France - Belgian brewers protest against
hike in excise
This is what France's President Francois
Hollande means by squeezing the rich. In his EUR 7 billion tax
rise for the well-off and for firms he did not spare the
brewers. On 1 October 2012 the French Government unveiled plans
to hike beer excise by a staggering 160 percent. This would hit
foreign-owned brewers most, as 90 percent of the beer market is
controlled by AB-InBev, Heineken and Carlsberg. Beer production
in France stood at 17 million hl in 2011.
However, excise duty on wine will
remain unchanged as the French Government is obviously in awe of
the country's powerful and often cantankerous agricultural
The French Parliament will vote on this
proposal on 20 December 2012. According to estimates, this
measure alone is expected to flush EUR 480 million into the
French Treasury's coffers.
As could be expected, Belgian brewers cried
murder most foul.
USA - AB-InBev-Modelo deal could hit the wall
Where's the leak? According to rumour, the
U.S. Department of Justice (DoJ) may seek to block AB-InBev’s
proposed acquisition of Mexican brewer Grupo Modelo.
U.S. media say, citing anonymous sources,
that the DoJ is unlikely to approve the deal in its current
state. A-B InBev, which currently owns a 50 percent stake in the
maker of Corona beer, announced in June 2012 that it would buy
the rest of Modelo in a USD 20 billion deal.
USA - Premiumising the beer market
Beer in a blue bottle? Whatever turns you on.
Apparently, AB-InBev's launch of the higher-alcohol Bud Light
Platinum in a blue bottle and Bud Light Lime "Lime-A-Rita," a
Margarita cocktail-taste-alike flavoured malt beverage in a can,
were the most successful debuts this year in terms of volumes.
As AB-InBev reported, in the first six months of 2012, Bud Light
Platinum sold over 1.2 million hl.
Belgium - Duvel Moortgat wants to leave the
The family shareholders of Duvel Moortgat NV,
the brewer of Duvel, are prepared to splash out EUR 125 million
to buy all of Duvel's shares that are not yet in their
possession, the company said on 12 October 2012. The family
still owns three-quarters of the shares.
The offer was set at a maximum price
of EUR 95 per share, which represents a premium of 8.9 percent
over the closing price on 11 October 2012. The offer is subject
to certain conditions, including an acceptance threshold of 95
percent. If the offer is accepted, it will be followed by a
squeeze out under the same conditions, the statement said.
Shareholders, who clung on to their shares,
will make a neat profit on the sale. The brewer's share price
has climbed to around EUR 90, from EUR 16 in 2003. Between 2009
and 2011 Duvel Moortgat's sales rose to EUR 162 million from EUR
113 million, while EBIT climbed to EUR 40 million from EUR 24
Although Duvel Moortgat would not give a
reason for wanting to delist, the family probably thinks that
there are too few benefits gained from a stock market listing.
Although the brewer does not require capital to finance
takeovers (whom should they buy?), the company still has to go
through the stock market motions and pay fees for the listing as
well as publish reports.
It was not always like this. When Duvel
sought a stock market listing in 1999, this was meant to allow
various family members to cash out on their inheritance. These
days the family would like to exert greater control over their
company. Hence the offer to shareholders.
Duvel Moortgat now owns six breweries: four
in Belgium, one in the Czech Republic and one in the United
Greece - Greece's biggest company,
Coca-Cola Hellenic, leaves for Switzerland
The saying came to mind about rodents
deserting a sinking ship when news broke on 11 October 2012 that
Coca Cola Hellenic (CCH) is leaving the country to seek legal
incorporation in Switzerland, together with a London
stock-market listing. The material impact on Greece will be
limited, the company said. The Greek plants will go on working
and the business will be unaffected.
