Welcome to a new era in geopolitical turmoil. Who would have thought that it would be Russia’s President Vladimir Putin, rather than US President Donald Trump, to lead the charge? On 30 December, in an escalation of economic and political tensions, Mr Putin signed a presidential decree, appointing a trustee to oversee the Russian operations of AB-InBev-Efes. The brewer is Russia’s largest, selling 22.3 million hl beer in 2023. The decision effectively transfers the ownership to a newly formed entity named “GK Vmeste”. This is the first time that Russian authorities seized assets connected to a Turkish business since the start of the war in Ukraine in February 2022.
Why would Mr Putin do that? Look no further than to Syria, where the Turkey-backed Islamist group HTS managed to topple the Assad regime in December, which had been propped up by Russia and Iran. Russia has made it known that it would like to keep its naval and air bases in Syria. The new Syrian government has not made a final decision whether Russia will be able to. Turkey’s Foreign Minister Hakan Fidan said on 22 December that Ankara does not support any foreign military bases in Syria, including those of Russia. A few days later, on 30 December, Syria’s foreign ministry welcomed a delegation from Ukraine, issuing a statement that drew parallels between the suffering of Syrian and Ukrainian people. The same day Mr Putin signed his decree.
Turkish commentators say that the seizure of AB-InBev-Efes’s Russian assets underlines Russia’s readiness to use economic tools for geopolitical ends. Will Turkey budge? Good question.
2025 began with a whole lot of bad tidings for foreign brewers in Russia: Not only did President Putin confiscate AB-InBev-Efes’ local assets. The government announced new punitive tariffs on imports from countries it deems “unfriendly”, including Germany, effective 1 January 2025. Duties on beer and cider surged from EUR 0.10 per litre to EUR 1 (USD 1.05) per litre. This is the second time Russia hiked tariffs on beer in 2024. The Kremlin claims the move shall bolster domestic industries and counteract Western sanctions. The latest duty hike might just about kill the import beer segment if imported beers end up costing three times as much as a domestic beer – which might be the plan behind the increase in tariffs.
In India, Heineken’s unit United Breweries threatened the government of the state of Telangana on 8 January that it would stop supplying it with beer. The government owes the brewer of Kingfisher beer a lot of money, reportedly USD 105 million. Drinks companies Diageo and Pernod Ricard as well as brewer Carlsberg are allegedly owed a total of USD 466 million in unpaid dues. Moreover, the state has refused to allow higher base prices for beer since 2019/20. This has rendered United Breweries’ beer business in Telangana unviable. On 20 January, the firm said it will resume beer supplies, after “constructive” talks with the government, which assured it would address the pricing and dues in a “time bound manner”.
Telangana is among India’s top beer consuming states. United Breweries has a 70 percent market share. States in India individually regulate the pricing of alcohol products, which are major contributors to their tax revenue. Alcohol is bought by the state government and then supplied to shops in Telangana, where officials had already rationed supplies to deter hoarding and tackle shortages.
Belgium’s trustbusters probe AB-InBev’s commercial terms. The watchdog said on 16 January that it received reports from industry players about the brewer’s commercial contracts, saying it concluded there are “serious indications of a possible infringement of competition rules”. In spring of 2024, it emerged that the Federation of Belgian Beverage Traders (Febed) had filed a complaint. AB-InBev denied any wrongdoing. The brewer has been the subject of a competition investigation before. In 2019, it was fined some EUR 200 million (USD 225 million) by the European Commission for practices that hindered cross-border trade between Belgium and the Netherlands.
The veteran investment manager, Terry Smith, has ditched his fund’s stake in drinks firm Diageo after almost 15 years. He reckons the drinks industry is in trouble due to the impact that weight-loss drugs could have in turning people off alcohol. Mr Smith already sold his stake in 2024 for GBP 307 million (USD 377 million), but only made his reasons public in a letter to shareholders on 9 January. Shares in Diageo have dropped almost 40 percent since 2021. Weight-loss drugs such as Ozempic and Wegovy are not considered novel threats to alcohol consumption. They already sent down brewers’ and drinks firms’ stock in 2023, after early clinical findings had shown a link between those drugs and reduced demand for alcohol in patients.
Constellation Brands stock plunged 17 percent on 10 January after the firm had missed net sales estimates, booking only USD 2.46 billion in revenue (or -0.3 percent over the same period in 2023). Analysts had projected USD 2.53 billion for its third quarter, which ended on 30 November. Making matters worse, the previous week, on 3 January, its stock had dipped along with other drinks firms and brewers, after the US Surgeon General said alcoholic drinks should carry a cancer warning on their label, signalling more tobacco-style regulations in America. Constellation further dampened investor sentiment by slashing its annual sales and profit forecasts. Constellation now expects annual net sales to rise between 2 percent and 5 percent in its fiscal 2025, from 4 percent to 6 percent projected earlier.
