September 2021

It sent shockwaves around the industry when Australia’s number two brewer Lion announced it has acquired 100 percent of the Fermentum Group, which owns one of the country’s largest and most staunchly independent craft brewers, Stone & Wood, for an estimated USD 370 million. The group is estimated to control about 1 percent (200,000 hl) of the 20 million hl Australian beer market. Insiders suspect the deal was struck on a hefty multiple, which could have put the price tag at more than the rumoured amount.

Scottish craft brewer BrewDog has established its first international joint venture with Asahi for Japan as the UK’s largest craft brewer seeks to increase sales ahead of a planned London IPO. Speaking to the Financial Times newspaper in early September, Mr Watt said: “We see [the IPO] as a key part of our future.” Ahead of the pandemic, BrewDog had been looking to list in 2020. Mr Watt stressed that a sale is not on the cards.

An interesting idea – not that it will ever be seriously considered. The economist Jerker Holm suggested that Sweden’s monopolist off-licence retailer, Systembolaget, should adopt a flexible pricing policy: lower the prices of beer, wine and spirits in southern Sweden, but hike them in northern parts of the country. Mr Holm’s reasoning goes that prices should be set lower in the southern part of the country, where residents are close to cheaper alcohol, especially in Germany and Denmark. This would benefit Systembolaget’s revenues and not least the environment as it would lead to less cross border trade and fewer car journeys.

In Germany, the production of non-alcoholic beers has more than doubled since 2007 to about 6.6 million hl in 2020. Despite an overall decline in beer consumption, non-alcoholic beers continue to enjoy increasing demand. They currently have a market share of 7 percent, which is among the highest in Europe.

Pundits are shaking their heads. Why would Boston Beer, together with PepsiCo, launch an alcoholic soda under the banner of Pepsi’s brand Mountain Dew? Don’t they remember that only a few years ago hard sodas were a “boom-splat phenomenon” (Jim Koch) that faded as quickly as it arrived? The Mountain Dew hard soda will have 5 percent ABV. The new beverage, produced by Boston Beer and marketed by PepsiCo, will hit shelves in early 2022.

Ah well, so AB-InBev has moved into spirits in the United States. Under the brand name Natural Light, its beer brand, it introduced three lemonade-flavoured Natural Light vodka expressions at the end of August 2021. They all come with a relatively low 30 percent ABV. As far as we know, no one has used a beer brand to launch a vodka extension yet. Natural Light, also known as Natty Light, is AB-InBev’s reduced-calorie beer brand, which is sold as a budget beer.

Spare a thought for lawyers. As global M&A activity smashed records during the first half of 2021, corporate lawyers feel the strain from the torrent of work. The brewers, in turn, keep their lawyers busy with lawsuits. Take AB-InBev: Even before its lawsuit against Constellation Brands over a breach of their Corona licencing agreement has been settled, the Mexican arm of AB-InBev has accused Constellation Brands of a second breach of their deal, this time concerning the Modelo brand.

Meanwhile, New Glarus Brewery shareholders are suing CEO Deb Carey over withheld profits. Among other accusations, the lawsuitcontends that the debt-free brewery (240,000 hl beer sales in 2020) has built up USD 100 million in retained earnings, and USD 40 million in cash, which Ms Carey refuses to distribute with the minority shareholders. Ms Carey called the allegations “malicious” and “just lies”.

Prompt payment (or rather the lack of it) is a hot topic in all industries, so much so that the UK government set up its “hall of shame”, aka its Prompt Payment Code (PPC) in 2008. In November 2019, Johnnie Walker owner Diageo was among 20 companies to be suspended from the PPC, since it failed to comply with the Code’s 60 days terms of payment. Rules have since been tightened. As of 1 July 2021, signatories to PPC are obliged to pay small firms within 30 days. Two years later, in August 2021, Diageo is still not back among the signatories. However, the firm said it was “very focused” on improving its payment practices.

Probably lacking big gun lawyers to negotiate exemptions for them under the Scottish government’s Deposit Return System, 100 small Scottish craft brewers fear the new system might scupper their online sales when it goes live in July 2022. Under current rules, small brewers are expected to provide a way for empty containers to be picked up from people’s homes through a take-back service. 90 percent of small brewers now have an online shop, which provides around a quarter of their total sales.

It cannot have been often that secret takeover talks were leaked to the press. The whole point of confidentiality is that no one loses face if inconclusive talks are ultimately abandoned. It came as a surprise, therefore, when in May this year, media were informed that Heineken and South African drinks group Distell were discussing various transaction scenarios. The most likely reason for the leak was that one of the parties was trying to force the other’s hand. By the end of September, we shall know if the two could strike a compromise on the issues still unsolved after months of negotiations. Distell is showing willing. It has withheld dividends and will only make the payout if talks with Heineken do not lead to a sale.

Post-Brexit blues: A lack of qualified drivers combined with tough visa requirements for EU drivers are disrupting the UK’s supply chains. Presently, the UK lacks about 100,000 lorry drivers, out of a pre-pandemic total of about 600,000. There have been reports that pubs were running out of popular beer brands. And that was before 1,000 delivery drivers, working for distribution firm GXO Logistics Drinks, which supplies 40 percent of all beer to UK pubs and hospitality venues, threatened to go on strike over “paltry pay increases”. Luckily, the strike could be averted at the last minute.

Over in the US, as allegations of sexual discrimination and harassment shook the craft brewing industry earlier this year, several industry groups came together as the BRU (Brewing Respect and Unity) Coalition. It seeks to drive an industry-wide adoption of best practices for preventing discrimination, harassment, and violence within the brewing industry.

New Belgium Brewing is giving away Carbon Neutral toolkit free of charge to support other breweries on their journeys toward net-zero carbon emissions. The Carbon Neutral toolkit can be found at

Changes to the Three Tier System? Smaller wine, beer and spirits producers in the US hope that President Biden’s executive order will make it easier to reach consumers, not least by allowing direct-to-consumer shipping across state borders, which is still illegal in most states. On 9 July 2021, President Biden issued Executive Order 14036, titled “Promoting Competition in the American Economy.” It focuses on barriers to competition created by consolidation in many industries. The US Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau has since received hundreds of comments. Most are in favour of tweaking, not razing the Three Tier System.