its reactivated campaign “I.
Am. Canadian”, which was binned a decade ago.
The fridges were
stocked with Molson’s beer. But there was a catch: you needed a
Canadian citizen and his passport to open it. If this sounds like
a stunt out of Candid Camera to you, well, honi soit qui mal y
The fridges have
already made an appearance in Canterbury, London, on the White
Cliffs of Dover, in Cassel in northern France, in Brussels, and
somewhere in rural Belgium. People quickly took up the search for
a tourist who would insert his passport into the fridge, whereupon
it would spring open and he could bequeath the beer to the crowd.
campaign will go further than the TV ads that will air throughout
the summer. Molson is exploring bringing fridge to Sochi for the
Winter Olympics, as well, Canadian media reported.
insiders have already bickered that Molson’s fridge campaign
reminds them of Coca-Cola’s Happiness Stunts from a few years
back, which often featured fridges that could only be opened if
punters performed certain tasks, like embracing the machine.
So what? There
are probably more uses for a fridge than you and I can think of.
Spain – Zero tolerance for
boozers on Mallorca’s beaches
The city of Palma de Mallorca in
Spain is seeking to regain control of its beaches from hordes of
unruly tourists who indulge in binge drinking, German media
Mallorca is the largest of the
Balearic Islands in the Mediterranean and attracts about 10
million tourists each year who swamp the local island populace
of some 780,000 people (nearly half of whom live in the
capital of Palma).
The last weekend in June saw
the introduction of a curfew on outdoor drinking between 10 pm
and 1 am. It will be enforced along Palma’s beachfront between
Balneario (beach bars) number 5 and 6.
The curfew is to run until 1
September this year. But worse is to come: next year, the city
council plans to implement a 24 hour curfew on outdoor
drinking across the whole town, following complaints from
residents about noise and disorderly behaviour.
A further measure will be to
ban serving alcohol in buckets. Yes, you read correctly.
Twenty years ago in the district known as Balneario number 6,
the “bucket and straw” was invented. In the local bars groups
of holidaymakers were presented with a mix of spirits and
fruit juices served in a large metal or plastic bucket
together with long drinking straws so that they could imbibe
the cocktail communally.
The council hopes that by
prohibiting outdoor drinking the city will attract a better
quality of tourists. In the past tanked-up tourists were a
sight to behold, vomiting in front of other visitors, and
leaving rubbish, cigarette ends and beer bottles strewn around
on the sand.
According to UK media, the
major culprits are not British. Strange, but true. Austrians
top the list as worst offenders, followed by Germans with the
British in third place
Israel – If there’s no arak,
let them drink cognac
The Finance Ministry said it
will seek ways to re-examine alcohol prices, following an
outcry over its decision to raise alcohol taxes six months
earlier and higher than planned.
On 1 July 2013 many popular
spirits, such as arak and vodka, saw price increases of 100
percent or more per bottle. For example,
1. Perfect Vodka Classic – was
NIS 40 and is now NIS 104
2. Elite Arak – was NIS 37.50
and is now NIS 81.50
3. Azim Arak – was NIS 30 and
is now NIS 60
Incidentally, imported whiskies
and cognacs became cheaper.
Johnny Walker Gold – was NIS
955 and is now NIS 692
Remy Martin XO was NIS 1,871
and is now NIS 1,142
(NIS 100 = USD 28 / EUR 22)
The thinking behind the change
in the alcohol excise regime was to tax products with a higher
alcohol content at higher rates; another reason was to limit
the “social damage” caused by alcohol - a reference to youth
Israeli media commented that for
those who can afford big name imports, boozing will become
less expensive, but for the poor guy, drinking arak “a
l’chaim” will be a thing of the past.
United Kingdom – SABMiller’s Graham Mackay receives GBP 14
million pay cheque
The convalescing former boss of
SABMiller, Graham Mackay, is one of the best-paid bosses in
Britain, UK media reported at the end of June 2013.
According to the company’s
annual report, Mr Mackay’s total remuneration reached GBP 13.9
million (USD 21 million) and included shares that vested under
long-term incentive plans. His total remuneration the previous
year was GBP 5.9 million (USD 8.9 million).
Mr Mackay, who served as CEO
for 13 years, was SABMiller’s Executive Chairman until April,
when the company announced that he had undergone surgery for a
brain tumour. Alan Clark, SABMiller’s former Chief Operating
Officer, took over from him.
Last year Mr Mackay was paid GBP 2.8
million in basic salary, benefits and annual cash bonus, less
than the GBP 3 million he was awarded for the previous 12
Sweden – SABMiller signs cooperation agreement with Kopparberg
If you don’t own one, buy one.
This seems to be SABMiller’s policy when it comes to cider
brands. In an effort to better compete against the popular
Swedish cider brand Rekorderlig in Australia, SABMiller and
the Swedish Kopparberg Brewery have entered into an agreement
for the long term licensing of Kopparberg cider products in
selected markets. The deal was announced on 18 June 2013.
As part of a broader deal with
SABMiller, Australia’s brewer CUB (owned by SABMiller) has
secured distribution of Kopparberg cider in Australia
effective from 1 October this year.
United Kingdom – Is it a beer? Is it a cider?
Cider may be a very lose
definition applying to all kinds of alcoholic beverages. But
it remains to be seen if it is as elastic to include Diageo’s
Jeremiah Weed brand, which was recently been rebranded as a
“Kentucky style cider brew”. What’s that? Exactly.
The Jeremiah Weed products have
been around for a while. There’s a Root Brew with a ginger
flavour and there’s a Sour Mash with a Bourbon flavour.
All of this sounds “beer-ish” and
“whiskey-ish” to me, although these drinks were touted at
their 2010 UK launch as “sweet tea-based liqueurs”. To make
matters even more confusing, these products are to be
considered ciders as of now because they are made from cider,
spirits and flavourings. However, according to UK media, the
liquid is the same despite the rebrand.
United Kingdom – Let there be beer
Faced with falling beer sales in UK
pubs, which were down by almost 50 million pints in the first
quarter of 2013, compared to the same period last year, the
UK’s major brewers decided to plough millions of pounds into a
joint TV campaign which was launched at the end of June 2013.
The 60 second TV ad “Let there
be beer” was first shown on 29 June 2013 and features people
on the verge of a nervous breakdown: a party organizer who
slaves away at the barbeque while his guests are frolicking
about in the sun; a young man who meets the doting father of
his beloved for the first time; and a woman who is inundated
with a literal mountain of work on a late Friday afternoon.
But just before their nerves snap, the tide turns for the
better - thanks to a well-deserved beer.
The TV ad is part of a bigger
campaign which is to run for three years and originated from a
meeting between the CEOs of AB-InBev, Heineken, Molson Coors,
Carlsberg and SABMiller 18 months ago in which they discussed
how to reignite the beer category in key markets such as the
UK. Read on
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