Bermuda - In its 150th year Bacardi remembers
illegal confiscation of Cuban assets 52 years ago
Did Fidel Castro even spare a thought on 15
October this year that his soldiers botched the takeover of
Bacardi's Cuban assets exactly 52 years ago? After the Communist
government announced that it was nationalising sugar mills and
rum factories - including the island's most famous business,
Bacardi - Cuban soldiers immediately headed to Bacardi's office
in Havana with a one-page official document that gave them
control. However, the soldiers made a crucial mistake. They went
not only to the wrong building but also to the wrong city.
Singapore – Heineken gets Asia Pacific Breweries in the end
The earth shook briefly on 28 September 2012 when Heineken’s
executives dropped tons of worries, having received news that
shareholders of Fraser & Neave (F&N), the Singaporean
conglomerate that owns Asia Pacific Breweries (APB), had finally
voted to approve the sale of the brewing unit to Heineken for a
sweetened price of 53 Singapore dollars, or USD 43.24, for each
share of APB the Dutch brewer did not already own.
After a two month battle with the Thai billionaire Charoen
Sirivadhanabhakdi the Dutch probably know only too well how
Carlsberg must have felt when they had their run-in with Mr
Charoen a decade ago and were forced to beat a retreat with
their tails between their legs: this Asian tycoon is not to be
Full control of APB will cost Heineken dearly: about USD 6.3
billion. The deal values APB at around USD 11 billion or 18
times EBITDA, media say.
After decades of often difficult negotiations with its Asian
partner F&N, winning control of APB will allow Heineken to
implement its own policies in crucial growth markets in
APB, which is listed in Singapore, operates 30 breweries across
Asia, including in far-flung countries like Mongolia, Papua New
Guinea and the Solomon Islands. Its brand portfolio includes
Tiger beer and Bintang lager, although Heineken's brands make up
around 30 percent of APB's sales by volume and around half its
profits, it was reported.
Why Heineken did not make a move on APB sooner, only the Dutch
will know. But when Mr Charoen steadily began building up his
stake in F&N, Heineken's executives knew they had to act. They
did raise their offer once and in mid-August even got approval
from F&N’s board for their offer. However, the outcome was still
far from certain a few weeks ago as by that stage Mr Charoen had
already increased his shareholding in F&N to over 30 percent,
the critical threshold, at which he had to make a full offer for
F&N. Which he did.
Throughout Mr Charoen’s cloak-and-dagger machinations Heineken
basically had only two options: either to let the whole thing
blow up and walk away from APB, or force Mr Charoen to
compromise by making a full offer for F&N themselves. The
agreement between Heineken and ThaiBev, which was signed a week
before the crucial shareholder vote and which secured for
Heineken Mr Charoen’s backing for the sale of APB, implied that
the latter had seemed a genuine feasibility.
Thailand – Carlsberg partners with Singha
It’s like with second marriages. Hopefully they work out better
than the first ones. After an acrimonious split from its first
Thai partner, Charoen Sirivadhanabhakdi, and his Chang brewery
(later to become ThaiBev) in 2005, Danish brewer Carlsberg at
the end of September 2012 tied the knot with ThaiBev’s rival
Singha, the company behind Thailand’s first brewer Boon Rawd and
maker of Singha and Leo beer brands.
The move is to expand Carlsberg’s presence in Southeast Asia. In
its past financial year, the region, including China,
contributed only 16 percent to Carlsberg’s volumes and 9 percent
to Carlsberg’s profits (EBIT). In Thailand, with a population of
about 67 million and a per capita consumption of 29 litres of
beer, Carlsberg has had a negligible footprint.
Although the Thai beer market has grown to about 20.6 million hl
in 2011, according to the Barth Report, this has not necessarily
boosted brewers’ profits. According my estimates, the beer
profit pool (EBIT) was about USD 200 million in 2011, which is
low compared with other emerging beer markets.
The 50:50 joint venture with Singha will oversee the marketing,
sales and distribution of Carlsberg's international beer brands
in Thailand, while Singha's brands will be launched in selected
markets outside of Thailand through Carlsberg's international
network, the company statement said. At this stage Carlsberg’s
brands will not be brewed in Thailand but will be imported from
one of the Carlsberg breweries in the region.
