Beer Monopoly





    International Reports











Ireland – Unresolved border issue spells trouble for Diageo post-Brexit

With Brexit negotiations to be resumed in December 2017, both the UK and the EU are accused of dragging their feet over an issue – an Irish border – which has emerged as the biggest hurdle.

Obviously, any sort of border between the Republic of Ireland and Northern Ireland, whether physical or regulatory, is politically impossible and publicly unpopular.

For the time being, the Republic of Ireland and Northern Ireland function like a single market. People and businesses are able to work across the entire island. Since cross-border trade is worth more than EUR 3 billion (USD 3.6 billion) per year by Irish government estimates, there’s an understandable desire to avoid disruptions. Also, 80 percent of Irish exports go to the UK and from there to other countries.

Both sides broadly agree that post-Brexit people and goods should be able to move seamlessly back and forth. But if the UK were to exit the EU in 2019 without a deal, police and customs controls would need to be introduced between the Republic and Northern Ireland immediately. Read on


Nigeria – AB-InBev to start brewing Budweiser in 2018

As Budweiser is the official sponsor of the next Football World Cup and Nigeria will take part in the tournament, AB-InBev will do the logical thing and start brewing the beer domestically as of 2018, it was reported on 23 November 2017.

What’s more, AB-InBev will complete the construction of its USD 250 million brewery in Sagamu near the capital Lagos next year. It will be AB-InBev’s fourth brewery in the country and its second largest in Africa. Read on


Scotland – Minimum price for alcohol ruled legal

Despite protests by the Scotch Whisky Association (SWA), the UK Supreme Court ruled on 15 November 2017 that Scotland can set a minimum price for alcohol. Legislation was approved by the Scottish Parliament in 2012 but has been tied up in court challenges. Read on


USA – Craft brewer sues supplier over allegedly contaminated yeast

Following an USD 2 million recall of its Milk Stout Nitro and IPAs last year, the Coloradoan craft brewer Left Hand Brewing is suing its yeast supplier, local media report. The lawsuit was filed in the Boulder District Court by Indian Peaks Brewing – which does business as Left Hand Brewing – on 14 November 2017 against White Labs.

Founded in 1993 in Longmont, a city 50 km northwest of Denver, Left Hand produced an estimated 90,000 hl beer in 2016.
Read on


United Kingdom – Wine to become more expensive

Wine lovers had better stock up on their favourite tipple quickly as a slump in Europe’s wine production this year will likely lead to higher prices. Making matters worse is the Brexit-related hangover, which has weakened the currency and pushed up prices.

As a result, the average price of a bottle of wine sold in the UK is now GBP 5.58 (USD 7.45), up 4 percent on 2016, The Guardian newspaper reported.

In 2017 global wine production is expected to fall to its lowest in more than 50 years, according to the International Organisation of Vine and Wine (OIV) because of extreme weather in Italy, France and Spain – the world’s top three producers. Total world output is projected to drop 8 percent from last year to about 247 million hl. Read on

USA – President Trump’s tax reform will also benefit brewers

On 16 November 2017, the House of Representatives passed its version of the “Tax Cuts and Jobs Act”. No Democrats voted in favour of the Republican bill, which – if passed – would mark the most significant overhaul of the federal tax code since 1986, it was reported.

Because of the difficulties of getting any type of bill through a deeply divided Congress, lots of other issues are included. Obviously, the larger the number of complex policies rolled into one big bill, the easier it is to get legislation passed without anyone noticing.

Media say the updated bill includes what is effectively a major new piece of alcohol legislation, cutting taxes on beer produced in the US – and especially on small breweries. Read on


China – Who will buy Asahi’s stake in Tsingtao?

It does not seem as if lots of potential buyers are queuing outside Asahi’s door. Although it has been an open secret for the better part of this year that Japanese brewer Asahi seeks to sell its 20 percent stake in Tsingtao, the number two brewer in the country, only two competitors have come forward so far: China Resources Beer, China’s number one brewer, and Carlsberg, which ranks fifth.

The reason for the cautious response is that being a minority shareholder in a state-backed brewer does not give you much of a say in the company. Read on


Brazil – Heineken and Coca-Cola distributors to enter into arbitration

Heineken and the Brazilian Coke distributors will begin arbitration in February 2018 regarding a distribution contract that the Dutch brewer decided to terminate as of 1 November 2017. The contract was to run until 2022, according to Brazilian media. Read on


United Kingdom – Beer industry seeks to grow exports

After Scotch Whisky and chocolate, beer is the largest food and drink export from the UK worth around GBP 600 million (USD 795 million) per year, the British Beer and Pub Association (BBPA) argues in a recent report. The sector has ambitious plans to grow exports further. The agreed target is to raise beer exports to GBP 700 million by 2022. Read on


United Kingdom – BrewDog to open its first BrewPub in London

Think of all the wonderful things you can do with money given freely. In October 2017 BrewDog launched its fifth round of crowdfunding. Since 2009, its previous four rounds have raised around GBP 41 million (USD 55 million), enlisting over 53,000 shareholders and making it one of the most successful investment crowdfunding offers of all time.

