Famous last words

We discovered that our strategies and values were well suited to each other, fell in love and got married," said Flemming Lindeløv, President and CEO of Carlsberg Breweries, referring to Carlsberg and Orkla, which in 2000 merged their beverage businesses to form one of the biggest brewery groups in the world. That was four years ago. Today, Lindeløv is gone and the match which was made in heaven, has come to an acrimonious and very mundane end. In February Orkla announced that it would pull out of Carlsberg Breweries, selling its 40 percent stake to the majority shareholder Carlsberg AS for NOK17.5 billion or USD2.5 billion. That put a close to months of dispute between Orkla and Carlsberg’s majority owner, the Carlsberg Foundation. ...

Alles klar

Germany’s competition watch-dog voiced no objections and so the sale of Brau & Brunnen, one of Germany’s largest brewing groups group to Germany’s food and drinks concern Dr Oetker will go ahead as planned. Dr. Oetker has bought 61 percent of the shares for EUR220 million which were held by the HypoVereinsbank. The acquisition makes Dr. Oetker the major brewer in Germany ahead of Interbrew. Dr. Oetker already possesses a large beer portfolio as represented by its Radeberger Group. Brau & Brunnen and Radeberger group are to be kept as separate entities for the time being under the Dr. Oetker umbrella.

Seeking refuge in a tax haven

Interbrew has admitted that it may move its legal home to Luxembourg for tax purposes after its tie-up with the Brazilian giant AmBev. Its headquarters, however, were to remain in Leuven, near Brussels, where it is due to move into new offices. The move would be politically controversial. After all, Jean-Luc Dehaene, the former Belgian prime minister, is a non-executive director of the brewing company and the family shareholders represent the so-called pillars of society. Interbrew’s EUR9.2 billion deal with AmBev is expected to be completed in the autumn.

The vagaries of foreign exchange

Why didn’t anybody tell them that they’d better release figures that are consistent? Take Interbrew’s results 2003. The 2002 base figures in the press release are not the same given in the presentation to analysts. According to the latter, Interbrew’s EBITDA in 2003 grew 0.8 percent to EUR1.5 billion, EBIT 0.4 percent to EUR839 million. Had it not been for a foreign exchange impact of EUR548 million, net turnover would have risen higher than just 0.7 percent to EUR7 billion. In Western Europe EBITDA was up by 7.6 percent thanks to strong mainstream brands such as Jupiler in Belgium and Hasseröder in Germany. The Beck’s family of brands grew by 11.5 percent in Germany. Meanwhile Stella Artois continued its strong performance in the UK premium segment with volume growth of 12.1 percent. ...

Dream on

Oh dear, Hugo Powell, Interbrew’s former CEO, must have been fuming with rage when the news broke of Interbrew and AmBev having clinched a deal. Didn’t he have the dream of making Interbrew the world’s number one brewer but got the sack before he could make his dream come true? How unfair that it is his successor John Brock who was allowed to sign THE deal which catapults Interbrew ahead of Anheuser-Busch. To console Hugo, one should remind him of the daft American saying that "life is a beach and then you lose". Come to think of it, the Australian Daft (see US section of the news) probably needs reminding of this "wisdom" too. Well, how interesting. Something or nothing - could be anything. Of course, analysts the world over had their day(s).....

Job cuts at Carlsberg

Carlsberg, the domestic arm of Carlsberg Breweries, is to merge its sales and marketing operations for Carlsberg, Tu-borg and Coca-Cola at a cost of around 130 jobs. The restructuring means that Carlsberg Denmark’s customer service and telephone sales will be integrated into the sales department. Currently, Carlsberg employs 2,800 people in Denmark.

Ciao Mamma - we will eat out tonight”

The organisers called it "an excellent decision" to hold three tradeshows together at the Rimini fair grounds. Many visitors thought otherwise, especially those who experienced the traffic collapse each day before and after the show. Whatever the case, the three shows - MIA INTERNATIONAL FOOD SHOW, PIANETA BIRRA BEVERAGE & CO and MSE Mediterranean Seafood Exposition - which were held from 31st January to 4th February 2004, attracted a total of 97,539 visitors. According to the organisers, this represents a 2.6 percent increase on the three trade fairs’ total attendance in 2003, of whom 5,945 were foreign trade members (+13.8%). The reasoning to hold the three shows simultaneously had been fed by recent market research into the eating-out habits of the Italian consumer..

No wallflower

Scottish & Newcastle (S&N) does not behave like a wall-flower when it comes to waltzing with suitors. In early February, there was renewed speculation that SABMiller would finally complete the originally planned three-way merger between SAB, Miller and S&N, which was first suggested in November 2001 when documents apparently prepared by investment banks Goldman Sachs and Lazards for Belgian brewer Interbrew were leaked to the British media. With the spotlight on SABMiller, UK commentators wondered aloud if S&N were not the obvious target for an acquisition-hungry SABMiller given that S&N has no dominant shareholders and moreover enjoys strong positions in the UK, France and Russia. Next they turned to spirits group Diageo and other venture capitalists as potential buyers of S&N.e..

Which way you look at it

Due to currency impacts Baltic Beverages Holding (BBH) either increased its 2003 net sales by 13 percent to USD1.3 billion or witnessed a decline of 6 percent to EUR1.2 billion. Likewise EBITDA either rose 4 percent to USD400 million or fell 14 percent to EUR352 million.
New brewery openings and investments in Baltika’s sales and distribution network saw costs rise last year, which is why BBH’s EBITDA margin dropped 2.7 percent. However, BBH’s full year EBITDA margin still remained high at 30.3 percent. After a bad start (or rather very cold start in Russia) with group beer volumes falling one percent year-on-year, BBH’s fortunes returned in the second quarter and the financial year ended with total beer volumes reaching 31.4 million hl (up 8%).4 percent to 33 percent.7 percent (up 1.

The taxman’s new found greed

After two rises in excise duty in one year alone, Slovakia’s brewers had to face a 14 percent drop in beer sales last year. In July 2003 the excise duty was increased from EUR7.28 to EUR12.13 per hl, which added EUR0.02 on each half-litre bottle of beer. Given that beer cost between EUR0.24 and EUR0.37 per 500 ml bottle, brewers were forced to pass the excise increase on to the consumer. Following the January 2003 increase in excise duty, there had been a 10 percent drop in beer consumption. Brewers have already expressed their concern over the speed of tax increases and what they call the uncertainty in Slovakia’s tax system. Slovakia’s beer production has been stagnating for several years at 4.4 million hl. Beer consumption in 2002 was 93 litres per capita..