When consumers hear “counterfeiting,” they tend to think of fake Rolex watches or Prada handbags – not phony merlot or Macallan whisky. But sales of counterfeit wines and spirits skyrocketed during the covid pandemic and have not slowed since. Data firm Euromonitor estimates that 26 percent of alcohol consumption worldwide is illicit and possibly dangerous to health. The problem is not limited to Asia or Africa. Some of the best counterfeit booze is done in Europe, with a loss of approximately USD 1.4 billion in annual taxes to the EU alone.
News stories about fake alcohol often feature corner shops and convenience stores paying cash to “a man in a white van” – a popular meme in the UK for smugglers and bootleggers. In August, 40 bottles of fake Glen’s vodka were discovered in small shops in Scotland after a consumer complained the vodka smelt of nail polish. The number of incriminated containers may appear small. Most likely the shop owners quickly removed all dodgy bottles from their shelves, since they risked losing their licence.
Even if the EU authorities in July busted a smuggling network involving premium vodka and whisky that spanned several continents, and German courts issued harsh sentences for beer tax evasion this year – these cases are just the tip of the iceberg. For as long as there is a big price differential between legal and illicit alcohol plus inadequate penalties and enforcement, there is no stopping organised crime groups from getting involved in fake booze.
The United Kingdom’s Food Standards Agency (FSA) issued a warning to the public on 5 September, that potentially deadly counterfeit bottles of a popular vodka brand are being circulated throughout the country. Lab results from fake Loch Lomond’s vodka Glen’s, which were sampled in August 2024, confirmed the presence of an industrial solvent, isopropyl, which could have lethal repercussions if consumed. More than 40 bottles (350 ml each), commonly known as half bottles, were discovered in Coatbridge and Glasgow. A spokesperson for the Loch Lomond Group said: “Our priority is the health and safety of the public which includes our many thousands of loyal Glen’s customers. We are working hard to support the excellent efforts of Food Standards Scotland and the other authorities involved to address the matter urgently.”
Glen’s was a victim of counterfeiters before. In 2015, hundreds of fake bottles on sale in England and Scotland were seized by enforcement officers. But those were just counterfeit products, not adulterated ones. Reports say that in the UK, cheaper alcohol brands are more vulnerable to counterfeiting than luxury brands. This may partly explain why the popular Australian wine brand Yellow Tail, which retails at around GBP 7.75 (USD 10.30) per bottle, was the target of a huge scam in 2021. It was assumed that the fraud may have been the work of Chinese gangs. Shops, which stocked the fake wine, were at risk to lose their licence.
A German court, on 5 September, issued a five-year prison sentence for beer tax fraud. The Darmstadt Regional Court found a 45-year-old man guilty of more than 900 cases of beer tax evasion to the order of EUR 11 million (USD 12.3 million. The court considered it proven that he was part of a gang. Between January and October 2021, the gang faked numerous beer deliveries from French bonded warehouses. Untaxed goods are initially stored in such facilities and then shipped from there. Together with his accomplices, the man faked deliveries of over 240 000 hl beer, although none of these deliveries actually took place, and evaded taxes on a large scale.
Already on 8 January this year, the main defendant in another beer tax trial had been sentenced to six years and four months in prison by a Paderborn court. The judges spent around four years dealing with the tax fraud over the course of around 100 trial days. The man from Paderborn had set up a beer tax carousel for beer brewed in France and taxed in Germany, which was ultimately sold on the black market in the UK. The French state incurred a tax loss of EUR 5.3 million (USD 6 million).
Europe’s independent breweries are rising up against the Big Brewers’ market power. They seek to counter the trend towards standardised flavours with a conscious commitment to diversity and regional brewing culture. The newly founded group, Independent Brewers of Europe (IBE), is a pan-European interest group of independent breweries, which sealed their pact with a handshake. IBE campaigns against abuses in the beer market. It wants to defend the diversity of artisanal beer specialities and ensure that they have visibility in the market so that beer lovers can continue to enjoy unhindered access to genuine, regional beer specialities in the future. The initiative for the IBE came from the Independent Private Breweries of Austria, a group of breweries which joined forces almost three years ago and has been committed to preserving the Austrian brewing culture. This is urgently needed, because even in Austria, a single firm – Heineken-owned Brau Union – controls about two thirds of the market. Heineken’s Brau Union is currently at the cartel court in Vienna over alleged abuses of market power.
More booze for AB-InBev. After the launch of a Budweiser Magnum whisky in India, AB-InBev’s Korean Oriental Brewery (OB) agreed on 11 September, to purchase Jeju Soju from Shinsegae to move into the traditional Korean distilled liquor market, the two companies said. OB is setting its sights on the growing soju export market, as the vodka-like rice liquor is catching on in overseas markets alongside the popularity of K-pop and Korean food. Under the terms of the agreement, OB will take over Jeju Soju’s production facility, the real estate and the rights to use the site’s groundwater for an undisclosed sum. OB will then integrate the spirits maker, founded in 2011. Soju exports surpassed USD 100 million in 2023, marking the largest overseas shipments of the alcoholic beverage in a decade.
