Posted June 2008:
USA – It’s getting complicated
The next act in the takeover
battle of Anheuser-Busch has just begun. While SABMiller let it
be known that it has conducted informal talks with Grupo Modelo
and InBev as concerns a partial or complete acquisition of the
Mexican brewer, sources close to Anheuser-Busch said that the
American brewer is planning to reject InBev’s offer.
First it was InBev and
Anheuser-Busch. Now Grupo Modelo and SABMiller have entered into
the fray. Does anybody know what’s going on?
Until Wednesday 25 June 2008
most people believed that Grupo Modelo could be the stumbling
block to InBev’s attempt of taking over Anheuser-Busch for USD
46 billion in cash. The day before, on Tuesday 24 June 2008 it
was reported that the world’s largest brewer by volume,
SABMiller, had been in secret informal talks with both Grupo
Modelo and InBev to discuss whether Grupo Modelo was willing to
be bought out by SABMiller and at what price.
As if to diminish the impact
of such an unforeseen development, InBev on Wednesday 25 June
2008 sent another letter to Anheuser-Busch, reiterating its
offer, saying that InBev had already obtained committed
financing and has paid about USD 50 million in fees.
As we reported, purchasing the
remaining 49.8 percent of shares in Grupo Modelo that it does
not own yet, Anheuser-Busch could finally call the shots at
Grupo Modelo and fend off InBev’s unsolicited offer by making
itself prohibitively expensive.
This scenario has preoccupied
armchair strategists for weeks now – until information was
leaked to the press as concerns the contract between Grupo
Modelo and Anheuser-Busch. According to the Investment Agreement
as of 1993 when Anheuser-Busch first bought into Grupo Modelo,
both parties have the right of first refusal. That means: Should
SABMiller make Grupo Modelo an offer which Anheuser-Busch can
match, then Grupo Modelo will automatically go to
Anheuser-Busch. Whether Grupo Modelo likes it or not.
Therefore if SABMiller is
really serious about acquiring the Mexicans’ shares in Grupo
Modelo, it has to make a really extravagant offer. However, the
Mexicans’ share has already been valued as between USD 10
billion and USD 15 billion which equals ten to fifteen times
EBIT. In other words, Grupo Modelo will not come cheap.
That is the reason why an
offer by SABMiller for Grupo Modelo seems unlikely – unless the
South Africans hope that InBev will buy back its stake in Grupo
Modelo once the Brazilian-Belgian brewer has successfully taken
That’s a scheme with lots of
questions marks. Furthermore it implies that history will repeat
itself. In 2004 SABMiller and Anheuser-Busch were engaged in a
fierce takeover battle for control of the Chinese brewer Harbin.
In the end Anheuser-Busch obtained the majority of shares but
had to buy out SABMiller at a premium. For SABMiller this was a
good deal as it walked away from Harbin having pocketed a
risk-free USD 120 million.
The question that no one can
answer right now is: How will the Mexican shareholders of Grupo
Modelo decide? Do they want to sell or not?
Rationally speaking, the CEO
of Grupo Modelo, Carlos Fernandez, 41, has no reason to agree to
a sale. He would lose his job. It also seems that he has some
shareholders behind him who do not want to sell either.
A handful of Mexican families
control 45 percent of Grupo Modelo, a holding company. The
original Control Trust in 1993 had eight members, of whom four
are still alive. Their heirs, not having a vested or personal
interest in Grupo Modelo, were never admitted to the Control
Trust. Sources familiar with the situation say that there are
some 40 odd shareholders that each own between half and one
percent of Grupo Modelo. In effect these people sit on shares
worth between USD 50 million and USD 100 million. Would they
decline an offer by either Anheuser-Busch or SABMiller? Hardly
And the story continues
However, all the above was
idle speculation until yesterday. Today, on Thursday 26 June
2008 U.S. media report that Anheuser-Busch will reject InBev’s
offer as too low and plans to woo its shareholders with a
restructuring plan that entails the sale of the company's theme
park operations, layoffs, more than USD 500 million in
cost-cutting efforts and the sale of Anheuser-Busch's packaging
That’s what many observers had
been expecting. Given its company history, Anheuser-Busch is not
the acquisitive type. Put plainly: it is extremely cautious when
it comes to buying other companies. Anheuser-Busch’s
self-defence plan underlines this. Rather than go for Grupo
Modelo Anheuser-Busch hopes to pacify its shareholders with
Following InBev’s offer for
Anheuser-Busch launched two weeks ago, market observers have
been pondering that InBev, in order to finance the deal, would
have to sell off Anheuser-Busch’s non-core assets such as the
theme parks and the aluminium packaging unit. That’s exactly
what Anheuser-Busch is proposing to do now.
is only trying to buy itself some time. The interesting thing is
what happens next.
