Build or buy?
Ad man John Singleton has sold his Bluetongue Brewery to Pacific Beverages, a joint venture between Coca-Cola Amatil (CCA) and SABMiller.
To take the Newcastle-based company to the next level, the ad man either had to build a brewery and take on the giants, or stitch up a deal. He chose the latter option.
In December, he sold the 50,000 brewery, which was founded in 2003 and produces Bluetongue Premium Lager and Bondi Blonde, to CCA’s joint venture with SABMiller. In 2007, sales of Bluetongue’s beers grew more than 70 percent, so it was making some waves. It was certainly making enough waves to attract the interest of beverages giants CCA and SABMiller who together hope to break up the Australian drinks duopoly controlled by Foster’s and Lion Nathan.
The purchase price was not disclosed, although an estimated value of USD 20 million has been quoted.
As reported, CCA and SABMiller hope to tap some of the AUD 1 billion in annual earnings generated by the Australian beer industry. The venture, called Pacific Beverages, which was founded in 2006, is already importing SABMiller’s brands Peroni Nastro Azzurro, Pilsner Urquell, Miller Genuine Draft and Miller Chill into Australia.
The venture also has an exclusive agreement to sell and distribute the premium spirit portfolio of global premium spirits distributor Maxxium, which boasts brands such as Jim Beam, Canadian Club, Remy Martin, Cointreau, and Absolut Vodka in Australia.
Although this is small fry for companies like SABMiller and Coca-Cola Amatil, it allows them to explore the Australian market, utilising Coca-Cola Amatil’s infrastructure to distribute alcohol, while waiting for larger things to come.
Rest assured that Coca-Cola and SABMiller are watching closely the future of Scottish & Newcastle (S&N). Just imagine what could happen to the Foster’s brand or even to the Foster’s Group, once S&N has been carved up by Carlsberg and Heineken?
Could this be the reason why the venture’s plans to build a brewery in Australia seem to have been put on ice?
If the Foster’s Group were split up, the money Coca-Cola Amatil and SABMiller have put aside for their new brewery could be better spent.
