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Posted October 2013

UK – Cheap and cheerful Strongbow cider

Why would Heineken sell their Strongbow cider in 2 litre plastic bottles? Is this a desperate measure to maintain volumes of one of the UK’s most popular cider brands, or is it just me failing to see the logic of this? While it’s not as bad as selling beer in large plastic bottles, Heineken’s move certainly carries the risk of downmarketing the brand’s image. What is more, have they forgotten that there is some stigma attached to drinking cider out of plastic bottles (remember youngsters at the park getting drunk on the stuff)?

This is not the first time Heineken have tinkered with the brand, which fell into their lap when they bought the UK’s brewer Scottish & Newcastle in 2008. Already last year, they lowered Strongbow’s alcohol content from 5.3 percent ABV to 5.0 percent ABV.

At the time, they argued that this was a conscientious move to protect consumers from themselves, as any alcoholic product with more than 5 percent ABV was beyond the threshold level for many drinkers who want to stay in control.

However, consumers were not convinced. Many commented that the product’s quality has suffered because of the lower alcohol content.

At least, Heineken must be making a nice profit from Strongbow because the reduction in alcohol was widely regarded as a blatant move to save on alcohol duty.

Despite the cheap and cheerful plastic packaging, it seems that so far Heineken are keeping the price of this product up. Read on


 

Ireland – Diageo faces backlash over Arthur’s Day celebrations

Since when have the Irish become such morose whinge-pots? Even before Diageo, the owner of Guinness, invited punters to be in a bar by 5:59 pm on 26 September to raise a glass to Arthur — that’s Arthur Guinness, the brewery’s founder – a growing chorus of critics has called the festivities, which bring together three celebrated strands of Irish culture, namely Guinness, the pub and music, a “national embarrassment”. They argue that it is merely a PR stunt, aimed at promoting the company’s brands, and that there is nothing to celebrate in binge drinking.

Arthur’s Day was first launched in 2009 when Guinness celebrated the 250th anniversary of the drink that made Ireland famous. This year, over 1,000 musicians were scheduled to perform at 500 locations across Ireland, with smaller events taking place in many other countries, including Malaysia, Spain, Singapore, Italy, Indonesia, Germany and the United Arab Emirates.

The very vocal backlash seems to have taken Diageo by surprise. While advocates of personal responsibility noted that Diageo is not forcing Guinness down anyone’s throat, Diageo felt compelled to bow to social pressure. The company promised to send its European corporate relations director to an accident and emergency ward, to witness the fallout. They also said they would continue to sponsor the event as long as the public backed it.

And that may be the rub. With the event having generated huge debate this year in mainstream and social media, some commentators have begun to wonder if the publicity-attuned Diageo may ultimately decide that the hangover simply is not worth it,” the New York Times wrote.

I find this whole debate in Ireland most strange. In Munich we have the Oktoberfest, a 16 day party of beer, food and music. As a festival it continues to go from strength to strength, despite the fact that hundreds of people amongst the six million visitors end up extremely intoxicated and need to spend some time at the sobering-up marquees specifically set up for those unable to stagger back home. Although I, for many years, used to be a personal victim of the Oktoberfest’s “fallout” because my office was right next to the Oktoberfest grounds and every day on my way to my car I would have to wade through puddles of puke or step over drunken people sleeping it off, I would not have dreamt of calling for a ban or organising a “Stop-the-Oktoberfest” campaign.

I hope that Diageo have the courage to continue with their Arthur’s Day celebrations. Because it’s your personal responsibility and not the festival’s organiser’s how much drink you can handle.

 

Belgium – Beer Temple to open in 2018

Grand Place, Manneken Pis and the Atomium – come 2018 and Brussels will boast another atraction: The Belgian Beer Temple. Launched by the City of Brussels, the Brussels Capital Region and the Federation of Belgian Brewers, and housed in the former Brussels Stock Exchange, the Belgian Beer Temple will be a visitor experience that is built on a grand scale to highlight all aspects of Belgian beer culture.

