Posted November 2016
USA – AB-InBev buys craft brewer Karbach – its 9th in the US
It’s the second time this year that AB-InBev has bought a craft brewer. The latest is Karbach, which is located in Houston and was founded only five years ago. Terms of the deal, which was announced on 3 November 2016, were not disclosed.
Karbach is on track to make more than 90,000 hl beer this year. The AB-InBev investment will push Karbach’s annual capacity to 150,000 hl or more by 2019, the companies said. The immediate focus will be to continue spreading sales and distribution across Texas
The opportunity to expand Karbach’s reach is alluring as the craft brewer’s growth has all come from the Texas market. Its beers are not yet available beyond the state. Read on
Germany – Guy Hands checks into Warsteiner hotels
On 2 November 2016 the privately-owned Haus Cramer Group, which also owns the Warsteiner brewery, reported the disposal of 12 of its Welcome hotels division to Terra Firma, a private equity firm founded by Guy Hands in 2002. No financial details were disclosed. Mostly targeting business travellers, the Welcome hotels had a turnover of EUR 60 million (USD 67 million) and were slated for a sale in 2015, insiders say.
Terra Firma plans to use the Welcome Group as a platform for further hotel acquisitions in Germany, considering corporate travellers a lucrative and growing segment of the accommodation sector.
With a reputation preceding him like a thunderclap, Mr Hands is a private equity heavyweight, who brokered pioneering deals at investment bank Nomura, before setting up Terra Firma. Read on
Czech Republic – Budweiser’s chief Bocek retires
The sudden resignation of Budweiser Budvar’s long-time General Director Jiri Bocek in early November 2016 due to ill health poses a problem to Budvar’s owner, the Czech Ministry for Agriculture. It has to quickly find a successor to Mr Bocek, 59, who has headed Budweiser Budvar for 25 years and steered it through several battles with US brewer Anheuser-Busch and later AB-InBev.
Its most recent victory was scored in Portugal where a court upheld a previous ruling, prohibiting AB-InBev from selling beer under the Budweiser name. This was reported on 31 October 2016.
As could be expected, Mr Bocek’s departure led to renewed speculation whether the supporters of privatisation in government will take this opportunity and push for a sale of Budweiser Budvar. Read on
Australia – CUB may face beer shortage as dispute with union continues
Although the dispute between the company and the Electrical Trades Union (ETU) drags on, CUB has dismissed a statement from the ETU, which claims that the brewer will now struggle to meet Christmas and summer stock demands.
To date, the brewer has survived the five-month long industrial dispute at its Abbotsford brewery in Melbourne, which began under the previous SABMiller leadership and was inherited by the new owner AB-InBev, by transporting beer from its Yatala brewery in Queensland and sourcing warehoused stock.
However, it was reported on 4 November 2016 that leaked documents from CUB revealed that the brewer is fighting to meet demand, a situation said “to be due to low production rates, skill shortages and excessive financial and people costs”. Read on
USA – Molson Coors beer sales decline in third quarter 2016
Molson Coors, on 1 November 2016, reported a 6.9 percent drop in third quarter volume sales, as demand for its beers in Canada and Europe declined.
Net income was USD 202.5 million in the third quarter ended 30 September 2016. Net revenues were USD 947.6 million compared with USD 1.02 billion a year ago.
In October 2016 Molson Coors completed its transaction to buy SABMiller’s 58 percent stake in the MillerCoors venture, making it now the sole owner. Molson Coors did not consolidate MillerCoors’ full figures as the latest quarter ended before the transaction closed.
Belgium – The fight for shelf space heats up
Why would AB-InBev launch one Leffe spin-off after another, roll out zero alcohol beers and buy brands like Kwak and Ginette? The answer is: to claim more space on the beer shelf for its own brands.
Although AB-InBev earlier this year set itself the ambitious target of growing its lower and zero strength beers from a small base to 20 percent of its global volume sales by the end of 2025, the more immediate goal must be to get more brands onto an already crowed beer shelf, especially in Belgium.