The privately-owned Singha, formerly known as Boon Rawd Brewery,
produces beer, soft drinks, water, ready to drink green tea, and
various energy drinks, as well as fish snacks, it was reported.
Asian media say that Singha had a market share of 59 percent of
the Thai beer market in 2011, compared with the 31 percent share
of Mr Charoen's ThaiBev and the 5 percent share of Asia Pacific
With some ill-concealed glee the same media also reminded their
readers that this is the second time Carlsberg has partnered
with a Thai brewer. The first time Carlsberg formed a joint
venture was in 2001 with Mr Charoen’s Chang Beverages, which was
an unmitigated disaster for Carlsberg.
The Danish had to end the alliance after just two years,
accusing Chang of failing to contribute the assets agreed upon.
The partnership with Mr Charoen had been an ambitious one as the
Danish brewer folded in all its Asian assets. Sources at the
time said Mr Charoen was happy to use Carlsberg to distribute
its beer internationally, but did little to push Carlsberg in
Thailand. The relationship ultimately fell apart amid frosty
accusations and a USD 2.5 billion claim for damages by Chang,
once Thailand's "whisky king", Mr Charoen, had received what he
wanted from his perhaps slightly naive Danish partner. To add
insult to injury, Mr Charoen forced Carlsberg to pay USD 120
million to settle their legal dispute in 2005.
Czech Republic – Molson Coors combines European units
Will there be an exodus from Burton to Prague as brewer Molson
Coors integrates its European businesses into a single unit as
of January 2013? Speculation is rife on the web following the
announcement on 1 October 2012 that Molson Coors Europe will
combine its UK and Ireland business with its recently acquired
businesses in Central Europe and establish new pan-European
headquarters in Prague.
– Brewers hit by massive tax hike
Higher taxes on beer and tobacco are supposed to pay for several
economic reforms, including free schooling from the age of
three, Israeli news services say. Israel’s recently craft beer
renaissance might start to whither due to a significant rise in
excise and purchase taxes that the Israeli Finance Minister
Yuval Steinitz ordered at the end of July 2012.
With immediate effect, the tax load on beer almost doubled from
NIS 2.18 (USD 0.56) to NIS 4.19 (USD 1.07) per litre.
UK – One in three pubs at risk of closure
Is the end near for more than one third of pubs
and bars in the UK? According to research by R3, an insolvency
trade body, which was released on 26 September 2012, 34 percent
of bars and pubs have been identified as “at risk of failure” in
the next 12 months.
The report, which made some waves in the UK
media, states further that in London, the proportion of pubs and
bars “at risk” is even higher, at 37 percent, which highlights
that even the capital is not immune to the effects of the
squeeze on consumer spending. The only other region worse
affected than London is the South East, where 39 percent of pubs
and bars are “at risk”.
The figure is compared to a national cross-sector
average of 23 percent of businesses “at risk”.
Blow me down, one in three pubs is at risk? Is that really
newsworthy? Which business is not “at risk” of going out of
business in a country that has suffered under a recession which
has gone on far longer than could have been predicted?
Of course, pubs must find it hard to bring people in through
their doors if fewer and fewer Brits find the money to spend on
And yes, of course, the rate of failure for
restaurant businesses in capital cities is higher than in the
rest of the country. Ever heard of the phenomenon of
But, let’s face it, running a bar or a pub is an uphill struggle
even at the best of times. This may be small consolation to the
thousands of pub- and bar-owners, who face the decision to stay
open or close up. But depressing everybody with such a
gloom-and-doom scenario won’t help either.
Scotland – Taxpayer to fund two breweries
Two brewers, Heidi Beers and Brewdog, are the recipients of
Scottish government grants awarded to a total of 32 companies
under the latest rounds of food and drink funding. On 15
September 2012, it was announced that Heidi and BrewDog have
been given grants totalling GBP 2.4 million to help them
relocate production to Scotland.
