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Mid-sized wine producers have become the latest target in a wave of takeover activity as the mega-mergers between Southcorp and Rosemount Wines, Foster’s Mildara Blass with the US producer Beringer, and Lion Nathan’s takeover of Petaluma and Banksia wines are being integrated. According to Johnson Taylor analyst Mark Topy, the big companies have got their hands full at the moment. "Southcorp will offload some brands, BRL does not need any more brands and Foster’s is focused internationally." But British drinks group Allied Domecq should continue to shop around for an Australian wine producer to complete its Australasian wine portfolio after buying New Zealand’s Montana Wines in 2001. Between 1997 and 2002 the tonnage of wine crushed has doubled from 775 000 tons to 1.4 million tons. 1....

It was an upper middle-class idyll. Wide avenues and mighty old piles built in the 1920s with scissors-clipped lawns and tidy flower beds. Into this sylvan enclave snuggled Coopers brewery. If a vintage car came round the corner with the driver wearing goggles and the woman next to him a wide brimmed hat, you would have thought: "Well, I must be Rudolph Valentino".

Even Coopers Brewery, which had been residing in Adelaide’s posh suburb of Leabrook since 1881, did everything to give the impression that time stood still. The white-washed building was kept in good nick as if Coopers, in all modesty and bashfulness, tried to keep it a secret that inside the picturesque ensemble they produced 900.000 hl of wort each year. Tough luck if you happened to be Coopers’ head brewer... Shhhh..

Kirin Brewery Company, Japan’s second largest brewer, has been furthering its overseas expansion with a $540 million offer for a 15% stake in Philippine San Miguel Corp. Whether the acquisition goes through depends on the outcome of a court dispute between San Miguel and the Philippine government, which holds in trust a 47% stake in the company.
Currently, 20% is claimed by San Miguel Chairman Eduardo Cojuangco and 27% by coconut farmers and the Philippine Coconut Producers Federation, who claim the shares were illegally purchased using funds seized from coconut farmers during the rule of Ferdinand Marcos. According to media reports, the Philippine government insists that no compromise will be allowed. "No ... the issue remains in court so there is no compromise agreement there..

Carlsberg Asia Ltd. acquired 8.4 per cent of the share capital in Hite Brewery Co. Ltd. for approx. US$ 68 million, thus increasing its shareholding in the major South Korean brewer. According to a company statement, the acquisition strengthens both Carlsberg Asia’s position as one of Asia’s largest brewery groups and the co-operation with the Park family. The Park family has controlled the company since it was founded in 1933.
The total control of the Hite share capital is now just above 25 per cent. As of January 2002, Hite will be consolidated as an associated company. The acquisition is part of Carlsberg Breweries’ strategy to strengthen its position in Asia through the joint venture company Carlsberg Asia. Its three breweries had a beer output of approx. 9.5 million hl in 2001..

Lion Nathan’s A$68 million friendly takeover bid for wine company Banksia Wines went flat as the brewer did not manage to gain full control. Lion Nathan won 85 per cent of Banksia but Allied Domecq holds a 14,97 per cent blocking stake which it does not want to sell. The brewer has had to extend its bid for Banksia twice. Allied Domecq has already indicated that it would not accept an offer because the British drinks group has distribution rights for Banksia brands in New Zealand through its recently acquired Kiwi wine company Montana.

Amid fears of overproduction, Australia’s wine industry is approaching a record harvest of 1.5 million t. The nation’s 6th largest wine producer, Cranswick Premium Wines, has already decided to pay growers not to pick cabernet sauvignon grapes in the Griffith region of New South Wales. Cranswick’s CEO Graham Cranswick-Smith was quoted as saying that he would pay growers A$100 a ton not to pick cabernet sauvignon grapes. Riverina Estate, the 8th biggest producer, has told its growers to find other outlets for their grapes. The problem seems to stem from an increase in cabernet sauvignon production from 56,000 t in 1993/1994 to 159,000 t in 1999/2000.

In an effort to transform itself into a wine company only, Australia’s Southcorp has completed its long-awaited sale of its water-heater business to Japan’s Paloma Industries for A$540 million. The sale price was above the book value of A$430 million and would deliver a A$200 million after-tax profit, Southcorp’s CEO Keith Lambert was quoted as saying. Two other companies in Southcorp’s appliances’ division were excluded from the sale and still have to find a buyer prepared to spend A$650 million to A$700 million on them. Investors were pleased with the sale. In 2001 Southcorp also sold its packaging business for almost A$1 billion.

Having failed to find buyers for its brewing operations in Wuxi and Suzhou, Australasian brewer Lion Nathan is exploring the production of other products apart from beer. The breweries, which have a combined capacity of 4.0 million hl of beer, are presently working at just 30 percent. Lion Nathan will not leave the Chinese market but aims at achieving a cash breakeven as soon as possible.

In an effort to persuade fashion-conscious women in their twenties to consume a light alcoholic drink, Japanese beverage company Takara Shuzu plans to produce 1.4 million 330ml cans of Can Chu Hi "Sour" in Thailand this year. The drink is made from spirits and fruit juice and has 6 percent ABV. In Japan this drink is doing well among women who would otherwise not consume alcoholic beverages, earning US$ 219 million in sales in 2000. Can Chu comes in three flavours: lychee, grape and orange. The Thai version is sweeter than the Japanese original and is priced at 35 baht (US$0.8) per can. According to Thai media reports, the market for light alcoholic beverages amounted to 3 million cases last year. The market was led by Spy Wine Cooler, an alcoholic fruit cocktail, and Bacardi Breezer.

Sales growth of 5 percent per annum over the period to 2006 is forecasted for the Indian beer market by drinks industry analysts Canadean. However, this growth depends on an increase of personal income and taxation changes. At present per capita consumption is low at 0.5 l not least because taxation at around 60% means that only the middle and upper income groups can afford a beer every now and again.
Domestic beer production was 5.5 million hl in 2000 according to the Barth Beer Report. Beer has always been easier to tax than locally produced spirits which are unregulated. Consequently, beer is an important revenue earner for the government. Over the past five years compound growth has been encouraging. In 2000 beer sales rose 7 percent compared to 2 percent in 1999. +44-1256-394218.

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