Beer Monopoly





    International Reports











Italy – Heineken buys craft brewer Hibu

Is this a chain reaction? After Birra del Borgo, located in Borgorose near Rome, was sold to AB-InBev in 2016, Belgium’s Duvel Moortgat snapped up a minority stake in Birra del Ducato, located in Soragna, a town halfway between Milan and Bologna. Though the deal was sealed late in 2016, it was only disclosed in July this year.

Also in July this year the craft brewer Birradamare from near Rome was bought by the Canadian-American Molson Coors, while the craft brewer Toccalmatto from near Parma, joined forces with the Belgian brand house Caulier, whose own beers are mostly produced by the de Proef brewery.

As if not to be left out, in October 2017 the craft brewer Hibu was acquired by Heineken’s subsidiary Dibevit, a small company in the Heineken group specialising in the distribution of specialty beers. Read on


Australia – Craft brewers Vale and Feral sold on the same day

The alcohol division of Bickford’s, otherwise best known in Australia for its cordials and fruit juices, has acquired the craft brewer Vale. Both businesses are from South Australia and privately owned. The deal was announced on 12 October 2017.

The acquisition of Vale Brewing, formerly owned by brothers Tim, Pete and Mike Collin, includes the Fox Hat Brewing and Dr Pilkington’s Cider brands.

The alcohol division of the Bickford’s Group, Vok Beverages, will begin selling and distributing all three brands from 1 November 2017. Read on

USA – Big Brewers invest in craft breweries from the “ground up”

With most of the growth in the craft beer segment going to those “one-of” local breweries these days, it was only a matter of time before the Big Brewers like AB-InBev in the US and Lion in Australia would be trying their hands at local brewery-plus-taproom concepts too.

From what we have heard, Australia’s number two brewer, Lion, with craft beer brands like Little Creatures and James Squire, is planning to open half a dozen taprooms – five in Australia and one in Asia.

They will each be a chain of one, meaning they will be locally themed without an existing corporate brand behind them. In plain English, this is what the corporate term “ground up” stands for. Read on


USA – ZX Ventures: a change of strategy for AB-InBev?

Are we alone in wondering if AB-InBev want to have the whole of the brewing industry covered from “AB”-InBev to “ZX” Ventures? Recall that AB-InBev launched the “disrupter” ZX Ventures (the Z reportedly stands for Zythology, the study of beer, and the X stands for eXperience) in February 2015, with the goal of investing into higher end and non-traditional areas of the beer category.

If you take AB-InBev’s corporate Newspeak at face value that “ZX Ventures is a global incubator, operator, and venture capital team”, staffed with a “small army of futurists, dreamers, doers, designers, engineers, scientists, marketers, brewers, builders, and data geeks” in ten countries, who do all kinds of things that will “accelerate the future”, you could be forgiven for thinking that AB-InBev have forked out good money to fund a pony farm where highly-paid people run gratuitous school projects. Read on


USA – Who owns whom? The Definitive Timeline of craft beer acquisitions

Independence” is such a hallmark of beer industry identity that the Brewers Association created a seal to designate which breweries are and are not independently owned.

Buyouts from big breweries get the most attention, but sales amongst independent breweries are also endemic.

The website VinePair analysed brewery sales and acquisitions since the 1980s to create the most comprehensive timeline of craft brewery acquisitions available today.

The graphic can be found here: https://vinepair.com/craft-beer-sales/


UK – SIBA vote cannot show the Big Brewers the door

Heineken and Molson Coors are both “associate members” of the Society of Independent Brewers (SIBA), a situation that displeases some of its members.

The Guardian newspaper on 9 October 2017 reported that, in a recent ballot on the issue, members voted 101 to 60 to end the situation, ie to discontinue the Big Brewers’ membership.

However, the motion did not carry because such a change requires a majority of all 861 members to vote in favour, and most did not turn up to do so. Read on


New Zealand – Craft brewer Renaissance up for sale

Renaissance Brewing, the first local company to receive equity crowdfunding, has gone into voluntary administration after cash flow problems and product management issues, it was reported on 10 October 2017.