And that is: Will InBev take
its offer directly to Anheuser-Busch’s shareholders? Will InBev
attempt a hostile takeover? Consensus view among the people in
the know is: YES! Obviously, InBev has yet to announce such a
To win over Anheuser-Busch’s
shareholders, InBev may have to raise its offer by more than USD
3 billion, to around USD 70 per share from its current offer of
USD 65 per share, though.
Posted 26 June 2008
USA – Chances aren't bad that Anheuser-Busch could be sold
Things are finally moving on. Although the Board
of Anheuser-Busch at its Friday 20 June 2008 meeting did not
come out in favour of selling the largest brewer in the U.S. to
InBev, it did not rule out a sale either. Which can only mean
one thing: The Board wants to drive up the price and see how
much InBev is willing to fork out for Anheuser-Busch before it
commits itself, one way or another.
At present no one knows how InBev's takeover
attempt is going to end. One thing is certain, however: InBev's
spin doctors are doing a great job at keeping the rumour mill
going. Contrary to apprearances, nothing has happened since
InBev launched its USD 47 billion offer for Anheuser-Busch two
weeks ago, ... except that Anheuser-Busch has finally gotten
down to studying the offer in earnest and in detail. That is
in fact some achievement after 18 months of just talking.
You would not believe it. Last week, InBev's CEO
travelled to Washington on a charm offensive and what happened?
He received the proverbial slap in the face by Missouri's
Senator, a woman called Claire McCaskill. Missouri is
Anheuser-Busch's home state, which is what got Ms McCaskill
involved in the first place. Playing the patriotic card – it's
election time after all – she urged Anheuser-Busch's Board to
reject InBev's offer. About the same time, the world's richest
man, Warren Buffett, who also happens to be Anheuser-Busch's
second most important shareholder with about 5 percent of
Anheuser-Busch's shares, let it be known that he urges the Board
to consider the USD 65 per share offer favourably. The first
news the international media picked up more than willingly, the
second one less so. Now which news is more important? The second
U.S. politicians may pander to Joe Six Pack's
xenophobia, yet in the end it is people like Warren Buffett, for
whom money has no passport, who decide if Anheuser-Busch is soon
to be run from a small place in Belgium called Leuven.
As things stands, many investors do not seem
disinclined to selling their shares to InBev. That's how the
U.S. media have interpreted a letter by Adolphus Busch which was
leaked last week and supposedly said that chances for a sale are
better than 50:50. What adds an extra bit of spice to his claim
is that he happens to be a shareholder and the current CEO's
uncle. Both August Busch IV and his father and predecessor
August Busch III are against a sale of Anheuser-Busch. If the
Board is really open-minded about a sale this means that August
Busch IV is in a minority position.
Another detail that speaks in favour of a sale is
that Carlos Fernandez, the CEO of Grupo Modelo resigned from
Anheuser-Busch's Board only hours before the meeting last week.
Anheuser-Busch controls 50 percent of Mexico's major brewer
Grupo Modelo (Corona Extra). That's why Mr Fernandez has sat on
Anheuser-Busch's Board since the mid-1990s. To avoid a conflict
of interests, Mr Fernandez decided to step down.
It was reported widely that Grupo Modelo could
become a potential spoiler in InBev's takeover of
Anheuser-Busch, provided the Mexicans agree to sell the rest of
their shares to the Americans. That would add an extra USD 10
billion to USD 15 billion to Anheuser-Busch's current price and
might make the brewer too big to stomach for InBev. We at
Brauwelt do not think such a scenario very likely. After all,
for the better part of 20 years the Mexicans have thwarted all
of Anheuser-Busch's atempts to gain control of Grupo Modelo. So
why should they help Anheuser-Busch out of a spot of bother now?
With Mr Fernandez gone, it's now up to the 13
members of Anheuser-Busch's Board to decide on the brewer's
future. Yet, it's anybody's guess when they will finally
announce their decision.
So far the international media have only focused
on the financial and political implications of a takeover.
