Warsteiner buys the Herforder Brewery
Privately-owned Warsteiner Brewery is acquiring its rival Herforder Brauerei effective of 1 July 2007 for an undisclosed sum. The price could be a low two-digit million EUR figure because the acquisition includes all of Herforder’s pension obligations as well as substantial guarantees to keep the brand name Herforder going and 200 jobs.
It was a textbook sale. With 15 owners all having a different personal agenda and the brewery’s output in decline, it was only a matter of time before Herforder brewery, founded 130 years ago, would be put up for sale. That it had to be the Warsteiner Brewery to clinch the deal has taken many German market observers by surprise. For years Warsteiner has only grown in its foreign markets. Herforder, at 500,000 hl annual beer output and sales in the order of EUR 50 million, has its best years behind it. In the early 1990s Herforder Pils was about to become a national German brand. Unfortunately success was not lasting. After having had to pay off some shareholders, there was no money left in Herforder’s coffers to fund costly yet image-promoting TV campaigns. When Krombacher, Germany’s major beer brand, began to push into Herforder’s core distribution area, Herforder began to lose market share and its sale became a topic of conversation at brewers’ meetings.
Warsteiner probably hopes that by buying Herforder it can compete against Krombacher in an area that is important to both their sales. Warsteiner and Krombacher had a turnover of about EUR 530 million each in 2006. However, while Krombacher managed to grow the sales of its eponymous brand 1.5 percent in 2006, Warsteiner lost 2.9 percent.
In the past Warsteiner has bought or bought into a host of German breweries thus trying to stem the decline of its Warsteiner brand. This portfolio strategy Warsteiner has labelled “regional premiums brands” and it includes the alt beer brewery Frankenheimer, the Paderborner Brauerei, as well as stakes in the Bavarian Schloßbrauerei Kaltenberg.
| Position | Company | Volume (000 hl) |
| 1 | Radeberger Group | 13200 |
| 2 | InBev Germany | 12500 |
| 3 | Bitburger Group | 7753 |
| 4 | Brau Holding International (Schörghuber/Heineken) | 7050 |
| 5 | Oettinger Group | 5600 |
| 6 | Krombacher Brewery | 5553 |
| 7 | Karlsberg-Holsten Group | 5150 |
| 8 | Warsteiner Brewery | 3850 |
| 9 | Karlsberg Verbund | 3300 |
| 10 | Veltins Brewery | 2506 |
Source: Brauwelt Estimates