Equity for Punks V” seeks a minimum of GBP 10 million (USD 13 million) and GBP 50 million (USD 66 million) at the most. By mid-November 2017 about GBP 5 million had been raised. Read on


USA – Molson Coors reports revenue and profit slump in third quarter 2017

Craft beer, spirits and wine seem to have munched into Molson Coors business. During the third quarter 2017, net sales for Molson Coors Brewing fell 2.1 percent to USD 2.88 billion, compared to USD 2.94 billion in the same period last year, the company reported on 1 November 2017.

Income dropped 4 percent to USD 289.7 million versus USD 300.3 million a year earlier. In the July-to-September quarter, international net sales increased 96.7 percent to USD 65.7 million, while those in the US declined 5.5 percent to USD 1.89 billion, the company said. Read on


USA – Is marihuana the next craft?

Will brewers soon have to defend their share of throat against wine, spirits and pot? It seems likely. Already there is talk in the industry that legalized pot could become the new craft beer. Legalized marijuana is expected to be a USD 50 billion business by 2026, up from USD 6 billion in 2016.

Big Beer has been investing in up-and-coming craft breweries as their own iconic brands are struggling against a downward trend. Some hopeful analysts believe that weed could be the Big Brewers’ next big investment to keep up with trends. Read on


United Kingdom – Drink beer and save the climate

When it comes to politicising beer, BrewDog does not miss a beat. In time for the UN Climate Change Conference (6-17 November 2017) in the German city of Bonn, Scottish brewer BrewDog launched its latest protest beer, Make Earth Great Again – a beer it hopes will “shake the world by the shoulders” and remind leaders to prioritise climate change issues.

First compelled to brew the beer by America’s decision to withdraw from the Paris Accord, BrewDog’s limited release beer includes water sourced from melting Arctic ice caps, and ingredients including endangered Arctic cloudberries. The saison-style beer is fermented at a higher temperature, which is an appropriate nod at the effects of global warming. Read on


Canada – Molson Coors gets crafty to fight loss of market share

The consumer craze for craft beers continues to put pressure on the country’s major brewers. While beer consumption has stagnated for several years, the number of breweries has risen from 644 in 2015 to 775 in 2016. Over half of them are located in only two provinces: Ontario and Quebec.

The Six Pints ​​division, set up by Molson Coors to develop the specialty beer market, announced on 9 November 2017 that it has acquired the Quebec-based craft brewer Le Trou du diable (literally: the Devil’s Hole) in Shawinigan, about 160 km northeast of Montreal. Read on


USA – Boston Beer: when good is just not good enough

Boston Beer is doing what AB-InBev is best known for – slashing costs. However, shareholders aren’t feeling the buzz, even though the company’s third quarter (until the end of September) results beat Wall Street’s estimates.

The problem for the number two craft brewer is that the profit growth to USD 33.7 million, from USD 31.5 million in the same quarter last year, was driven by cost cuts, not by rising demand for products, which remains weak.

On 26 October 2017 the company reported a lower-than-expected net revenue of USD 247 million, down from USD 253 in the same quarter last year as its Sam Adams beers and Angry Orchard cider brands continue to struggle. Volume sales dropped 4 percent year-on-year. Read on


Nigeria – The curse of crude oil: drink more but cheaper

Africa’s number one oil producing nation, Nigeria, has seen its economy getting hammered by weak crude prices. The country’s brewers have been affected too.

The fall in the oil price from mid-2014 has weakened the naira and put a brake on household spending. Yet, local brewers have witnessed a paradoxical development. Rather than ditching beer purchases, Nigerians have kept on buying beer, driving consumption up to 17 million hl in 2016 from 15 million hl in 2012, according to Euromonitor. The market research firm forecasts that beer consumption could reach 20 million hl in 2020.