Apparently the U.S. Presidential election campaign is big on
That must be the reason why no one seems willing
to pursue InBev's statement that it plans to take the Budweiser
brand truly global should its takeover of Anheuser-Busch prove
InBev's intentions make sense – if your memory is
that of a goldfish. A few years ago the same company announced
that it would take Brahma (out of AmBev's stable of brands)
global. After several presumably costly yet unsuccessful
campaigns the brand has been relegated to regional status.
Moreover, there is a trifle matter to content
with – namely the trademark dispute between Anheuser-Busch and
the state-owned Czech brewery Budweiser Buvar over the rights to
the Budweiser name.
Lyle Frink reports from Prague that the Czechs
have slowly woken up to the fact that InBev's acquisition of the
American Anheuser-Busch could have serious implications for the
last of the country's “family silver”: Budweiser Budvar. The
consensus opinion is that an InBev victory would trash the value
of Budweiser Budvar, slated for privatisation in the
The major asset of Budweiser Budvar is its claim
to the Budweiser name – and its ability to largely shut
Anheuser-Busch out of the European market.
It is widely believed that Anheuser-Busch would
be a potential buyer of Budweiser Budvar when it comes on the
market, thus ending the trademark dispute. Only the Americans
might be willing to pay a strategic (read inflated) price for
what is basically a medium-sized Czech brewery with some export
If InBev wins, there dies Anheuser-Busch's dream
of making its Budweiser a truly global brand. Also the inflated
value of the Budvar brewery would come hissing down to the
levels expected of a niche brewery.
Of course, InBev could decide to bargain for
Budweiser Budvar. But why on earth should they want to do that?
To be able to sell the American Budweiser in all markets on
earth? Does anybody in their right mind really believe that
InBev would spend millions of Euros for what is only a matter of
pride? When they already have a huge portfolio of brands? No.
And nor do the Czech. For once the Czechs and Anheuser-Busch's
wills seem to coincide. Mark this day.
Posted 23 June 2008
Belgium – InBev makes USD
65 per share offer for Anheuser-Busch
On 11 June 2008 InBev made an
unsolicited USD 46 billon offer for the American King of Beers.
The response from St. Louis? Anheuser-Busch’s board promised
they would look at it.
After weeks and weeks of
rumour mongering, InBev yesterday came out with an offer to
acquire all outstanding common shares of Anheuser-Busch for USD
65 per share in cash.
Being paid in cash could prove
attractive to shareholders, who receive an immediate premium of
35 percent over Anheuser-Busch’s 30-day average share price
prior to recent market speculation, and an 18 percent premium
over Anheuser-Busch’s previous all-time high of USD 54.97 as of
Circulating rumours rather
than fact was a shrewd move by InBev to force Anheuser-Busch
back to the negotiating table. It was leaked recently that the
two companies have been in secret talks for 18 months over a
deal but to little success, it seems. To InBev’s chagrin,
Anheuser-Busch does not want to be bought out.
Whatever InBev’s initial time
frame was for the deal, it had to make its offer public now
before the U.S. presidential campaign gets any more agitated.
Otherwise the Brazilian-run InBev could find itself at the
receiving end of a patriotic outcry. To most people between New
York and Los Angeles, Budweiser is as American as apply pie.
The Anheuser-Busch deal lacks
in obvious synergies. It is highly revealing that InBev does not
make an explicit mention of synergies in the offer, which
indicates that it is after size – getting back to the top slot
in the brewers’ global ranking - and marketing expertise. On
both accounts Anheuser-Busch scores highly. Whether these two
reasons alone warrant the expense of USD 46 billion – that’s for
the financial markets to decide.
Speaking of geography,
Anheuser Busch is the perfect vehicle for InBev to extend its
presence in the USD 90 billion-U.S. beer market where the two
companies already have a distribution agreement. Lacking major
overlaps, InBev should not have any problems getting the deal
waved through by the U.S. antitrust authorities.
In addition, the deal would
allow InBev to combine its Chinese operations with those of
Anheuser-Busch, thus competing more effectively with SABMiller’s
joint venture in China, CRE Snow.
InBev’s lawyers have been most
courteous and careful in the wording of the offer to avoid
giving away any indication that InBev is prepared to go hostile
should the need arise.
The offer is called a
“proposal”. InBev wants to “engage in a dialogue” with
Anheuser-Busch leading to “consummating a friendly combination”
– which all makes it sound as if Anheuser-Busch’s board has any
options of turning down the offer.