Who will take over Boston Beer after Jim Koch? His Wife. For years, when someone asked Samuel Adams founder Jim Koch what his succession plan was, he would quip: “Don’t die”. However, on 25 December, Mr Koch, 75, disclosed to the Wall Street Journal (WSJ) that his wife, healthcare entrepreneur Cynthia Fisher, 63, who sits on the company’s board, will inherit his controlling interest worth more than USD 650 million. Why did Mr Koch have a change of heart and announce an heir to his shares? His advanced age? Or to quell any malicious rumour that he might sell his stake? In May 2024, the WSJ reported that Boston Beer was in talks to sell itself to Suntory, the owner of Jim Beam. Both parties denied acquisition talks. Mr Koch’s voting power will “eventually” pass to Ms Fisher. He has “no plans to retire soon”, though. The couple has been married for more than 30 years. In 2012, Ms Fisher became a director of Boston Beer, making her the first woman on the company’s board, but her appointment was criticised at the time because of her marriage to Mr Koch.
Who did the American Surgeon General have in mind, when he rang in the New Year on 3 January by calling for cancer warnings on alcoholic beverages? Most likely the boomers who were still recovering from the mother of all New Year’s Eve hangovers and didn’t get his message. For years, boomers in rich countries have been blamed for everything that is wrong with the world and themselves. Recent research underlines that it’s the boomers – those over the age of 55 but under the age of 75 – who are keeping their bad habits into retirement. Being the first generation to have had access to contraception, abortion and pop music, they have defied government campaigns to curb drinking, gambling, and smoking. It’s doubtful that cancer warnings on alcohol labels will change that. The Economist concluded in a recent report “that generations now ageing disgracefully were disgraceful in youth, and in middle age. If they’re behaving badly now, there is really not much to be done about it. Except, ultimately, time.”
However, boomers did not do everything wrong. They managed to sway their children and grandchildren towards sobriety. Today, younger folks avoid alcohol, they consume less cannabis and they don’t seem to frolic about as much as the boomers did. Why? “There is no single explanation, The Economist said. Most likely, it’s to do with money. “Netflix and Fortnite are cheaper than cider; and dating apps are better than finding love on the sticky floors of a nightclub.” The trouble is, with youthful sobriety a general trend, nightclubs in the UK could disappear by the end of this decade. But you cannot blame that on the boomers.
Taiwan launches anti-dumping probe into cheap Chinese beer as the aggressive pricing of Chinese beer, unfair trade practices and misleading labelling are hurting the domestic beer industry. Beer imports from mainland China have gained significant popularity, increasing their market share from 8 percent in 2015 to 34 percent in recent years. Aside from being cheaper than local beer, some Chinese brewers use deceptive labelling and packaging to trick consumers into believing their products are not Chinese, or were made in Taiwan. The review is expected to take eight months to a year to complete.
Has Anheuser-Busch suddenly found a new best friend? Or why would it contract brew for rival Pabst? On 2 January, Pabst Brewing entered into a contract brewing agreement with AB-InBev, starting in the first quarter of 2025. The news arrived just after Pabst’s decades-long contract brewing agreement with Molson Coors ended in December 2024. When the contract’s termination was announced in 2019, Pabst disclosed that it had signed an agreement with City Brewing through 2040 for some volume hitherto brewed by Molson Coors. City Brewing from La Crosse, Wisconsin, is one of the largest contract brewers in the US, with facilities in Wisconsin, Pennsylvania, Tennessee, and California. Since Pabst closed all of its breweries in the 1990s, its iconic brands, including Pabst Blue Ribbon, Old Milwaukee, Old Style, Lone Star, and Stroh’s, have been brewed by third parties. The contract volume represents several million hl.
Is the sale of Belgium’s family brewer Het Anker to industry peer Huyghe Brewery, which became public on 26 December, just a lucky match? Or is it a symptom of a wider industry malaise that a swift exit may be the best option all things considered? Beer sales in Belgium dropped 5.8 percent in 2023 over 2022, while exports declined 7.5 percent. In October 2024, it became known that Het Anker’s CEO and major shareholder Charles Leclef, together with his financial partner, had started looking for a buyer. Because he had turned 60 and his son did not want to follow in his footsteps, Mr Leclef had no other option than to sell the company.
Commenting on the transaction. Huyghe’s owner Mr De Laet said that the the two businesses complement each other. “The aim is to export Het Anker’s Gouden Carolus more and at the same time to invest more in domestic sales.”
The final word on Stone versus Molson Coors. On 30 December 2024, the US Court of Appeals for the Ninth Circuit unanimously affirmed Stone Brewing’s USD 56 million jury verdict, now worth over USD 60 million. The verdict is the fourth largest in US history and one of the longest running trademark infringement disputes ever … almost seven years (from February 2018, when Stone filed its suit, to December 2024. At the heart of the matter was the word “stone” and how Molson Coors used it in its rebranding of Keystone Light. Not enough, Molson Coors also taunted Stone and rented billboards nearby its brewery to advertise the rebrand. Although Stone’s suit seemed a bit ludicrous – no discerning beer drinker would confuse a can of Keystone with a can of Stone’s beers – in March 2022, a jury awarded Stone a USD 56 million settlement. A few months later, in June, Japan’s Sapporo offered to buy Stone for a reported USD 165 million. Incidentally, Stone’s legal team, when approached, could not comment on who would receive the settlement: Stone’s previous owners or Sapporo-Stone, as it is now called.