At the same time, however, brewers’ profits have tanked. Exotix, a Nigerian brokerage, estimates that Nigeria’s beer profit pool has shrunk to USD 271 million in 2016, down from a peak of USD 610 million in 2013. This phenomenon is known as consumers trading down. Read on


USA – Stone Brewing’s COO Pat Tiernan has left the company

After five years with Stone, its Chief Operating Officer, Pat Tiernan, resigned at the end of October 2017. Stone did not put out a statement indicating why he had left or who would replace him. Mr Tiernan had been with the company since September 2012 – a busy time for Stone as it built new breweries in Richmond, Virginia, and Berlin, Germany. Read on


Netherlands – Beer bikes banned

and about time too. A court in the liberal city of Amsterdam took a decidedly illiberal attitude to these “rolling taps” and banned them in early November 2017. Invented by two Dutchmen, these beer bikes are carts that have been modified with seats arranged around a bar table. Patrons power the bike as they pedal beside the city's famous canals, while drinking beer.

Seating up to over a dozen people, these bikes have become a pathetic sight in many cities, including Berlin. Clever businessmen market them as “sightseeing as you booze along”. Read on


Australia – Competition for craft brewers is neither fair nor open

For long craft brewers have complained that they cannot get access to taps as publicans prefer to contract them out to the country’s two big brewers – CUB (AB-InBev) and Lion (Kirin). Despite there being almost 400 craft brewers, Lion and CUB control more than 50 percent of the craft segment through brands like Little Creatures, James Squire and White Rabbit (Lion), as well as Matilda Bay Brewing, Wild Yak and Goose Island (CUB). Even Coca-Cola Amatil has moved into this space and so have the retailers. Read on


Ethiopia – Brewers chided for over-pricing

Ethiopia’s Trade Competition & Consumers Protection Authority has denounced the country’s brewers for over-pricing their products following the Birr devaluation. This was reported on 7 November 2017. The price of beer in rural areas started to increase after the Birr was devaluated 15 percent in early October 2017 to boost exports (eg coffee, oil seeds and flowers).

Local media say that Mikael Teklu, Director at the Authority, has sent a warning to every brewery in Ethiopia, with the exception of Dashen and Raya. Most likely these two breweries enjoy some political clout and had to be spared. The list of brewers that received the warning includes Diageo, Zebidar, Habesha, BGI (Castel) and Heineken. Read on


Germany – Power struggle at Oettinger brewery leads to board shake-up

The latest victims in the years-long quarrel among Oettinger’s three female owners are board members Dr Karl Liebl (Production) and Jörg Dierig (Sales and Distribution). Both were set free on 26 October 2017 despite protests from employees and Oettinger’s works council. Only Michael Mayer (Finance) has kept his position. Employees were informed of the changes through a statement on the company’s noticeboard (“Dismissal of Managing Directors Jörg Dierig and Dr. Karl Liebl“).

Oettinger brews Germany’s major beer brand – the eponymous Oettinger beer brand – which is no small achievement as its brands are predominantly positioned in the economy segment. Given Germany’s shrinking beer market and cut-throat price promotions among the leading brands standing at nearly 70 percent of sales volume, Oettinger must have increasingly felt squeezed from above. Its domestic volumes would have suffered (it does not disclose figures). But thanks to having branched out internationally through exports and licensing agreements in almost 90 countries, Oettinger already makes a third of its turnover outside Germany, according to insiders. Its total beer volumes must be about 9 million hl.

While many think that the recent board shake-up is part of a strategic turnaround, the fact that the dismissals only affected stalwarts loyal to Oettinger’s previous owner, the late Dirk Kollmar, it is to be feared that family quarrels are the real cause.
Read on

USA – Brewers Association makes ballsy bid to buy AB-InBev

This has the stuff of an award-winning PR campaign. It does not have any of that foam-at-the-mouth shrillness. It’s more tongue-in-cheek if anything. On 16 October 2017, the Brewers Association, the not-for-profit organisation that represents America’s 5,000+ small and independent brewers, announced the craft brewing community’s intent to “Take Craft Back” from the Big Brewers.

Over the past several years, Big Beer has been attempting to buy their way into the craft beer movement by acquiring small breweries at a rapid rate and using their acquisitions to invent craft brewing bona-fides. As AB-InBev represents the biggest of the Big Brewers, “Take Craft Back” aims to make AB-InBev’s shareholders an offer they cannot refuse.

The BA hopes to collect a cool USD 213 billion (you read correctly, billions not millions) towards that goal. The money is to be gathered via a crowdfunding campaign, the largest crowdfunding campaign in history. Read on


Australia – Coopers’ share buyback values brewer at AUD 436 million

Australia’s largest family-owned brewer, Coopers, has launched its biggest share buyback scheme in 10 years. The company’s share buyback is offering AUD 375 (USD 287) per share, which values the brewer at more than AUD 436 million (USD 334 million).