Republic - Booze, bullets and Budvar
These days, Czech citizens could be forgiven for
thinking that Czech Government is an oxymoron - a contradiction
in terms - as the country reels from a scandal over adulterated
spirits, an attack on the country's president and a Budweiser
Budvar audit which the government is desperate to bury.
Consider this: although the first victims from methanol
poisoning were taken to hospital in early September 2012 and the
death toll kept on climbing rapidly to over 25, it took the
Czech authorities two weeks before they issued a ban on the sale
of spirits with more than 20 percent of alcohol, and almost four
weeks before they arrested two suspects.
The total ban of the sales of spirits with more than 20 percent
of alcohol was in force for two weeks. Exports of Czech spirits,
valued at EUR 80 million last year, were also stopped following
EU pressure. To date, a total of 85 people have been poisoned,
although at the end of September, the worst health scare for
decades in the EU member country of 10.5 million continued to
bring new patients to hospitals.
100,000 Britons back a call for
freeze on beer tax
Beer drinkers, incensed at excessive tax hikes on the nation’s
favourite pub drink, are now set to force a debate in
Parliament. By 20 September 2012 over 100,000 people had signed
an online petition on the issue, launched by the British Beer
and Pub Association (BBPA). Campaigners say it’s a wake-up call
for the Government and its damaging tax policy on Britain’s beer
The BBPA says that the beer duty has risen by 42 percent since
March 2008, when the controversial beer duty escalator was
introduced – and 6,000 pubs have closed. A typical British pub
is now burdened with GBP 66,500 (EUR 82,000) of duty and VAT on
beer every year, which represent a huge drag on pub businesses.
Minimum price for alcohol faces EU legal threat
Anti-European hackles have been raised in the UK and Scotland
following a legal threat from Brussels, which challenges
Scotland's First Minister Alex Salmond’s law to impose a minimum
price on booze - a plan which Mr Cameron had hoped to follow in
England and Wales.
At the end of September 2012 officials in Brussels told Scottish
ministers they had to withdraw legislation to impose a GBP
0.50-per-unit price (EUR 0.62) on alcohol because it was "not
compatible" with the EU Treaty.
Spain, Italy, Portugal and Bulgaria are also believed to have
concerns about Scotland’s plans as they export drink to Britain.
American Indian tribe's lawsuit against beer stores dismissed
Although a federal judge dismissed an American Indian tribe's
lawsuit on 2 October 2012 that blamed brewers and several stores
for chronic alcoholism on an impoverished South Dakota
reservation, the judge also said that the case belonged in a
state court, thus giving a subtle moral support to the tribe's
claims, U.S. media report.
Australia - Arvo 51 first crowd-sourced beer
It's probably a sign of keeping up with the times that Casella,
the company behind the Arvo brands, has termed Arvo 51 the first
As reported, Australian consumers were allowed to take a vote on
which of the two beers launched by Casella earlier this year
they preferred. Arvo 51 Lager made it a winner with voters over
its competitor Arvo 34 because of its mellower and less hop
driven flavour. Thus Arvo 51 will become a permanent item in the
Casella portfolio as they move forward.
Casella's Managing Director, John Casella, was quoted as saying
that "with the help of almost 9000 Australians who were with us
from the very beginning, we are delighted to announce Arvo 51 as
Casella’s first official lager and the nation’s first
crowd-sourced beer, created for Australians by Australians. We
plan to grow our beer portfolio significantly so it was
important for us to invest in the best resources and team
available, to help drive innovation."
But how very much "old times" is this: to honour the Australians
who took part in creating Arvo, Casella will immortalise one
lucky consumer in a bronze statue.
The lucky winner in another competition, launched by Casella in
mid-September 2012, will be rewarded with a bronze statue of
him- or herself, standing 10 feet tall. The bronze tribute is to
make the perfect addition to one lucky person’s backyard,
balcony or hometown.
I am not sure many Australians would like to have a statue of
themselves standing in their driveways, only to be defecated on
by pigeons, or have the missus run into it while trying to
manoeuvre the car past it. But, then again, I may be wrong.
2009 december ·