Further, InBev “envisions
making St. Louis the headquarters for the North American region
and the global home of the flagship Budweiser brand.” To flatter
the Americans, InBev has even proposed to re-name the combined
company in order to evoke Anheuser-Busch’s heritage.
Hoping to avoid a brain drain,
InBev said it would invite a number of Anheuser-Busch’s
directors to join the board of the combined company and would
seek to retain key members of Anheuser-Busch’s management team
across the organisation.
Last but not least, InBev
promised it would keep all of Anheuser-Busch’s 12 U.S. breweries
The combination of
Anheuser-Busch and InBev would create the global leader in the
beer industry and one of the world’s top five consumer products
companies, says InBev. On a pro-forma basis for 2007, the
combined company would generate global beer volumes of 460
million hl, net sales of USD 36.4 billion, and EBITDA of USD
Together they would control 25
percent of the world’s beer output. If you were to add the
volume brewed by the – then – number two, SABMiller, their
combined volume would amount to more than a third of global
production. Compare that to last year, when the big five brewers
had 43 percent of global market share and you can see that the
consolidation of the brewing industry has entered another stage.
InBev admitted that the brewer
would burden itself with more than USD 40 billion in debt
because of the deal. Observers have already mused how InBev was
going to recoup some of its expenses. Obvious assets to sell are
Anheuser-Busch’s theme parks and canning companies.
What may have instilled InBev
with a sense of urgency and compelled it to come forward with
its offer for Anheuser-Busch now is that on Friday, 6 June 2008,
SABMiller and the Molson Coors Brewing Company announced that
they have been informed by the Antitrust Division of the U.S.
Department of Justice (DOJ) that the DOJ has no objections to
their joint venture in the U.S.
The MillerCoors joint venture,
which is to give the two brewers a combined 30 percent share of
the U.S. beer market, will generate USD 500 million in annual
cost synergies, it was reported – and possibly create a player
in the U.S. beer market who will be up to the task of
Posted 12 June 2008
USA – Who will buy Anheuser-Busch?
For a few weeks now the
world’s financial centres have been abuzz with a possible USD 45
billion bid by InBev for Anheuser-Busch.
I do feel sorry for
Anheuser-Busch. Honestly. I mean their top brass often lacked
dress sense and manners but to have all the world talk about
Anheuser-Busch being taken over by some upstart “machete
wielding Brazilian investment bankers” (not my description but a
U.S. colleague’s), that’s unfair. However, the world has never
been good or just. And in this case, the fault is all
Anheuser-Busch’s. While Heineken, Interbrew and SAB went
international in the 1990s, investing in emerging markets, where
the risks were high but the potential profits even higher,
Anheuser-Busch decided to play it safe. Their expansion policy
was cautious. Overly-cautious, in retrospect. Because where is
Anheuser-Busch today? In the U.S., … the U.S., … the U.S., … a
bit in China, a bit more in Mexico. Err, that about sums it up,
doesn’t it? Trouble is, the U.S. beer market is basically flat,
the U.S. dollar is weak and Anheuser-Busch’s shareholders
displeased. To put it bluntly: right now Anheuser-Busch is a
What has Anheuser-Busch to
offer? Quite a lot still. It is the undisputed number one in the
U.S., the world’s most profitable beer market in absolute terms,
and it has a 50 percent stake in Mexico’s Grupo Modelo. Sorry,
readers, I have to bring this in because the potential offer by
InBev has implications that do not immediately meet the eye of
the armchair beer strategist.
Modelo is doing ok (EBITDA 30
percent) yet could be doing much better (50 percent EBITDA) if
it were run better. The Mexicans have so far been able to resist
Anheuser-Busch from micro-managing them as they have been able
to resist Anheuser-Busch from wholly owning them. Thanks to a
complex voting block agreement on their board, no Mexican
shareholder has been able to sell his shares to Anheuser-Busch –
something Anheuser-Busch has been waiting for patiently for 14
years ever since they made their first offer for a stake in
Modelo. It is somewhat macabre to mention it but Modelo’s future
hinges on the life of a 90 year old board member, who exercises
total control over the other Mexican board members. From what
one hears, some Mexican board members would rather sell to
Anheuser-Busch today than tomorrow. Alas, they are prevented
from doing so. Now, Anheuser-Busch has known as well as InBev
about the other half of Modelo coming up for sale if that
particular board member decides to … let’s say quit. If
Anheuser-Busch played their cards well they could buy the rest
of Modelo and become so expensive themselves that no one could
take them over. At least, a combined Anheuser-Busch-Modelo would
be a very big company to swallow for a competitor.