The UK’s Competition and Markets Authority (CMA) called for public comments on Carlsberg’s proposed GBP 3.3 billion (USD 4.2 billion) acquisition of soft drinks company Britvic. The regulator is seeking insights into whether the takeover could lead to a “substantial lessening of competition” within the UK market, media reported on 11 September. The inquiry into the proposed merger will begin once the comments are collected. Carlsberg made headlines in July, when Britvic finally accepted a bid from Carlsberg after rejecting two previous offers. It aims to integrate Britvic into a single UK-based beverage entity, Carlsberg Britvic, blending beer and soft drinks in one portfolio.
In 2019, the Economist said recently, corporate America needed a rebrand. The divisive presidency of Donald Trump provided the perfect opportunity. American elites increasingly looked to companies to take action on problems ranging from climate change to racial inequality. ESG issues soon reached the top of boardroom agendas. In the wake of the murder of George Floyd by a Minneapolis police officer and the Black Lives Matter protests of 2020, firms embraced DEI policies (diversity, equity, inclusion) and extolled their efforts at corporate goodness. Now the pendulum has swung back. Chatter about climate change on the earnings calls was nearly a third lower in 2023 compared with its peak in 2021, reports show. Greenhushing has become ubiquitous. Talk of diversity has also plummeted.
According to Gallup, a pollster, confidence in Big Business has waned. Far more Americans trust the country’s police, military, churches and unions. Still, it’s a watershed moment that over the summer, plenty of big American firms, including Jack Daniel’s whiskey maker Brown-Forman and beverage firm Molson Coors, either dropped their DEI programme or tweaked it. Having faced threats of boycotts from anti-woke warriors, they all feared becoming the next AB-InBev. The crusaders are cheering: “The landscape of corporate America is quickly shifting to sanity and neutrality.”
Molson Coors ditches DEI practices. Molson Coors said it has scrapped its diversity, equity and inclusion (DEI) policies and is taking a “broader view”, in which all employees know they are welcome. The beer and beverage firm is the latest addition to a growing list of US companies turning their back on woke capitalism. The conservative activist and filmmaker, Robby Starbuck, has been leading a campaign to expose major corporations, which embrace left wing policies. He said on 3 September on X (formerly Twitter) that Molson Coors sent him a letter to explain the changes after he threatened executives with a boycott.
Molson Coors’ decision comes after a wave of firms, including Harley-Davidson, John Deere, Ford and Jack Daniel’s whiskey maker Brown-Forman, over the summer, stepped back from their progressive workplace programmes. They all seem to fear becoming the next AB-InBev, whose Bud Light brand lost its title as the bestselling US beer. The brewer had partnered with a transgender influencer in a marketing campaign in spring 2023, which led to a massive consumer boycott.
After Molson Coors deal Tilray lays off 10 Barrel’s innovation team. Is Tilray Brands the latest roll-up of surplus craft breweries? On 3 September, the firm completed its previously announced acquisition of Molson Coors’ remaining US craft breweries Hop Valley from Eugene, Oregon, Terrapin from Atlanta, Georgia, Revolver from Granbury Texas, and Atwater from Detroit, Michigan. The transaction makes Tilray the 5th largest craft brewer in the US with forecasted 2024 sales of 1.3 million hl beer and beverages.
A year ago, in August 2023, Tilray took over eight brands and assets from AB-InBev, including Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider and HiBall Energy. At 10 Barrel’s brewery in Bend, Oregon, employees celebrated their sale from AB-InBev with a banner saying “now with less Anheuser-Busch”. AB-InBev had acquired 10 Barrel in 2014. One year after, the mood is less joyful. According to reports, in early September, 10 Barrel’s founders and brothers, Chris and Jeremy Cox, tendered their resignation from the brewery they had started in 2006. What followed was a layoff of 10 Barrel Brewing’s entire innovation brewing team on 4 September, its award-winning brewer Tonya Cornett among them. The unknown-number of layoffs included positions in brewing, administration, and sales.
Despite Heineken UK’s biggest price hikes, profit fell in 2023. According to recently filed results, Heineken UK’s pre-tax profit was cut from GBP 165 million to GBP 106 million (USD 139 million) in 2023, while its revenue increased from GBP 2.3 billion to GBP 2.4 billion. In early 2023, Heineken had increased prices by 16 percent per keg on average. The UK unit also makes and sells brands such as Birra Moretti, Desperados, Foster’s, Amstel, Strongbow as well as Beavertown. At the end of 2023, Heineken’s Star Pubs estate totalled 2,382 venues, down from 2,394 in 2022. A statement signed off by the board said: “To protect margins the group delivered its largest-ever price increases to date, contributing to the off-premise share decline.”
