Visiting a Scottish distillery must be so romantic (and profitable for the brands’ owners) that in 2023, Diageo alone welcomed 1.13 million people to its sites in Scotland. The world’s biggest Scotch whisky producer operates 12 visitor centres at its distilleries across Scotland, as well as the Johnnie Walker Princes Street emporium in Edinburgh, which opened in 2021 at a cost of USD 108 million.
Naturally, the global brand home for Johnnie Walker attracted the most visitors: 359,000 people. The Talisker distillery was second most popular with 184,000 visitors, while 157,000 people walked through the doors of the Oban distillery, media reported on 12 March. The whisky trail has proven such a boon to brand marketing that Diageo has invested some USD 236 million in Scotch whisky tourism since 2018.
The good news might make investors ignore Diageo’s worries in Dublin, where green types seek to ban Guinness’s lorries from crossing the city centre on their way to the port. But the big issue remains: How will Diageo fight painful volume declines in spirits, especially in its key US market, as was revealed in its recent interim results?
Teamsters have picketed Molson Coors Texas brewery for more than 40 days over pay dispute. The same week that Molson Coors announced record profits, it offered its workers less than a dollar in new wages. This angered the Teamsters union and more than 400 members began a strike at Molson Coors’ Fort Worth brewery, Texas, on 17 February. Molson Coors and the Teamsters have since returned to the negotiation table but talks broke off on 28 March as Molson Coors offered just five more cents per hour in its wage proposal to the workers who brew and package its signature beers.
Brewer Duvel Moortgat becomes victim of cyber-attacks. Production at the Duvel Moortgat brewery in Puurs-Sint-Amands (Antwerp) only restarted on 7 March, after a ransomware attack three days previously had halted production at its several breweries in Belgium and the United States. The cyber-attack is under investigation by the Antwerp public prosecutor’s office.
On 13 March, it became known that another group of attackers claims to have stolen more than one terabyte of data from Belgium’s Duvel and Duvel-owned Boulevard Brewing in the United States. Both breweries were listed on the Black Basta ransomware cartel’s dark web blog, which it uses to showcase and threaten its latest victims. The ransomware gangs are supposed to be Russian-affiliated.
The merger of two Luxembourg distributors seems to worry AB-InBev. The drinks distributor Munhowen recently acquired another distributor, the family firm Heintz for some EUR 12 million to EUR 15 million. However, the merger is now subject to scrutiny by the European Commission. It must determine whether the merger restricts competition in the market.
AB-InBev owns Brasserie de Luxembourg, which is best known for its Diekirch beers. According to Munhowen, part of the Brasserie Nationale group (beer brands Bofferding, Battin), it was AB-InBev that complained to the Luxembourg Competition Authority about Munhowen’s acquisition. While the local competition watchdog saw no reason to start an investigation, AB-InBev pressed ahead and asked the European Commission to look into it. The European Commission has 90 days to decide on the matter. In the meantime, Munhowen and Heintz will continue to operate separately.
Luxembourg is a tiny country in the middle of Europe with some 660,000 inhabitants. Domestic beer sales stand at 400,000 hl annually, about half of which is imported.
Tobacco firm Altria agreed to sell about one fifth of its stake in AB-InBev in order to raise cash for its own share buyback programme, which shall keep its investors happy. Per Reuters, Altria currently holds about 197 million shares of AB-InBev. On 13 March, Altria announced it plans to sell 35 million of them, or one fifth. Moreover, the deal grants underwriters the option to acquire an extra 5.25 million shares of AB-InBev. Based on its closing price of USD 64.55 per share on 13 March, the transaction was valued at approximately USD 2.26 billion. This will reduce Altria’s stake in AB-InBev to about 8 percent, from currently 10 percent. Additionally, AB-InBev will buy back around USD 200 million worth of shares from Altria.
Dublin City traffic plan is not so good for Guinness and thebrewer urged Dublin City Council not to block its “historic” route to Dublin Port by removing its lorries from the north and south quays. Presently, Guinness’s lorries with its iconic stout for export cross the city along the quays of the river Liffey, if they want to reach the port (in the east of Dublin) from St James’s Gate brewery.
The new Dublin City Centre Transport Plan, which seeks to remove passing-though traffic from the city centre, would force Guinness’s lorries to take circuitous routes to the port. This would result in increased journey times and up to 927 more tonnes of CO2 emissions, while costing Diageo some EUR 2.2 million (USD 2.4 million) extra each year. Parts of the plan will be implemented this summer, restricting access to public transport, cyclists, and pedestrians only.
Asahi closes Greenwich’s Meantime brewery and shifts production, including Dark Star beers,to the Fuller’s Griffin Brewery in Chiswick, which it also owns. Some staff will be made redundant but others will be offered jobs at Fuller’s, the UK trade publication The Grocer reported. The move will unite all of Asahi UK’s local beer brands at a single production site in west London, the brewer said. Asahi UK relocated production of Dark Star beers to Meantime in late 2022, having closed the former craft brewery’s site in Partridge Green, Sussex.
More than 1,200 UK pubs closed in 2023. Nearly 200 were lost to demolition or conversion, says CAMRA. It is a small victory that the owners of the famous Crooked House pub, which was gutted in a fire on 5 August last year, were ordered by the local council to rebuild it in its original form within three years. It is believed the wonky building suffered from an arson attack, nine days after being sold to ATE Farms for “alternative use”. ATE farms has connections to a number of other businesses, including the company that runs a landfill site next door. The rest of the building was knocked down without permission less than 48 hours later, prompting a national outcry. The police made a number of arrests. All have since been released on bail.
The Save the Crooked House campaign group, which has 35,000 followers on Facebook, will need to keep its pressure up. The owners have since appealed against the council’s order. The appeal will now go to a Planning Inspector, not a judge, who still might favour development. No date has been set yet for a hearing.
AB-InBev: Record turnover in 2023 but US sales decline. AB-InBev’s Full Year 2023 results beat sales estimates. It raised its annual dividend by 9 percent on 29 February, but its shares slipped as investors digested the news of poor US sales, the impact of hyperinflation in Argentina and the absence of another share buy-back. The world’s major brewer may have lost as much as USD 1.4 billion in sales last year because of the backlash to its brief partnership with a transgender influencer to promote Bud Light beer. In North America (USA and Canada), revenue declined 8.3 percent to USD 15 billion, with EBITDA decreasing by 21 percent to USD 4.7 billion, the firm reported.
Molson Coors’ contract agreement with Pabst ends December 2024, when all of Pabst’s beers will be brewed by contract brewer City from La Crosse, Wisconsin. Fifth-ranked US brewer Pabst is coming off a banner year, with volumes sales up 6.8 percent and dollars up 7.7 percent in 2023. Some of that growth is attributed to consumers boycotting Bud Light, which started in April last year. But Pabst did not benefit as much as one would think from Bud Light’s troubles. Pabst estimates that only one third of its gains were Bud Light-related, given that Pabst is strong in markets where Bud Light has a low share, particularly in the Pacific-Northwest and metro Chicago.
It is likely that Pabst would have sold more beer last year. But it struggled with stock-outs over the summer. Molson Coors was its primary supply partner and ramping up production of its own beers after the Bud Light event. Molson Coors simply could not do more for Pabst than was in their contract. This year, the contract brewing agreement between Pabst and Molson Coors is coming to an end. It had been signed between Pabst and Miller Brewing Co in the 1990s, when Miller (now part of Molson Coors) did a fair bit of contract brewing.