No appetite for roses Wolverhampton & Dudley Breweries and the consolidation of the UK beer market part 2

"I am the hunter," cried the wolf as he slid down the chimney. "I’ll huff, and I’ll puff and I’ll blow your house away." "Sorry, you seem to have forgotten something," replied the little pig as he lit a fire to scorch the wolf’s tail. Fortunately life has not caught up with fairy tales yet. Wolves is alive and kicking, having fought off two hostile takeover bids between August 2000 and August 2001.

In order to survive the occasional low periods in the City, bankers console each other with the advice: "If you can’t take a joke, don’t work in the stock market." This advice does not only apply to bankers. CEOs too should take it to heart. But churning them out was not enough.
Nevertheless, hostile takeovers are still something of an anomaly in the brewing industry.
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The chicks have flown the nest

Once the family of peregrine falcons had left its nest, a team of abseilers climbed up on former Burton Brewery Maltings Tower in Burton’s town centre to replace Bass’ red triangle with the Coors sign, measuring 33 feet by 66 feet. The old Bass signs were offered to the Bass Museum in Burton in order to preserve a unique part of Britain’s brewing heritage. Plans to install the new red and white Coors signs had to be put on hold earlier this year (we reported) after peregrine falcons nested in the tower.
Coors waited until the protected birds had reared the brood and the chicks had flown the nest to replace the red triangle at 136 feet above Burton..

No sense of humour

Diageo has been banned from importing or selling any alcohol in Norway for 6 months starting 12 August 2002. Guinness UDV Norway, Diageo’s local subsidiary, was caught red-handed marketing Smirnoff Ice to consumers in violation of the country’s strict laws regulating the promotion of alcohol. Alcohol producers are allowed to promote their products to the trade but not to the public. Somehow several promotions spilled over into the public section. Ah well, some laws even apply to the world’s biggest drinks company.

Hail Ninkasi - holy cow!

Blame it on too much sun, too little beer or just the silly season. Or how could the Campaign for Real Ale (CAMRA) do this to us? At the Great British Beer Festival, which ran from 6 to 10 August 2002 in London, the campaigners unveiled a new “Goddess of Beer” to encourage women to try real cask ale, Britain’s traditional pub drink. Never mind that the goddess is older than The Mummy. She is also called Ninkasi after the Sumerian Goddess of Beer, who is said to have created her recipe for beer some 4,000 years ago and was worshipped by both men and women at a time when women brewed the beer and ran the taverns. Sorry gentlemen, that’s a naff idea. What is this poor lassie going to do for female consumers on the British Isles? Very little, it is to be feared. Same with females. Definitely..

See you again in court

The plans of Brazil’s AmBev to buy a 37.5 per cent economic interest in Quinsa seem to be off, at least temporarily as Heineken presses forward with its legal case postponing the Quinsa - AmBev transaction until at least 15 September 2002. In its ruling in connection with Heineken’s application for an interim injunction, a Luxembourg court has taken due note of the irrevocable undertaking made by Quilmes Industrial (Quinsa) S.A. to the Court in connection with the injunction in Luxembourg and the arbitration commenced by Heineken before the International Chamber of Commerce (ICC). The Luxembourg court however rejected Heineken’s request to order a longer freeze. to refrain from consummating the transactions with AmBev on an interim and permanent basis..

Litigious brewers

Two groups of competitors - one from Munich, the other from Cologne - won an interim injunction against Germany’s leading beer brand, Krombacher, in June 2002.
The injunction claimed that an environmental campaign by the privately owned Krombacher Brewery Bernhard Schadeberg would put customers under "psychological duress" to make them buy crates of Krombacher beer to save the African rainforest.
In April, Krombacher launched its rainforest project, an initiative to save millions of square metres of rainforest from extinction in Dzanga-Sangha in the Central African Republic (CAR), which was supported by the popular TV presenter Günther Jauch and the Worldwide Fund for Nature (WWF). At the end of July, Krombacher officially appealed against the injunction..

Beer consumption flat

Figures released by the German Brewers’ Association for the first six months 2002 indicate that it was beer mixes which reaped the benefits of the increase in beer consumption (0.9% or 410,000 hl) to 47.9 million hl. Given that the sales of beer mixes rose 37 per cent to 390,000 hl during the first half of 2002, it hardly requires a rocket scientist to work out that regular beer consumption must have stagnated during that period. This has hit hard the majority of Germany’s 1,200 breweries as only 100 of them produce beer mixes.
The future looks grim for Germany’s brewers come 2003 and the introduction of a deposit on non-returnable containers. These days no one knows how consumers will respond to this price increase. In 2001, beer sales were 107..

Let them drink water

Come the silly season and the Eurocrats in Brussels can’t think of anything more outrageously funny than launching their plans to harmonise excise within the EU. The timing could not have been worse. This year, beer consumption in many European countries will be suffering as a consequence of bad weather and consumer reluctance to spend on all things naughty but nice after the introduction of the new currency, Euro, which, according to popular sentiment, has made life more expensive than it was under the old currency regimes.
For Germany, the harmonised EU excise on beer (EUR11.80 per hl) would mean an increase of 25 per cent on the current rate (EUR9.44 per hl) and a price hike of 30 cents on a crate of beer. Wine, which is still excise-free in Germany, would be excised at EUR16..

SAB to brew Pilsner Urquell in Poland

Pilsner Urquell, the flagship brew from the city of Pilzen, is about to take a step forward in brand development as South African Breweries (SAB) prepares to brew "the world’s first golden beer" in Poland by the end of the year. The move to SAB’s Kompania Piwowarska brewery in Tychy Poland will be the first time ever the lager has been produced outside of Plzen (that’s how the Czech spell "Pilzen") and marks the most substantial change to the brand since the brewer switched from oak barrels to conical cylinder brewing tanks in 1993.
"We are tasting it," said Jaroslov Pomp, press spokesman for the brewer Pilsner Prazdroj, emphasising the linguistic similarity between testing and tasting. "We will use our own yeast, own malt, own hops, only the water is original.
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... and another one

Carlsberg Breweries has set itself up as a major player in the Bulgarian beer market (4.0 million hl in 2000) with the help of two recent acquisitions. At the end of June, Carlsberg Breweries bought 59 per cent of the brewery Shumensko Pivo from Ferroal for an undisclosed sum. And at the beginning of August it acquired 67 per cent of the shares of the brewery Pirinsko Pivo (established 1969) from a group of institutional and private investors. Pirinsko Pivo is the third largest brewer in the country, with an estimated beer output of 410,000 hl, sales of US$8.1 million and a market share of 12 per cent. Again there was no mention of the price.
According to Carlsberg, Shumensko has an 8 per cent share of the market and recorded sales of US$7.75 million last year..