Early spring-cleaning

In an effort to fill its coffers - and get out of not so profitable foreign investments - Germany’s Radeberger Group has sold an 98.8 percent equity interest in Browar Dojlidy Sp. z o.o. (Dojlidy) and an outstanding shareholder loan to SABMiller’s Polish subsidiary, Kompania Piwowarska S.A. (KP) for a cash consideration of EUR 35.15 million (approx. US$37.89 million). The acquisition is conditional upon the satisfactory completion of a due diligence review by KP and the approval of the Polish Office for Protection of Competition and Consumers and the Ministry of Interior."
Dojlidy has one brewery, located in Bialystok in the north east of Poland, some 200 kilometres from Warsaw. The company currently has an annual capacity of some 900,000 hl and annual sales of 734,000 hl.5 billion..

Let’s take another look at them

With many potential buyers queuing outside its door, Germany’s Eckes concern, which produces fruit juices and spirits, has postponed the sale of its spirits division until March or April this year to have more time for negotiations. The Big Three of the spirits industry - Diageo, Allied Domecq and Pernod Ricard – are believed to be among the bidders. Although founded as a spirits company in the 19th century, the family-controlled Eckes generated only half of its profits in the spirits segment in 2001. Its turnover was EUR1.25 billion and its profits EUR 42.9 million. Eckes, which employs 2,500 people, would like to use the proceeds of the sale to increase its fruit juice market share in Germany and in Europe, where the consolidation of this beverage segment has picked up speed.

Can I park here?

Question: How do German banks make a profit these days? Answer: By flogging off the family silver. Deutsche Bank has done it, so has HypoVereinsbank. Officially it’s called "portfolio adjustment" but between you and me it’s the same old thing. In February 2003, Hypo-Vereinsbank sold its 32.1 percent stake in the southern German brewer Allgäuer Brauhaus (130,000 hl) to the majority-owner Radeberger Group (8.8 m hl in 2001) which already controlled 57.3 percent. The value of the transaction was not disclosed. That leaves HypoVereinsbank with a 55 percent stake in the 7.4 million-hl-brewing group Brau + Brunnen (Jever, Berliner Pilsner etc.), which it has been keen to sell for some time but without any luck.6 billion. Does Haindl want to become a brewer? Highly unlikely. Stay tuned..

The year that was

And what a year it was. In the end it was not as bad as feared. Despite a wet summer - remember those floods? - German brewers only had to put up with 0.1 percent of a decline in sales. But if you look at the list of Germany’s top beer brands, which all have gained ground or volume rather, except for War-steiner, you do not have to be a rocket scientist to work out that someone has lost big way.
Worst affected were those mid-tier brewers that have to compete against the national brands on their turf and have very little going for themselves. Interestingly, beer mixes did well again. Given that those drinks took off from a very small base, their success appears more dramatic than it was. This is not to belittle their impact. Thank you.
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Amicable divorce

On 1 March 2003 Heineken Italia and Interbrew are to go their separate ways. After eight years, Heineken has agreed to relinquish the rights to brew and market all Interbrew and Labatt brands in Italy for the sum of EUR 19.5 million.
Since 1995 Heineken has held the rights to Interbrew’s brand Stella Artois in Italy as Interbrew in those days did not want to get involved in the Italian market. But since then imported beers have become the most buoyant segment in the Italian beer market (total beer consumption: 16.7 m hl in 2001) with a share of 26 percent. Stella Artois alone sold 170,000 hl in Italy in 2001, claims Interbrew.
While Interbrew and Hein-eken have gone for a friendly divorce, Germany’s Warsteiner and the Netherland’s Grolsch decided to tie the knot..

Hello, stranger

It was only a matter of time. After the German Radeberger Group (formerly Binding AG) and its parent the food conglomerate Dr. Oetker had sold their stake in the Austrian brewer Brau-Beteiligungs-Aktiengesellschaft (BBAG) last year, the path was cleared for BBAG to pursue its own happiness - which seems to lie in finding a new partner. As was announced, BBAG is actively seeking a buyer (or "strategic partner" in modern terminology) to expand further into the beer and beverage markets of central and eastern Europe. Already, BBAG operates in Austria, Hungary, Rumania, Poland and the Czech Republic. As was also announced, BBAG has set its stakes high: it wants to become the number one brewer in these markets. BBAG operates in three different areas: beer, beverages, real estate.6 million..

Desperately seeking ... a buyer

All’s well that ends well. That’s how the saying goes. But not in the case of Diageo and its sale of Burger King. After two years of uncertainty - would there be a flotation, a management buy-out of a trade sale "Diageo’s CEO Paul Walsh declared in July this year that he had clinched a US$2.26 billion deal with a private-equity consortium led by Texas Pacific. However, at the end of November, the sale still had not materialised. The consortium now only wants to pay about US$1.6 billion in cash with Diageo retaining a stake.
The news must have filled WestLB Panmure’s analyst Stuart Price with some satisfaction. For almost a year he has maintained that Diageo could improve the exit value of Burger King through securitisation and - eventually - a partial flotation.68 billion (£1.7bn)..

They were not amused

When Scottish & Newcastle (S&N) posted its interim results at the beginning of December, analysts were not happy. Although the brewer and pub retailer managed to raise turnover 19 percent to £2.6 billion and its pre-tax profit 28 percent to £309.8 million, the positive result was mainly due to mainland European beer and Baltic Beverages Holdings doing well and a lower than expected interest payable line while UK beer had remained stable and contributed £108 million. As in the past, analysts expressed concern over management and the payment of debt. Irrespective of the fact that S&N has finally announced a date for the appointment of a new CEO - early 2003 - analysts worried that the candidate would not change the culture within S&N too much. Then there remains the pressing issue of debt..

New malthouse in Kharkiv

Sun Interbrew Ukraine has begun the construction of a EUR14 million malthouse with a capacity of 45,000 t of malt. If needed, capacity will be increased to 90,000 t of malt per year. Construction is expected to end in 2004. Sun Interbrew Ukraine hopes that the new maltings will meet their malt consumption needs at all the breweries it runs in the Ukraine (Rogan, Desna and Yantar). Excess malt may be sold to other Ukrainian breweries. Sun Interbrew Ukraine is the country’s biggest brewing group, with a market share of 34 percent, which produced 3.7 million hl in 2001, an increase of 21.4 percent year-on-year it was reported.

He’s putting Kazan on the map

The man may only be in this thirties but his ambition will probably get him far. Airat Khairullin, the General Director of the Russian brewery Krasny Vostok hopes to make his plant one of the world’s 10 largest breweries. The what? Indeed. Just because few people outside Russia know that Krasny Vostok is based in Kazan, the capital of the Volga Republic of Tatarstan, a country slightly larger than Switzerland, inhabited by 3.6 million Tartars and Russians and located 1,000 km to the east of Moscow, does not mean that there cannot be a 10 million hl brewery in a city of one million people. Well, there is one.
Khairullin was put in charge of the 100-year-old company in 1996, when the brewery had an output of only 2 million hl of beer per year. In 2001 Krasny Vostok produced 4.