A la Belge Or the resistible rise of the Belgian brewer Interbrew, Part Two

Come 2005 and Interbrew was going to be the biggest brewer in the world. That was Hugo Powell’s ambitious target. For several years, Interbrew’s family shareholders would stand back and give him free rein. However, when faced with failure the titled worthies dealt mercilessly with the one-time top manager, whose confrontational style of leadership had made them increasingly uneasy.

Hugo Powell as portrayed in one of his last official photographs: the thinning reddish-blonde hair is parted correctly over the left ear. His dark eyes stare back at the camera arrogantly, heavy eyelids almost reducing them to slits. The thin lips are pressed tightly together, unsmiling. He wears no tie. In the background looms the blurred image of a mighty old pile set in a formal French parkland.

Big, bigger, monopoly

Those with a long memory - a dying breed, unfortunately - will probably heave a sigh and say: "Back to square one." Or rather back to the days before Maggie Thatcher’s Beer Orders broke up the hold of the country’s Big Six brewers over the nation’s pubs. With the creation of mega-pubcos it is as if the Beer Orders had never come into effect. Recent mergers among the pub companies have resulted in a new complex pub monopoly which may be just as harmful as the monopoly enjoyed by the former British brewers until the late 1980s. In November Punch Taverns announced that it was buying its rival Pubmaster for GBP1.2 billion (EUR1.7 bn) which makes it, temporarily at least, the country’s biggest tenanted and leased pub owner. The deal, worth approx..

The fokker came too close

For years Shepherd Neame’s advertising slogans for its Spitfire beer brand have raised eyebrows. The brand which was introduced in 1990 to commemorate the Battle of Britain has been promoted with German-bashing slogans such as "No fokker comes close" or "Have the sunbeds, we’re off to the bar". For those not familiar with German habits, just visit hotel pools around the Mediterranean. Germans tend to reserve their sunbeds and deckchairs before dawn so that others - the Brits, for example - will have to make do with, well, nothing. Incidentally, Germans have never complained about the controversial beer ads, which goes to show that they must have a sense of humour after all.
In any case - it is the Faversham-based family brewer and pub operator itself that has made headlines recently.

Carlsberg to sell Stockholm brewery site

In November the Board of Directors of Carlsberg Sweden decided to transfer the production of beer and soft drinks from the former Pripps brewery in Stockholm to Falkenberg and to a lesser extent to Copenhagen.
The transfer of the production will take place gradually, and the process is to be completed during October 2004 according to an official statement. It is hoped that this decision will improve Carlsberg Sweden’s operating profit by approx. SEK70 million (EUR7.8 m) coming into full effect in 2005. Once the transfer has been completed, the brewery site will be sold.
With the closure of the brewery, about 300 jobs will be shed in Stockholm, however, approx. 60 new jobs will be created in Falkenberg. One-time costs related to the restructuring have not been specified..

Taking bribes

Oh dear, oh dear. So much for clean image of Nordic businessmen. Once they were considered to have impeccable ethics, but recent scandals, which also involve Sweden’s alcohol monopoly retailer, Systembolaget, tell a different story: one of greed and corruption, to be precise. The pressure on the CEO Anitra Steen and the board of Systembolaget to crack down on corporate sleaze has grown more intense. According to reports in Sweden, Systembolaget, which operates 420 stores around the country serving about 2 million customers every week, has sacked 40 retail branch managers for taking cash from drinks companies in return for stocking their products. One report even alleged that up to one in five managers may be involved in the escalating scandal..

Get one if you can

In the course of the first nine months of 2003 the St. Petersburg-based Baltika Brewery sold 12.8 million hl of beer. In this period the company’s share of the beer market in Russia reached 20.8 percent, according to a company statement. Export sales rose by 7 percent year-on-year, reaching 800,000 hl. For the second year in a row Baltika has been acknowledged by the Ministry of Economic Development of the Russian Federation as the "best exporter in Russia". Last year, 85 percent of Baltika’s export volume were destined for the CIS countries, especially Belarus, Ukraine and Kazakhstan. Baltic Beverages Holding (BBH) reportedly owns 74.24 percent of Baltika.

The German beverage industry in the national and international environment

On May 15, 2000, the German newspaper, "Frankfurter Allgemeine" published a much noted article concerned with the German brewing industry and written by Prof. Dr. Wolfgang Lück and Dr. Axel Th. Schulte, his assistant at that time. The title was "The German brewing industry needs strong foreign business".The last paragraph of this well-informed article summarised accurately: "The often cited statement "Beer needs homeland" fits with this turn of mind and allows the conclusion to be drawn that the German brewing industry is not only suffering a sales and structure crisis, but also a crisis of meaning. In particular, I have focussed on the most important beer markets in the world, namely North America, Brasil and China. During this time, the image of German beer has gone downhill rapidly.e.

Cash injection

Warsteiner, Germany’s sixth-largest brewing group, has admitted that it has received a cash injection in the order of EUR99 million. Managing Director Gustavo Möller-Hergt confirmed that both the owner Albert Cramer and his daughter Catharina have increased the holding’s net assets by EUR99 million to EUR100 million. The money had already been given to Warsteiner as a loan but it was only recently that Cramer and his successor-to-be have waived their claims. The cash is supposed to provide Warsteiner with better ratings. Möller-Hergt refuted all allegations that Warsteiner was not doing well.

Holsten to go?

Germany’s fifth-largest brewing group Bitburger (output 5.8 m hl in 2002) and Denmark’s Carlsberg have been rumoured to be front runners in the race to buy Christian Eisenbeiss’ stake in Holsten. Should Eisenbeiss, who controls close to 50 percent of Germany’s second-largest brewing group (output 10.4 m hl in 2002), accept the EUR550 million offer, Holsten could be broken up. In that
case Carlsberg would grab the standard beer brands Astra, Holsten, Lübzer and Feldschlösschen, whereas the privately-owned Bitburger would go for the so-called premium brands König and Licher.
According to media reports, Eisenbeiss and the two buyers are very close to signing the papers.5 percent to 5.8 million hl.7 percent drop in its output in cans.3 percent to EUR90.5 million..

Brau und Brunnen to be sold - but not just yet

Quick question: "How do you bring a good company down?" Answer: "There are ways and ways." But the best way to drain a company of its combative spirit is to announce that it is on the sales block. For the better part of 2003, Michael
Hollmann, the CEO of Germany’s number 4 brewing group Brau und Brunnen (B+B), which had an output of 7.2 m hl of beer in 2002, has been in talks with potential buyers. In October alone 14 different parties sniffed around B+B’s headquarters in Dortmund. In the end they all shook their heads and said: "Thank you, but no thanks!" Surprisingly, one investor got very close to clinching a deal: the US investment group One Equity Partners (OEP). But exactly that seems to have been the problem.
One Equity Partners (OEP) is a subsidiary of Bank One..