It is seeking to buy 93,066 shares for a total of AUD 35 million, which equates to 8 percent of the company. In this buyback scheme – the seventh arranged since 2006 – offers are being made to its 150 or so shareholders, each a direct descendant of founder Thomas Cooper. Read on


UK – England to get a Trappist brewery

Trappist monks at the Mount St Bernard Abbey in rural North West Leicestershire (that’s between Birmingham and Nottingham) have been given council approval to convert part of their 19th century Cistercian monastery into a fully operational brewery. England once boasted 54 Cistercian monasteries (called abbeys), but these were dissolved by Henry VIII in the late 1530s.

The Mount St Bernard monastery is the only one today and was the first Catholic abbey to be founded in England (in 1835) after the Reformation.

The development will enable the monastery to produce Trappist beer, the only product of its type within the UK, whilst continuing centuries of monastic brewing tradition. The brewery will replace an uneconomical dairy farm which has ceased operation.

All the profits from the brewery will go to the Trustees of Mount St Bernard, a charity that supports the monastery and the monks’ living expenses, thus ensuring that the monastery can continue to be self-sustaining, in accordance with the religious order’s tenets.

Although Trappist beers are held in high esteem by beer lovers, Trappist breweries are something of a rarity. Currently, there are only 11 active Trappist breweries. Because of their beers’ popularity, four new breweries have opened in the past five years, mostly in non-traditional Trappist brewing regions: one each in Austria, the US and Italy, as well as a second Trappist brewery in the Netherlands. All the other Trappist brewers are located in Belgium.

United Kingdom – Number of breweries and distilleries reaches new high

Research by the accountancy group UHY Hacker Young found there were 1,994 breweries in the UK at the end of 2016, up 18 percent from the 1,692 recorded at the end of 2015. This is the highest number since the 1930s.

The researchers suggested the craze for craft ale has boosted the number of microbreweries – the bulk of brewery start-ups – which have, in turn, benefited from a tax break in 2002, allowing brewers producing less than 5,000 hl beer to pay 50 percent less beer duty than their larger rivals. Read on


USA – Marijuana: Hesitant Molson Coors and brazen Constellation Brands

Is this the future? Constellation Brands, which sells Corona Extra beer in the US, is attempting to create cannabis-infused drinks, after the number three brewer in the US on 30 October 2017 reported it had acquired a 9.9 percent stake in the Canadian medical marijuana company Canopy Growth.

This move took many by surprise. The stake is worth about USD 191 million and Constellation will have the option of purchasing additional shares in the future. Founded in 2014, Canopy Growth is traded on the Toronto stock exchange and owns several brands.

Constellation, which is valued at USD 42 billion (compared with Heineken’s USD 57 billion), can certainly afford to splash out on speculative investments. It recently bought the craft brewer Funky Buddha in Florida. It also owns the craft brewer Ballast Point from San Diego. Read on


Denmark – Carlsberg reports sales and revenue decline in third quarter 2017

Danish brewer Carlsberg reported on 2 November 2017 that third-quarter sales (July through September) slipped more than expected, but it lifted its operating profit guidance for 2017. The company said that it expects organic operating profit growth of 7 to 8 percent in 2017, up from an earlier “mid-single-digit” percentage growth.

In the third quarter, Carlsberg’s net revenue declined 1 percent to DKK 16.7 billion (USD 2.62 billion) year-on-year, below the DKK 17.1 billion expected by analysts. Total volumes dropped 4 percent to 32.1 million hl in the quarter, in part due to cool weather in Europe. Read on


Netherlands – Heineken’s beer sales up in third quarter 2017

Heineken NV, the world’s number two brewer, reported a 2.5 percent increase in third-quarter beer sales to 60 million hl on 26 October 2017, with growth in all regions except Europe, where cool summer weather reduced demand, and in the United States.

The Dutch brewer said strong growth in the Asia Pacific region, outside China, led to a 12.2 percent increase in beer volumes, while strength in South Africa, Ethiopia and Russia led to an 8.8 percent rise in sales in its Africa, Middle East and Eastern Europe region. In Russia, volume was up double digit due to the strong performance of the Heineken brand and recent product launches in the economy segment, the company reported. Read on


Belgium – AB-InBev’s third quarter results disappoint analysts

The world’s number one brewer reported unsatisfactory third-quarter results with beer volumes dropping 1.2 percent to 161 million hl. Shareholders will take some comfort from management’s announcement that cost savings from the USD 104 billion SABMiller acquisition will be USD 400 million higher than the originally estimated USD 2.8 billion. The USD 3.2 billion savings will be delivered within the same four-year period, which is by October 2020.

Although AB-InBev’s profits (EBITDA) rose 13.8 percent in the third quarter to USD 5.73 billion and there was organic growth in revenues of 3.6 percent to USD 14.7 billion, analysts still complained that these positive results were not good enough.
Read on


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