That’s what InBev knows too
and that may be one of the reasons why the Brazilians have
decided that if they want to buy Anheuser-Busch they have to do
it now before Anheuser-Busch has a chance to move in on Modelo.
But there are other considerations to bear in mind too. InBev
may be a big company whose management has been good at
deal-making and cost-cutting but they have not exactly been
covering themselves with glory when it comes to selling beer and
marketing beer brands. Think of the Stella Artois disaster in
the UK, or what’s become of Beck’s and the other brands they
have gobbled up on their purchasing spree.
InBev needs a deal and it
needs marketing talent - talent that Anheuser-Busch have.
Anheuser-Busch’s people have for a long time proven themselves
as very capable beer marketers. Even if InBev, post a takeover,
would throw out a lot of Anheuser-Busch’s workforce they would
try to make an effort to keep a certain amount of talent.
What can Anheuser-Busch do at
this stage? Nothing, really. The current Busch heading
Anheuser-Busch, August Busch IV and his father August Busch III
together owned only 1.7 percent of the company's common stock as
of 31 January 2008. Directors and executive officers owned 4.5
percent of the company. Needless to say that both August Busch
III and IV oppose a deal. However, Adolphus Busch, a
half-brother of the chief executive, recently expressed the
opinion that if a good deal is ever put on the table, it should
be considered. Such a rift in the founding family is what you
get if, as a chief executive, you are more concerned with
corporate patriotism and family pride than with raising
So far InBev has not made an
official offer so it does make any difference if they will
eventually have to pay USD 45 billion or USD 50 billion.
Obviously, most people in the financial world seem to believe
that InBev will be able to secure financing for that sort of
deal. Looks like Anheuser-Busch’s fate is sealed.
Azerbaijan – Baltika buys Baku-Castel
Too late. Although Efes CEO
Alejandro Jimenez made some ominous remarks at the Canadean
Madrid conference in April that Efes was planning further
acquisitions in the former Soviet Union states, Efes was beaten
to the pole by its Russian rival Baltika when it came to
clinching a deal with the French-owned Baku-Castel brewery in
On 15 May 2008 Baltika signed
a contract with Brasseries Internationales Holdings (Eastern), a
holding company of Groupe Castel, to purchase the Baku-Castel
brewery for an undisclosed sum. The deal, which still requires
approval from the anti-monopoly authorities of Azerbaijan, was
made in a bid to develop Baltika’s business in the country.
Until today, Baltika beer has
to be imported into Azerbaijan. Baltika claims it has a 3.5
percent share of the local beer market in Azerbaijan and that is
the leader of imported beer segment. Brauwelt has no idea how
much beer is actually consumed in Azerbaijan. But since Efes
some years back claimed it was selling about 30,000 hl there –
which is about 10 percent of total consumption – Baltika cannot
possible be the market leader with such a small market share.
Be it as it may, Baltika has
grand plans for Baku-Castel, a brewery which was bought by the
French Castel group in 2000. Around the same time Castel also
bought breweries in neighbouring Georgia and Armenia, hoping to
implement his well-proven African business model of running a
quasi beer monopoly in the Caucasian region. Somehow Castel’s
fortunes in the other two countries were mixed. Only
Azerbaijan’s Baku-Castel has thrived over the years. This year
the country’s sole brewer expects to produce about 300,000 hl.
It is yet unclear if Baku-Castel
has pursued an exit strategy right from the start or whether the
octogenarian Pierre Castel has decided to concentrate his
efforts elsewhere. Brasseries Internationales Holding Ltd., a
subsidiary of Groupe Castel, is a holding company and by its own
account primarily engages in distribution of wine in Armenia,
Azerbaijan, Georgia, and Russia. The company is based in
Gibraltar. Over the years Brasseries Internationales Holding has
had the European Bank for Reconstruction as a minority
shareholder and since 2006 the Citigroup Venture Capital
International as its majority shareholder. The CEO of Brasseries
Internationales Holding is Jean Paul Lanfranchi, a confident of
According to Russian media
sources, Baltika plans to invest USD 20 million
"We were led to the decision
to make this purchase by an optimistic estimate of the prospects
for developing the market in Azerbaijan, by the favourable
investment climate and the strong position of the Baku brewery
and its brands on the market," said president of Baltika Anton
Artemiev. The annual rate of growth of the beer market in
Azerbaijan in the coming three years is 12 percent to 14
percent, Baltika forecasted. The company not only has plans to
start producing its own brands there in time for the 2009
season, it also wants to bring production up to one million hl
according to people familiar with the situation.