If all goes according to plan, in five years’ time the Belgian brewers will finally have their own showcase to rival the Guinness Storehouse in Dublin, the Heineken Experience in Amsterdam and the Scotch Whisky Experience in Edinburgh. Just a five-minute walk away from the Grand Place, visitors to the Belgian Beer Temple will be able to immerse themselves in this country’s love affair with its diverse beer styles. Read on

 

Australia – Treasury Wine Estates CEO ousted

They don’t mince words down under. “The decision to pour AUD 35 million of wine down the sink was the catalyst for David Dearie's career at Treasury Wine Estates (TWE) also going down the gurgler,” Australian media commented when TWE announced on 23 September that its CEO was to leave with immediate effect.

TWE, which used to be the Foster’s wine unit until it was spun off in 2011 and now calls itself the world's largest pure-play wine company with over 80 brands including Beringer, Lindemans, Penfolds, Rosemount Estates and Wolf Blass, announced in July that it would destroy excess stock and make a total of AUD 160 million (USD 150 million) worth of provisions related to its U.S. operations. As if this was not bad enough, it kept on sending out bad news when in August it reported a 50 percent slump in annual net profits.

These losses sealed Mr Dearie’s fate. Read on
 

South Africa –UNB accuses SABMiller of predatory pricing

Is SABMiller using its dominant position in South Africa to squeeze a local competitor out of the market? In September 2013, United National Breweries (UNB), which has just completed a transaction in which global drinks group Diageo acquired a 50 percent stake from India’s Vijay Mallya, lodged a complaint against SABMiller with South Africa’s Competition Commission, alleging that SABMiller is engaging in predatory pricing and “springboarding” to restrict sales of UNB’s Chibuku sorghum beer.

The complaint appears to stem from SABMiller’s initiatives to flood the northern part of South Africa with sorghum beer produced in neighbouring Botswana. In South Africa, the sorghum beer market is dominated by UNB with the Chibuku brand.

In Botswana, SABMiller recently established a company, Alliance Beverages, to facilitate exports of traditional opaque beer from its Botswana breweries into South Africa. Read on

 

Venezuela - Blame it on the economy

Have those drop-dead-gorgeous chicas that dominate Venezuelan beer marketing lost their ability to make men salivate for a beer? During 2012, beer production was flat over 2011 at 21.6 million hl, while per capita consumption dropped to 71.7 litres from 73 litres, sources say.

Had it not been for the scantly-dressed ladies, per capita decline would have even been steeper. Venezuelan men may have lusted after a few more beers, but one glance into their empty wallets would have been enough to make them go for tap water. According to Euromonitor, two main factors continued to impact the beer category in 2012: the deterioration of consumer spending power and rapid price increases. Venezuela is an oil-rich country, but years of economic mismanagement under President Chavez, have taken their toll.

The beer market changed drastically after AmBev, which had ranked third, bowed out and entered into a joint venture with brewer Regional in 2010. Now two companies control almost the whole market. Empresas Polar is the leading brewer, accounting for a 79 percent volume share in 2012. Polar Light and Polar Ice rank in first and second place and hold a combined 64 percent of beer volume sales, says Euromonitor. Read on
 

Japan – Coca-Cola to launch pre-heated carbonated drinks in cans

Sounds like an interesting taste experience. Coca-Cola Japan announced in September 2013 that it is planning to launch a fizzy beverage that remains carbonated even when warmed up. The Canada Dry Hot Ginger Ale, in four flavour varieties, will be sold in October, it was reported.

The product will use technology that will stop carbon dioxide escaping when the drink is warmed. The drinks will be heated by vending machines, rather than by self-heating cans which are powered via a chemical reaction.

Another rival, Kirin, is also set to launch its own version of a pre-heated drink called Kirin no Awa in November. Read on
 

UK - Suntory buys Ribena and Lucozade for GBP 1.34 billion

They like their soft drinks alright. Japan’s beverage company Suntory has bought the Lucozade and Ribena brands from the UK’s biggest drugmaker GlaxoSmithKline (GSK) for GBP 1.35 billion (USD 2.1 billion). Suntory will acquire the global rights to the brands and GSK’s Coleford manufacturing site.

GSK first announced its intention to sell off the two brands in February, confirming the news in April.

The deal fits with Suntory’s strategy to expand overseas to counter a shrinking domestic market. Read on

 

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