This should serve as a warning to keen and eager beer lovers that putting their money where their palates are can be a risky undertaking.

The Blenheim craft brewer became a poster boy for crowdfunding when it raised NZD 700,000 (USD 500,000) from about 300 investors in just a week in August 2014.

Equity crowdfunding was designed to make it easier for small businesses to raise money from the public, by allowing them to raise up to NZD 2 million (USD 1.4 million) from retail investors without filing a formal prospectus. It has since been used by dozens of firms to raise tens of millions of dollars of capital.

Renaissance’s administrator is confident that the brewer will be sold as a going concern. Read on


USA – The GABF and craft brewers’ worries over identity and price

For the 36th time, beer lovers gathered from 5 to 7 October 2017 in Denver, Colorado, at the annual Great American Beer Festival (GABF), the renowned American beer festival and competition, to sample some 3,800 beers from more than 800 craft breweries around the country. 60,000 tickets were sold for the event.

Not present were several craft brewers now owned by the Big Brewers. That’s because the organisers introduced a lottery system which positively discriminated against them in order to give small brewers more of a statistical chance to attend.

In Colorado, beer is part of the state’s ethos and a major industry that employs thousands of people. The state hosts more than 300 craft breweries with an annual economic impact of USD 3 billion in 2016, according to recent research.

It is also home to operations for the two largest beer companies, with Coors in Golden and Anheuser-Busch in Fort Collins. The Beer Institute, which represents the largest brewers, estimates a USD 15 billion economic footprint in the state.

Although craft beer has been on a roll with there now being over 5,500 breweries in the US, there were several articles in the run up to the GABF which worried about the consequences for the industry after the Big Brewers have stepped onto craft brewers’ turf. The largest beer companies now own stakes in dozens of craft breweries. There seems to be consensus that these acquisitions have created an “identity crisis” by rendering the term “craft” obsolete, at least for the true craft brewers. Read on


Japan – Asahi to hike price of beer, the first time in a decade

Is this a preemptive step to avoid being fined? Asahi Breweries will raise the wholesale price of beer delivered mainly to bars and restaurants by about 10 percent in March 2018, the company’s first price hike since 2008, Japan’s media reported on 4 October 2017.

The increase will apply to bottles and kegs of the flagship Asahi Super Dry brand and other labels, including Asahi’s near-beer products. Reportedly, the price for beer in cans will remain unchanged.

Asahi decided to raise the price of beer because of higher distribution costs caused by a labour shortage, company officials told media.

However, the real reason for the price hike may have been changes to the excise law that took effect on 1 June 2017, which entail curtailing sales of beer and other alcoholic beverages at prices below cost. Read on


Indonesia – Asahi to sell stake in local NAB business

Japan’s Asahi Group Holdings said on 2 October 2017 that it plans to divest its interest in a beverage joint venture with Indonesia's Indofood, a unit of Salim Group, to refocus on its core alcohol business.

Asahi said it agreed to sell its stakes in a manufacturing and a distribution company, in which it holds 51 percent and 49 percent respectively. The terms remain to be negotiated. The combined worth of the two companies is reportedly USD 185 million.
Read on


Australia – Po-faced Asahi booked accumulated losses of over AUD 1 billion

Asahi has massively overpaid for its Australian acquisitions. This is what observers say and what is underlined by its accounts. In September 2017 the Australian Financial Review (AFR) ran a piece, which argued that Asahi has racked up losses of AUD 1.13 billion (USD 877 million) in Australia during six years after slashing the value of goodwill by AUD 1.19 billion. This must be seen as an unofficial admission that it paid too much for drinks companies Schweppes and Independent Liquor in addition to massively overvaluing the brands it took on.

Asahi is Australia's second-largest non-alcoholic beverages bottler after Coca-Cola Amatil. It owns or bottles brands like Asahi Super Dry, the craft beer brand Mountain Goat, the alcopop Vodka Cruiser and Somersby cider. Read on


United Kingdom – Private equity money injection for brewer Innis & Gunn

Is accepting private equity funds the accolade for craft brewers? It may seem this way. Because, by taking in a GBP 15 million (USD 19.6 million) investment by the US private equity firm L Catterton in exchange for a 28 percent stake, disclosed in September 2017, Scottish brewer Innis & Gunn has proven the doubters wrong that its wonky finances could bring the company down.