Justice is blind … and slow. In early September, we learnt that the Greek brewery Macedonian Thrace (MTB),best known for its Vergina beer, brought a EUR 150 million (USD 166 million) claim against Heineken to court in the Netherlands. MTB argues that Heineken is liable for its Greek-subsidiary’s market abuses and anti-competitive practices. The claim relates to anticompetitive behaviour in the Greek beer market by its subsidiary, Athenian Brewery, between 1998 and 2014. MTB was founded in 1996 by brothers Michael and Demetri Politopoulos in Komotini.
It is alleged that the Heineken subsidiary leaned on retailers and wholesalers to favour its products and suppress competition, which is in breach of European and Greek antitrust laws. In 2015, already, Greece’s competition regulator fined Athenian Brewery EUR 31.5 million for this misconduct. The Dutch court claim – repeatedly but unsuccessfully challenged by Heineken over many years – seeks to make Heineken accountable for the conduct of its Greek subsidiary. The precedent-setting case will be watched closely by multinational firms, since it may establish that they are fully accountable at parent-company level for the actions of their subsidiaries across the European Union.
Arsenal FC and America’s Athletic brewery seek to promote sobriety. As part of the deal, Athletic, which isAmerica’s largest non-alcoholic brewery, was named Arsenal’s first official non-alcoholic beer partner. The sponsorship deal will help Athletic expand its international footprint. Since September 2023, Athletic’s beer have been available in the UK through an import and distribution deal with James Clay and Sons. This gained the US brand access to 5,000 UK venues. But football fans need not go teetotal at Arsenal’s stadium. Chivas whisky (Pernod Ricard) has become the Gunners’ official whisky partner and will open a Chivas bar within the stadium. Arsenal has a total of 27 sponsors, reports say.
In July, Athletic Brewing closed a USD 50 million equity financing round led by General Atlantic, a private equity firm, which doubled its valuation to roughly USD 800 million. Not bad for a top 20 US brewery that had revenues of USD 90 million in 2023, when it sold over 258,000 barrels (300,000 hl) non-alcoholic beer, up from just 875 barrels in 2018.
Fourpure closes London taproom and moves production to Yorkshire. The craft brewer, whichis part of the In Good Company Brewing portfolio, will have its beers brewed by its sister, Magic Rock brewery in Huddersfield. Well aware that the move will eradicate Fourpure’s London credentials, reports on 27 August suggest that the brand is looking for a new home in London.
Fourpure has had a string of owners in recent years. In 2018, it was sold to Australia’s Big Brewer Lion (itself owned by Japan’s brewer Kirin) for an undisclosed sum. One year later, Lion snapped up Magic Rock (founded in 2011), again for an undisclosed sum. Then, in 2020, it combined the two into one business, which it christened Little World Beverages. Lion invested GBP 2.5 million (USD 3.3 million) in Fourpure in 2018 and a further GBP 2.5 million in 2021 to bring its capacity up to 60,000 hl beer. However, Lion encountered “difficult trading conditions” during the pandemic and in 2022, it put the two businesses up for sale. They went to Odyssey Inns, a subsidiary of In Good Company, for an undisclosed sum. Fourpure’s problems did not end there. Its accounts in Companies House are eight months overdue, media said, and the business has been trading under a Company Voluntary Arrangement since 20 June.
Italy’s beer market loses froth. Given Italy’s cost of living crisis, 2023 was a bad year for the country’s brewers. 2024 may continue the downward trend in sales and consumption, exacerbated by adverse weather. Italian media reported that Heineken, in 2023, again confirmed its position as market leader, with its production accounting for 32 percent of total domestic beer production, even though its volumes declined 4.6 percent. Heineken has been in Italy for 50 years. It operates four breweries with a capacity of 7 million hl beer. It also controls the distributor Partesa, which in 2023 made a profit of EUR 11.5 million (USD 12.7 million), media said. In addition to the flagship Heineken brand, it owns the Ichnusa, Birra Messina and Birra Moretti brands. In 2023, Heineken Italia hiked revenues to EUR 873 million (+9.6 percent). It had an EBITDA of EUR 169 million (+19.5 percent) and a profit of EUR 91.5 million (+28.6 percent), the majority of which was paid in dividend to the parent company in June.
The industry body, Assobirra, said that the rise in inflation and the erosion of household purchasing power have led to “a deterioration of the general picture”. In 2023, Italy’s beer production was down 5 percent to 17.4 million hl, consumption down 5.8 percent to 21.2 million hl, exports down 5.3 percent to 3.6 million hl, and imports down 7.5 percent to 7.4 million hl. For the first time in many years, the decline in sales also hit the premium segment, which represents more than 15 percent of volume sales. Per capita consumption of beer stood at 36.1 litres.
There were 998 microbreweries and brewpubs operating in Italy in 2023, up from 870 in 2022. After a steep rise in microbrewery openings (2014-2016), their number peaked at 943, after which it gradually dropped to 756 in 2020, only to rise again throughout the pandemic years. With a total beer output of 450,000 hl, domestic craft brewers had a 2.6 percent share of production.