Belgium - InBev on track to close
In the United States, the
symbols of capitalism may come tumbling down, yet InBev have
said not to worry. With Anheuser-Busch’s shareholders getting
jittery, InBev re-affirmed that they are still on track to close
their USD 52 billion purchase of American brewer Anheuser-Busch
by the end of the year.
Australia - Bottom of the barrel
The Fosters Group have served
up the dregs for investors with their first profit drop in 16
years, revealing a fall of 88 percent (AUD 117 million) to 30
June 2008, and due mainly to a massive write-down of the value
of their wine businesses. Admitting that they paid too much for
their wine assets (principally Beringer and Southcorp), Foster’s
said that financial returns from wine have not met expectations
and that the multi-beverage marketing approach had failed.
Australia – Will Constellation pull out of
A range of quality vineyards
and winery assets in the Clare Valley, Coonawarra, McLaren Vale,
Padthaway and Wrattonbully regions in South Australia and Mt
Barker in West Australia has been offered for sale on behalf of
Constellation Wines Australia. The relevant winemaking and
fruit-supply arrangements are subject to negotiation. In
Adelaide, persistent ‘grapevine’ rumours suggest that
Constellation is set to pull out of Australia completely if the
market for Australian wines does not improve.
Australia - Hail, baron of the Barossa
Peter Lehmann, 78, Barossa
valley wine legend, is celebrating the remarkable turnaround of
the company that bears his name, following the news of its
best-ever financial result.
Australia - First gain for two years
Australian Vintage (formerly
McGuigan Simeon Wines), the country’s third largest winemaker,
unveiled its first net profit in two years on 27 August 2008.
Japan – Not the Magnificent Seven but
In October Kirin Breweries
will launch a new high alcohol (7% ABV) beer in a bid to gain a
bigger share of the domestic market. The beer, named Strong
Seven, represents Kirin’s development of a third category beer,
supplementing regular beers at 5% ABV and low-malt beers at 3% -
4% ABV. The new category is aimed at 30 to 50 year old males.
Both Kirin and Suntory have already experienced success with
higher alcohol shochu liquor-based drinks.
USA – Judges don't like caffeine in
They should have known what
was coming. In the end MillerCoors had to bow to public pressure
and announce that they were putting on hold the introduction of
Sparks Red, a new caffeinated alcoholic beverage about which 25
state attorneys general have expressed
In a statement, MillerCoors -
a joint venture of Molson Coors Brewing and SABMiller - said
they were putting on hold the introduction of Sparks Red pending
discussions with a group of state attorneys general.
MillerCoors noted that the
federal Alcohol and Tobacco Tax and Trade Bureau previously
approved the ingredients, formulation and labelling for the
beverage, which was scheduled to be introduced on 1 October
In September, 25 state
attorneys general, including New York Attorney General Andrew
Cuomo and Connecticut Attorney General Richard Blumenthal,
called on MillerCoors to abandon plans to introduce the drink,
expressing concerns about the drink's high alcohol content and
its marketing to young people.
The plea to MillerCoors is the
latest move in a crusade against the U.S.’ top brewers over the
hybrid beverages, which seem to have become brewers’ best
friends. Given that beer sales have grown very little in recent
years, these alcoholic drinks spiked with caffeine have become
nice little earners for the brewers. Nevertheless, they have
remained a small category. Sparks represented only about 1
percent of Miller's U.S. production in 2007, according to
industry estimates. Still, Sparks is a high-profit-margin item,
and it is the leader in the energy-brew category. Plus, Miller
paid USD 215 million in 2006 to buy McKenzie River Corp., maker
The controversy over these
energy brews has been going on for quite some time. In February,
attorneys general from several states, including Illinois' Lisa
Madigan, subpoenaed Miller and Anheuser-Busch, the nation's
biggest beermaker, asking for information about energy-alcohol
Both companies have reportedly
complied with the subpoenas, and, in June, Anheuser-Busch said
it would remove caffeine and other stimulants from its Tilt and
Bud Extra offerings.
Now, the pressure is being
ratcheted up on MillerCoors, and not only by the attorneys
general. In August, the Center for Science in the Public
Interest sued the company, claiming stimulants used in the
Sparks offerings are not approved for alcoholic beverages.
With 8 percent alcohol, Sparks
Red would pack more of a punch than Sparks' original version or
Sparks Plus, which contain 6 percent and 7 percent alcohol,
respectively. Most conventional beers have a 4 percent to 5
percent alcohol content.
Like most energy drinks,
Sparks is also loaded with caffeine. The attorneys general claim
that adding caffeine to alcoholic beverages reduces drinkers'
sense of intoxication. Research on the subject is limited.
The U.S. energy drink boom
started during the late 1990s with the introduction of Red Bull.
Today, it is one of the beverage growth categories, a USD 4.8
billion market according to a report by Mintel International, a
Germany – New brewhouse for Tucher
When Germany’s Brau + Brunnen
Group bought the Tucher brewery five years ago, they did not
worry that they only bought the brands but not the real estate.