Trust the private equity people to have gone through Innis & Gunn’s books with a magnifying glass. Otherwise, why should they shell out all that money to help the craft brewer accelerate its international growth, intended to double turnover between 2015 and 2018? Innis & Gunn was founded by Dougal Sharp in 2003. Mr Sharp remains the brewer’s largest shareholder. Read on


USA – AB-InBev may be done with buying US craft brewers

Creative destruction” is one of those buzz terms corporate leaders like to pay lip-service to. But for AB-InBev it’s a modus operandi. In early September 2017 the industry was shocked to read that AB-InBev had laid off around 90 percent or 380 sales force employees from its High End division in the US, which is the arm of the company that deals with import brands like Stella and Leffe as well as its US craft brewery acquisitions.

Like its rival MillerCoors and its Tenth and Blake division, AB-InBev’s corporate strategy since 2015 entailed clubbing its high-end brands into one unit where these high-margin brands would receive the tender love and care they require.

But sooner than MillerCoors, the world’s number one brewer saw that the acquired craft breweries and their sales teams were doing a better job at pushing brands than any High End salesperson ever could. It’s easy to imagine that the title of “Wicked Weed sales person” holds more clout with distributors than “High End sales person” ever could, it was pointed out. It’s for the simple reason that these people enjoy greater credibility, authenticity, trust, and reputation. Hence the turnaround in strategy and the redundancies. Read on


Netherlands - FEMSA and Heineken row over Brazil – every so civilly

Is it tit for tat? Heineken’s controlling shareholder, L’Arche Green, was forced to increase its stake in the Dutch brewer in September 2017 by buying EUR 200 million (USD 235 million) of the EUR 2.5 billion in shares, which were put up for sale in a surprise auction by Mexico’s FEMSA after the partners fell out earlier this year over distribution rights in Brazil.

In July 2017, Heineken said it will discontinue its distribution partnership with Coca-Cola FEMSA in Brazil, following its EUR 665 million acquisition of Kirin’s struggling Brazilian business. It thus abandoned its tie-in with Coca-Cola FEMSA in favour of leveraging Brasil Kirin’s existing routes to market for the Heineken portfolio. Read on


Russia – More ill winds to come

Western brewers had better brace themselves for more restrictions and continuing struggles. As the President of the Barley, Malt and Beer Union, Alexander Mordovin, said at drinktec in Munich last month, it’s the explicit aim of his country’s government to bring the foreign brewers’ beer market share down to 50 percent to boost private Russian breweries. Five international brewers (Carlsberg/Baltika, Heineken, Efes, SABMiller and InBev) controlled 96 percent of the Russian beer market in 2006. Today the remaining three – Carlsberg/Baltika, Heineken and AB-InBev/Efes – share 72 percent. Read on


USA – Craft brewers give millions of dollars in donations to charities

American craft brewers are not just making beer, they also use their beer sales as a force for good. Craft brewers donated an estimated USD 73.4 million to charitable causes in 2016, up from USD 71 million in 2014.

The most recent figure is from the 2016 Brewery Operations Benchmarking Survey (BOPS) and was released by the Brewers Association (BA) on 25 September 2017.

The Brewers Association’s biennial comprehensive survey of US craft brewers compiles brewery operations information to establish and share industry benchmarks.

As says the BA, not many business communities can say they give throughout the year, week in and week out, to charities and non-profit organisations.. Craft brewers should excel in sharing this mantra: “Craft brewers use craft beer as a cause for other causes.”

Today there are more than 5,600 breweries in thousands of communities which seem to share this common theme.

Venezuela – No light at the end of the tunnel for brewers

How do you reconcile reports of millions of Venezuelans seeking food anywhere they can find it, including trash cans and dumpsters, with a recent Reuters article (27 September 2017) that local craft brewers are creating a buzz?