How they plan on achieving
this feat remains a puzzle unless Baltika intends to send a lot
of expats down to Baku. Azerbaijan may be oil rich but oil
riches often prove more a curse than a blessing. There is no
industry to speak of in Azerbaijan apart from oil. Unemployment
is high. Hence the country suffers from an extreme shortage of
talent. Skilled Azeris either work in the oil industry, in
import-export or leave the country altogether in search of a
better future. People who have worked in the brewing industry
and might be susceptible to an offer from Baltika just do not
Moreover, Baltika’s people may
be in for a culture shock because Baku-Castel is still a
smallish set-up compared to what they are familiar with. Also
Baltika in the past has adopted a policy of hiring talent from
other industries. Their inexperience with matters beer and
brewing may prove beneficial to a large bureaucratic entity such
as Baltika. But to run a real brewers’ brewery like Baku-Castel
which was as lean as it can be – that’s another issue
Baltika brewery, which is 85.6
percent owned by Baltic Beverages Holding (which in turn is now
100 percent owned by Carlsberg) is a leader on the Russian beer
market accounting for over 37 percent of the country's beer
output. It is also one of the leading European beer producers.
The company owns 11 breweries in Russia and also holds licenses
to produce French Kronenbourg 1664 beer, Danish Tuborg and
Carlsberg and Australian Foster's. In the past, its
international expansion has been through Baltic Beverages
Holding. Purchasing a brewery abroad is a first for Baltika. "Baltika
has set up the production of licensed brands at its own
breweries and has arranged for licensed production of its brands
in Ukraine and in Great Britain. Now we will add to this
experience practice in managing production abroad," said Mr
Belarus - Heineken acquires Rechitsa
brewery in Belarus
You would have thought that
most Belarusians drive taxis in New York. But no. They are back
home drinking beer brewed by Heineken. Read
Brazil – What’s Schincariol up to?
In May, Schincartiol agreed to
buy the Cintra brands that market leader AmBev had been forced
to divest following a competition authority ruling. Read
Ireland - Diageo does NOT do the
… namely cease production at
its St. James’ Gate brewery in Dublin. However, it will lay off
more than half of its brewery workers, close two breweries and
shift most production to a new, high-tech plant in the Dublin
suburbs by 2013. Read
USA – Tiny glass splinters, big expensive
Following April’s recall of
defective 12 ounce beer bottles, Boston Beer, the brewer of
Samuel Adams, reported a net loss of more than three million
dollars during the first quarter.
USA - Summer’s here. Bud Light Lime’s the
Anheuser-Busch scored a
surprise success with the launch of its Buds Light Lime, a beer
that is to compete directly with Miller Chill and Corona
Despite a so-so response to
its last Budweiser extension, Budweiser Select, Anheuser-Busch
has launching another, called Bud Light Lime, for which it has
earmarked a USD 35 million ad budget. At the Beverage Forum held
in New York City in May, David Peacock, Vice-President Marketing
at Anheuser-Busch called the product “a beer with a little lime”
and justified the launch by saying that the flavoured beer
segment in the U.S. grew 7 percent in 2007.
Last year SABMiller launched
Miller Chill, a light beer brewed with lime and salt, which sold
more than half a million barrels (600,000 hl) during its first
year, says SABMiller.
Although Mr Peacock would not
say how much volume Anheuser-Busch has been selling of the
product since its introduction during the first week of May, a
flip comment by Jim Koch says it all. Mr Koch commented: “It
took me more than twenty years to grow Samuel Adams from
invisible to infinitesimal. And they are doing more in just a
month!” Samuel Adams’ current 0.8 percent share of the U.S. beer
market warranted a lifetime-achievement award by the Beverage
Marketing Corporation, the organisers of the Beverage Forum.
In 2007 Boston Beer sold 1.80
million barrels or 2.1 million hl beer.
USA - Molson Coors donates beer fuel to
The search for alternative
fuels is taking a crazy turn. Molson Coors is donating fuel made
mostly out of beer waste to the Democratic National Convention
to be held in Denver from 25 to 28 August at the Pepsi Center.