On 25 October 2016, AB-InBev launched Jupiler 0.0, the alcohol-free version of the country’s biggest pils brand. Whether the weak Jupiler will sell huge volumes it not the issue, insiders say. Some other brand will have to budge.Read on
USA – AB-InBev buys homebrewers’ supply company
You don’t need to be paranoid to believe they are after you. This ancient bus-stop graffiti comes to mind when reviewing responses to AB-InBev’s latest US acquisition in the craft beer sector. In October 2016, ZX Ventures, the venture capital arm of AB-InBev acquired Northern Brewer Homebrew Supply and its sister company, Midwest Supplies. The two homebrewing companies generated combined annual sales of USD 50 million, according to Brewbound. No details of the transaction were disclosed.
According to the American Homebrewers Association, 815 homebrewing stores sold USD 764 million worth of beer-making supplies in 2015 to the country’s estimated 1.2 million homebrewers. They also say this is a conservative number because a lot of homebrewing equipment is now available at retailers other than specialty local homebrewing stores. Read on
Netherlands – Mr van Boxmeer to stay at the helm of Heineken
Leadership is also about continuity. Heineken said on 26 October 2016 that it would seek a fourth, four-year term for its CEO Jean-François van Boxmeer, who has led Heineken since 2005 and whose contract was to expire in 2017.
Although a reappointment for a fourth term is usually frowned upon by shareholders because of corporate governance concerns, for Heineken this decision is not illogical. Mrs de Carvalho-Heineken, who is the current head of the founding Heineken family, has long said that she wants Mr van Boxmeer to continue steering the brewer. Read on
Sweden – Craft brewer Oppigards opens new brewery
In the village they call the brewery the “beer church” and, by the looks of the building with its arched windows, villagers are not far off the mark. Nor when it comes to size. It’s the largest structure in the village of Ingvallsbenning (50 permanent residents) in central Sweden. No doubt, the delivery trucks will have a fun time reaching the brewery which is 8 km away from the nearest town (Hedemora) and about 180 km from Stockholm.
For the husband and wife team Björn and Silvia Falkeström, who started the business over a decade ago, there was never a question of moving the brewery elsewhere. For one, Mr Falkeström’s family has owned a farm in this village for 300 years, for another, their first brewery is only a stone’s throw away from the new one. Read on
Sweden – Government plans to raise excise on beer – again
On 1 January 2017, excise on beer could be hiked by 4 percent to reach USD 21.92 per hl. That’s among the highest duty loads in Europe. The association of Swedish craft breweries has voiced its objections to the excise increase, arguing that it will hamper their growth. There are currently nearly 250 small breweries in Sweden, most of them run by enthusiasts who already struggle with unpaid evening and weekend work. Read on
Belgium – AB-InBev needs SABMiller tonic
When releasing its third quarter 2016 results on 28 October 2016, AB-InBev not only reported a surprise drop in profits, but the world’s number one brewer also cut its revenue forecast for the full year, saying it no longer expects sales growth to beat inflation in 2016 because of declining volumes in Brazil. Brazil is AB-InBev’s second-largest market, where a drop in consumption was compounded by a decision to delay price increases into the fourth quarter.
Analysts and media hacks concurred that the weakness in Brazil and a flat US market highlight the brewer’s need for SABMiller’s markets with high growth potential. More than ever, AB-InBev will be relying on achieving the USD 1.4 billion of annual savings it has said it can get from taking over SABMiller. Read on
Australia – Ex-Foster’s CEO Trevor O’Hoy becomes chairman of Maggie Beer
So it’s beer again for Trevor O’Hoy, who resigned as CEO of Foster’s in 2008, after 33 years with CUB, thus taking responsibility for the brewer’s ill-fated foray into wine.
In October 2016 he was appointed Chairman of the iconic Barossa Valley food company Maggie Beer Products. Founded by Ms Beer, 71, who is Australia’s answer to Jamie Oliver in that she was a chef, a cookbook writer and TV personality (but no brewer), the gourmet food company is now entering a new growth phase and Ms Beer was looking for a chairman to maintain the health of the brand. Read on