As writes Reuters, the Social Club in Caracas is producing a high-end craft beer, with a single bottle costing what a minimum wage worker earns in two days plus his food voucher entitlements. Although beyond the reach of most of Venezuela’s 31 million people, the wealthy obviously can afford to go “bottoms up”. Owners of the Social Club claim they regularly sell out their 3,000 litres produced each month. Read on


Australia – AB-InBev takes over craft brewer 4 Pines

Almost exactly two years after the Melbourne craft brewer Mountain Goat sold itself to Asahi, AB-InBev through its ZX Ventures arm, took over the Sydney brewer 4 Pines. The deal was announced on 22 September 2017.

Although not officially on the market like South Australia’s craft brewer Vale Brewing, insiders say that there were rumours that CUB was to buy 4 Pines in 2011 just before SABMiller acquired CUB. This indicates that there must have been a dialogue between Australia’s major brewer CUB (today owned by AB-InBev) and 4 Pines going back some years.

In a joint statement, the companies said that the aspiration of both brewers is “to see the 4 Pines identity and operations amplified to become locally famous in Australia and celebrated globally.” 4 Pines was founded in 2008. Read on


USA – Again, a sale of Boston Beer is talked up by analysts

Never underestimate the money men’s powers of persuasion. While Boston Beer, the number two craft brewer in the country, is busy implementing its turnaround plans after years of falling beer sales, analysts and other commentators are pushing hard for Mr Koch to sell his company.

If the company fails to turn around its business in the next year, it could mean a buyer comes knocking, a Credit Suisse analyst suggested in a report on 26 September 2017. Read on


USA – Don’t look back …

because what you will see might throw you into a depression. Between 2008 and 2016 the US beer market shrunk from 219 million barrels (256 million hl) to 213 million barrels (249 million hl) and that despite the fact that the US economy under President Obama (January 2009 until January 2017) witnessed economic recovery and falling unemployment. Given the depth of the 2009 recession, some argue the recovery was relatively weak. But, compared to the Eurozone, the US economy performed relatively well, with unemployment dropping to pre-recession levels.

As Beer Marketers Insights reported recently, both AB-InBev and Molson Coors saw their combined market share slip to 2/3 of total beer shipments for the 12 months until June 2017. That’s down from 78.2 percent in 2008 when InBev bought Anheuser-Busch and Miller and Coors merged. Read on


USA – Bill Owens, photographer and craft beer pioneer turns 79

On 25 September, Bill Owens turned 79. In case you have never heard of Bill (shame on you), in the course of his life he has worn many hats: he was a homebrewer, campaigner, brewpub operator, accidental inventor of the IPA style (his Alimony Ale was billed “the bitterest brew in America”), founder of the Alpha King Challenge, publisher of the American Brewer magazine and author of “How to build a small brewery”. Last but not least he was and still is an acclaimed photographer.

Bill founded one of California’s (and America’s) earliest brewpubs, Buffalo Bill’s, in Hayward, a city south of San Francisco, having started out as an ingenious homebrewer who managed to put a cooler box and a garden hose to good use as brewing kit.

The brewpub opened in 1983, but in 1994 he sold it to his then-brewer, Geoff Harries, who still owns and operates it. Bill also founded American Brewer magazine, which today is owned by Jim Dorsch, Jamie Magee and Bill Metzger.

Bill is also an accomplished photographer, who has published several volumes of his photos, the most famous of which is “Suburbia” (1972). His work can be found in many museum collections around the world. More recently, he’s been involved in micro-distilling, founding the American Distilling Institute in 2003.

But it’s for another reason that Bill has to be feted on his birthday. He must be the first living former craft brewer who has a MA thesis in history (no less) devoted to himself. It’s by Patrick Falls from the University of San Diego and called “Bill Owens: A US Craft Beer Pioneer, 1982 – 2001”. It came out earlier this year.

Anyone interested in how craft beer happened upon the US thanks to this charismatic guy needs to read this thesis.

It can be found at http://digital.sandiego.edu/theses/18/


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