Although they could have leant back and watched their piles of money grow, Bob Oatley and his family, whose famous Rosemount brand kick-started the Australian wine export boom, and who sold out to Foster’s two years ago, have re-entered the industry – as vintners.

SABMiller’s Chinese venture, in which SABMiller has 49 percent, plans to pay USD 320 million or USD 42 per hl to buy the shares it does not own yet in the leading brewer in China’s Southwest.

Rumours travel faster

According to reports in the Indian media, Anheuser-Busch is planning to enter the local beer market through a joint venture. Anheuser-Busch is expected to roll out its flagship Budweiser and another strong beer in the first half of 2007 in partnership with India’s Crown Breweries from a plant in the southern Indian city of Hyderabad.

Robbing Peter to pay Paul?

Only a few months ago Aussie beer drinkers have been hit with the latest massive price rise on their favourite domestic brews. That was nothing out of the ordinary. New research shows that big beer companies have imposed huge price increases on mainstream beers like VB, Carlton Draught and Tooheys in recent years.

SABMiller moves to top spot in China’s beer market

Having entered the Chinese beer market in 1994 through its 49 percent stake in China Resources Snow Breweries (CR Snow), SABMiller has managed to become China’s major brewer with a market share of 14.9 percent (by its own account), followed by Tsingtao Brewery Co. Ltd., which has a share of 13.9 percent and Yanjing Brewery Co. which has 10.2 percent.

PR disaster

You would have thought that Coca-Cola learnt a thing or two from its Belgian PR blunder in 1999, when the Belgian Government temporarily banned the sale of all Coca-Cola drinks. More than 100 children had to be hospitalised following the consumption of coke’s drinks which forced Coca-Cola to withdraw some 15 million cans and bottles from sales – its biggest product recall in its corporate history. Come August 2006: a different location but the picture is uncannily the same.

Unwanted attention

All it took was a bit of takeover speculation published in the national media and the Foster’s Group Ltd, Australia’s biggest beer and wine maker, saw its shares jump 9.2 percent to a record high of 5.95 AUD at the end of August. The Sydney Morning Herald newspaper had said that Foster’s was being sought by a number of suitors. Although Foster’s Chief Executive Trevor O’Hoy was quick to point out that the company hadn’t received any specific takeover offers, which subsequently sent the shares down as much as 3 percent, the published rumour still served as a timely reminder that Foster’s strategy of self-defence was not all that deterring if put to the test.

Boom, crash!

In his final column for the Adelaide Advertiser, Australian wine-writer Phillip White reminds his readers that 20 years ago South Australian grape growers were encouraged to pull up vines to alleviate the dire effects of a national and global wine glut and laments that the industry did not learn from its mistakes. Facing yet another wine glut, the big wineries are slashing millions of dollars off the value of unsold wine in stock which makes retail prices crash. The medium-sized wineries, i.e. those crushing from 1,000 to 10,000 tonnes, are caught up in the panic and cut their prices in the battle to maintain shelf space in the stores.

Foster’s fire sale of assets continued with the most recent sale of its two Vietnamese breweries to Asia Pacific Breweries (APB) for USD 105 million and its business in India to SABMiller for USD 120 million. The sale marks the group’s exit not only from loss making operations but also from brewing in the Asian region.

Only a matter of time

Baltic Beverages Holding (BBH) announced in June 2006 that they would build a brewery in Tashkent, the capital of Uzbekistan and home to more than 2 million inhabitants, which will commence production next spring. The brewery will have an initial capacity of one million hl of beer. BBH will team up with a local partner, Sarbast Plus, and will hold a share in the joint-venture of 75.1 percent. The total investment is EUR 50 million. What a shame that, as they were signing the contract, an Uzbek government resolution went into force that will end permanent tax, customs, and other exemptions for joint-ventures with foreign investors. In the future, exemptions will be granted only for limited periods.....