Duvel to appoint ex-AB-InBev executive to its board

In a highly unusual move, the leading speciality beer producer Duvel Moortgat plans to appoint Alain Beyens, 49, to its board. Mr Beyens is currently CEO of StarBev, which is the central European beer unit AB-InBev sold to private equity outfit CVC in 2009 for close to USD 3 billion. Before that Mr Beyens served in various roles for AB-InBev. He was General Manager for Belgium and Germany and later Zone President for Central Europe and Zone President for Western Europe. As a matter of fact, Mr Beyens was one of Duvel Moortgat’s major competitors in a number of markets.

His four-year appointment needs to be okayed by Duvel Moortgat’s Annual General Meeting (AGM) on 1 June 2011. But the appointment seems certain as the Moortgat family controls about 70 percent of the brewer’s shares.

Together with Mr Beyens, Duvel Moortgart will appoint Axel Miller, the Chairman of the Management Board of the private bank Petercam, as an independent director.

This being Belgium, you could call these appointments kosher since there are not that many Belgian nationals around with the sort of expertise required by a board director. No doubt Mr Beyens’ managerial background will allow him to guide Duvel Moortgat towards improving profitability, cost control and return on investment, thus driving up its market value.

Besides, Duvel Moortgat said that the appointments meet the standards of the Belgian Corporate Governance Code regarding impartiality. However, that does not make them any less unusual. It’s almost as if Deutsche Bank invited its competitors Commerzbank, Citigroup and Credit Suisse to its board. Or closer to home, it’s as if SABMiller asked Carlos Brito, the CEO of AB-InBev, to serve on its board. Transparency is a fine thing – but how far do you take it before it acquires a certain haut gout?

That’s why Duvel Moortgat’s appointments raised a few eyebrows. Let’s not forget that Duvel Moortgat operates the Bernard brewery in the Czech Republic, where StarBev’s unit Staropramen happens to be the number two player. Obviously, to avoid accusations of oligopolistic shenanigans, Mr Beyens will not be dealing with issues relating to the Czech market.

So even if the whole thing is above board – what can be Duvel Moortgat’s ulterior motives for bringing in a renowned cost-cutter and a banker? Could it be that Duvel Moortgat is exploring its future options, which come down to two: should they continue as an independent company or should they seek a tie-up with a bigger player in the beer sector? No doubt, StarBev’s brand portfolio would look a lot more valuable (and sellable) with the Duvel brand on it when CVC looks for an exit in a few years’ time, either through a direct sale of StarBev or a stock-market listing.

Hopefully, curious shareholders will raise the issue of Mr Beyens’ and Mr Miller’s appointments at Duvel Moortgat’s AGM and executives will provide them with a satisfactory answer. We think they should be told.