Bitburger sells Wernesgrüner brewery to Carlsberg
Germany | Carlsberg Group will buy the Wernesgrüner Brewery, including the Wernesgrüner brand, in the Vogtland region of eastern Germany from Bitburger Brewing Group for an undisclosed price. The transaction, announced on 12 October 2020, is pending regulatory approval.
Explaining the transaction, Carlsberg said that the Wernesgrüner brand is one of the most traditional of German beer brands, tracing its roots back to the 15th century. “It will strengthen our portfolio and market position in our core regions of northern and eastern Germany. The addition of Wernesgrüner brewery to our supply chain network will improve efficiency and flexibility in production and logistics in our German business. It is a modern and efficient brewery with a capacity of approximately 1 million hl.”
In 2019, Wernesgrüner had a production volume of around 500,000 hl beer and a turnover of EUR 31 million (USD 36.6 million), Carlsberg said. This is a far cry from 2002, when Bitburger bought Wernesgrüner. Wernesgrüner was then the last of the former eastern German breweries to go to a western German rival. In 2001, Wernesgrüner sold 800,000 hl beer and had a turnover of EUR 55 million (then USD 52 million).
Wernesgrüner in perennial decline
No financial details were disclosed. Assuming that the turnover released excluded excise, insiders put Wernesgrüner’s sales at EUR 62 per hl. This is not a lot, and indicates that Wernesgrüner’s profits must have been slim due to its focus on the off-premise (95 percent of sales), where margins are miniscule, above all in eastern Germany, Wernesgrüner core market. This may explain why Bitburger sought to be shot of it.
Bitburger is Germany’s fourth largest brewing group, behind Radeberger, AB-InBev and Oettinger, with sales of 6.5 million hl beer in 2019.
The transaction value, according to insiders’ estimates, would have been EUR 40 million (USD 45 million) at the most.
The transaction is anticipated to complete in January 2021, subject to competition clearance.
