Berentzen could be sold
After years of declining sales, Berentzen´s owners have decided to explore all options, including the sale of Germany´s oldest distillery.
Apfelkorn, Doornkaat, Bommerlunder – does anybody outside Germany know these brands? Actually, come to think of it, few inside of Germany do. That´s why Germany´s distillery Berentzen, founded in 1758 and located in the north of Germany, might put itself up for sale. Unfortunately, buyers may be scarce and few in between. If Berentzen is lucky (or unlucky depending on your point of view) financial investors might show an interest.
In the 1990s Berentzen´s Apfelkorn was a big hit. The mix of schnapps and apple juice proved enormously successful. Sales of Puschkin vodka and Apfelkorn provided Berentzen with rising sales in a market that even then was deemed to be in long-term decline. Nevertheless, Berentzen decided to ignore general market trends and went public in 1994. For the past ten years its share price has gone south: to EUR 2.95 per share at the end of June 2008 from EUR 12 in June 1998.
Despite the announcement of several turnarounds the owners – the families Berentzen, Papst Richarz und Wolff – are fed up with the ailing business. Even the last CEO, Axel Dahm, could not do anything about Berentzen´s most pressing problem: the increasing reliance on own label production. In 2006, it was reported, Berentzen sold 38 million 0.7 litres bottles of its own brands yet 55 million 0.7 litre bottles of distributor own brands. That did not do Berentzen´s bottom line any good. In 2007, Berentzen´s turnover was EUR 186 million and its loss stood at EUR 11.4 million.
The question is: who will buy Berentzen? Most international drinks group give the German market a wide berth. For years, spirits consumption on average has hovered below 6 litres annually.
German media have reported that Hendersen Global Investors might be interested in acquiring Berentzen, which should fetch several times its market capitalisation of EUR 15 million (end of June 2008).