They knew that someone else would have to fork out the money for
a new brewery and making the whole investment pay off. Now who
would that be? Well, Brau + Brunnen’s buyer, the Radeberger
Group. Read on
Korea - InBev apparently mulls selling
Korean arm and some German assets
According to the Financial
Times, InBev is weighing up whether to sell their Korean beer
business, Oriental Brewery, and certain brands in Germany, among
other assets, as they try to find the best way to fund their
purchase of U.S. brewer Anheuser-Busch.
Citing people familiar with
the matter, The Financial Times newspaper in early September
reported that InBev is currently reviewing sale prospects for
their operations in Korea and Germany, as well as
Anheuser-Busch's entertainment division, its packaging
operations, and its 27 percent stake in Chinese brewer Tsingtao.
The Korean business could sell
for up to USD 2 billion. Oriental Brewery has a market share of
40 percent and sold 6.9 million hl of beer 2007, a figure that
in part led sources to estimate the roughly USD 2 billion price
tag. The business is South Korea's second-largest brewer behind
Hite Brewery Co Ltd. Oriental Brewery sells global brands Beck's
and Stella Artois, as well as Cass beers.
It became part of InBev's
operations in 1998 and merged with the Jinro Coors Brewery in
Chungwon, South-Korea in 1999. That gave Oriental Brewery a 48
percent market share in South-Korea and a volume of about 7.5
million hl of beer per year. Only in 2004 had InBev (then
Interbrew) exercised a put option and paid EUR 612 million for
100 percent control of Hops Cooperatieve U.A., which held 45
percent of the shares of Oriental Brewery. That raised InBev’s
stake in Oriental to 90 percent.
InBev's decision to sell
Oriental comes at a time of high saturation in the South Korean
beer market. South Korea is a relatively mature market and quite
profitable, but not a significant profit driver, say market
InBev would not be the first
to exit the South Korean beer market: Early on, Coors saw the
light, later followed by Carlsberg, which sold its remaining
stake in Hite Brewery in 2006.
Deutsche Bank and JPMorgan
Chase are believed to run the auction for the business. However,
the auction is not likely to start until the closing of InBev's
takeover of Anheuser-Busch.
Oriental Brewery was quick to
deny the rumours, saying its Belgian parent does not plan to
sell the division to fund its Anheuser-Busch takeover. InBev’s
spokeswoman Marianne Amssoms would not comment on Oriental’s
statement, saying that it was too early to discuss specific
Either it was the silly season
or the hacks were away – in any case, the German media did not
pick up the rumour that InBev might also sell some secondary
German beer brands such as Hasseröder to finance the
Anheuser-Busch deal. In Germany, InBev sits on a huge portfolio
of brands that they gobbled up during their shopping spree in
the early 2000s. Already InBev managed to offload a brewery and
its brands that did not go anywhere to its previous owners: that
was the Dinkelacker-SchwabenBräu in 2006.
Whether anybody would be
willing to help InBev out of a glitch? In Germany’s low-margin
market? Highly unlikely.
Ireland – Magners cider sales under
The C&C Group announced in
August that its key cider brands had been hit by a wet summer
and the economic downturn and warned that revenues and operating
profits will be under pressure during the second half. Read on
South Africa – SAB to launch the Hungarian
Grolsch, Dreher - who cares
that they aren’t exactly Germanic in heritage? To the discerning
South African consumers these brands are the closest they will
get to an old-time Germanic beer brand, although Grolsch is
Dutch and Dreher Hungarian. Read on
Colombia – SABMiller sells bottled water
SABMiller announced that its
Colombian subsidiary Bavaria has agreed to dispose of its Agua
Brisa bottled water business and assets, which will be acquired
jointly by Coca-Cola FEMSA and The Coca-Cola Company, for a
consideration of USD 92 million. The disposal of Agua Brisa is
subject to approval by the Colombian competition authorities and
other customary pre-closing conditions, with the closing of the
transaction expected in late 2008 or early 2009. Read on
United Kingdom – Landlords sought
Punch Taverns, one of the
largest pub operators in Britain has seen its share fall over
fears that its business model will not prove sustainable.
Already almost one in five of its tenanted public houses is
looking for a new licensee. Read on
United Kingdom – The story of British
The author Martyn Cornell has
published a new book. “Amber, Gold and Black, the Story of
Britain’s Great Beers”, his 220-page ebook which reveals how the
beer styles of Britain have developed over the years, is now out
The book can be downloaded at
just GBP 5 a time from www.thecornerpub.co.uk.
Whether you are a beer
beginner or a buff, Mr Cornell guarantees readers will learn
things they never knew, about both beers they are familiar with
and beers they have never heard of.
The questions asked – and
answered – include
- Who really developed porter?
(Not the man most other books tell you did it)
- How did India Pale Ale – IPA
– really come about? (Not the way most other books tell you it
- Is pale ale the same as
bitter? (The definitive answer, with historical proof)
- What is the difference
between porter and stout? (A full and proper explanation)
- What exactly is mild? And
what was it? (Not necessarily what you thought it was)
- What were daucus, Dr
Butler's ale, mum, audit ale, O Be Joyful, OK, gill ale and
dozens of other obscure beers, some still around, others
vanished that once filled the pint pots of Britain? (Never heard
of Cornish white ale? Learn all about it.)
december 08 ·
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