United Kingdom – No more drinking in
public on London’s Underground
An alcohol ban on London's
transport network sparked a party on the Tube that got out of
France - Heineken announces reorganisation
Heineken plans to close one
brewery and sell another one in France in order to cut costs.
Perhaps it was not meant as a
joke although everybody laughed. At the Canadean Madrid
conference in April a delegate asked Alex Myers, Senior Vice
President Western Europe of Carlsberg why he had taken on the
Kronenbourg business of Scottish & Newcastle, insinuating that
France was not a very profitable or easy market. Mr Myers said
something to the effect that Kronenbourg was a great brand.
However, most delegates would remember that earlier in April
Scottish & Newcastle's
French brewery Brasseries Kronenbourg sold its distributor
subsidiary company Elidis to C10, an independent distributor,
for EUR 108 million. Scottish & Newcastle had
announced its intention to sell Elidis to C10 in November last
year. Based in Strasbourg, Elidis, with its 1,600 staff, sells
beverages to cafés, hotels and restaurants. The company has 59
warehouses across France and saw its 2007 turnover amount to EUR
380 million. However, Scottish & Newcastle estimated Elidis’
financial losses for 2007 at EUR 1 million and was happy to see
That may serve as a background
to Heineken’s May announcement to reorganise its French
production units “in order to drive efficiency improvements”.
Well, we know what that means.
Heineken said that it would
close the Brasserie Fischer in Schiltigheim by the end of 2009
and transfer its production to the l'Espérance brewery in
Schiltigheim. In addition it would sell the Saint Omer brewery,
the production site of Heineken’s non-branded beer business. It
is expected that the total reorganisation will lead to 126 job
losses in Alsace and 62 in Mons-en-Baroeul by the end of 2010.
At the same time Heineken said
it will invest EUR 124 million over the next three years to
upgrade its three remaining breweries in Mons-en-Baroeul (North
of France), Schiltigheim (Alsace) and Marseille. Their combined
capacity is over 6 million hl.
The exceptional restructuring
costs associated to the reorganization will be charged to the
2008 and 2009 consolidated profit and loss accounts and will be
recovered in 3 years after completion of the programme. For
2008, these restructuring costs are included in the F2F
programme. For 2009, Heineken forecasts additional assets
write-off of approximately EUR 20 million, which will be treated
as exceptional items.
In its statement, Heineken
would not be explicit on the sale of its Saint Omer brewery
other than saying that there were talks with its former owner
and current chairman, while the French media already reported on
31 May that André Pecqueur had agreed to buy back the brewery
for an undisclosed sum. Only 12 years ago Mr Pecqueur and his
brother had sold the Saint Omer brewery to Heineken because they
thought that as a private company they could not survive in the
French beer market. The Saint Omer brewery, popular with “booze
cruise” tourists from Britain because it is located close to
Calais, produces 1.8 million hl beer, 90 percent of which are
distributor own brands (DOB). That’s a segment of the French
market that has been growing over the years.
Unfortunately, there is not
enough money to be made in the DOB business for the likes of
Heineken. As Heineken wants to concentrate on its premium brands
Heineken, Pelforth and Desperados in France, the Dutch brewer
was glad it found Mr Pecqueur, at 65 years of age not exactly a
hotspur, willing to take back his former brewery.
In France Heineken has a
market share of about 30 percent. Brasseries Kronenbourg
controlled 36 percent in 2007.
Denmark – Carlsberg expected to close
breweries in Europe
At Carlsberg they are taking
their own sweet time. Although they announced massive brewery
closures in 2005 already, nothing drastic happened. Now
Carlsberg’s top brass seems to be investigating the issue
Switzerland – Competition authority to
probe into Heineken-Eichhof deal
Fearing an unhealthy duopoly,
the Swiss competition authority could take up to four months to
investigate the takeover of the Eichhof brewery by Heineken
which would give the Dutch brewer a 29 percent share of the 4.3
million hl beer market.
United Kingdom – It’s all about money
In a recent interview with the
English newspaper The Telegraph, SABMiller’s CEO Graham Mackay
was his usual bullish self and called a spade a spade and a beer
a beer. Read
Germany – Radeberger considers closing its
Radeberger, Germany’s largest
privately owned brewing group with 15 breweries in Germany, is
building a EUR 20 million brewery in Nuremberg/Fürth. Meanwhile
the Frankfurt brewery site is threatened with closure. Read
december 08 ·
· october 08··
· july 08
· may 08