Spring cleaning

The red triangle, the world’s oldest trademark and the symbol of Bass is disappearing fast from Burton. When going to press the landmark triangle on top of the former Bass maltings and brewery were still there – presumably because they were too difficult to take down. But the signs are bound to go south as Coors is establishing its presence in Britain’s famous beer town. Moreover, as the rights to the brand remain with Interbrew, Coors has no reason to keep the symbols up in the air and for everyone to see. Of course, there are sound reasons for doing away with the old heritage which has sold out, not least the need to sever the link between a location and a brand as brands can be brewed in any location. But still ... 320 jobs will be lost..

E viva España ... and the Spanish beer drinkers

n February, Interbrew signed an agreement with Mahou San Miguel to buy its 12.6 per cent stake in Damm. Damm is the third largest brewer in Spain with a market share of 16.6 per cent. It is the market leader in Catalonia, to the north-east of Spain, and brews the brands Estrella Damm and Voll Damm. In 2000 Damm produced 4.4 million hl and grew 3.9 per cent - more than the market’s average which was 2.2 per cent according to Interbrew. Interbrew would not comment on the price it paid for the stake. However a corporate statement said that the price equalled a 6.6 EBITDA multiple. Some bargain, indeed. Unlike its neighbour Italy, Spanish consumers have taken a great liking to beer. In 2000, per capita consumption was 72 litres. And they enjoy their wine too - at 51 litres per person..

Going Dutch

Germany’s Warsteiner brewery and Royal Grolsch N.V. have agreed to enter into a strategic alliance. Initially, both brewers are to co-operate in the field of procurement. The joint amount of materials purchased in question is estimated at €60 million per annum. It is the intention of both partners to extend the co-operation to other fields of business activity. At the moment studies are being made to assess the benefits of such further co-operation. In 2001, the privately owned Warsteiner brewery sold 5.6 million hl of beer. It employs 1 200 people. Grolsch’s total sales amounted to 3.1 million hl in 2001 while turnover was €273 million. The Dutch brewer employs 900 people.

Grolsch profits rise 6%

Royal Grolsch N.V. reported a world-wide sales volume for the Grolsch brand of 2.95 million hl and a total net profit of €28.6 million in 2001. Both volume and profit stood at record levels. Net profit was 6 per cent higher than in 2000, while the operating result rose 5 per cent and net turnover 7per cent. Further growth in sales volume, operating result and net profit is expected in 2002.
Net turnover rose 6.7 per cent in 2001 to €272.6 million (2000: €255.4 million). This increase was largely attributable to price increases in the domestic market and volume growth in the United Kingdom and other export markets. The operating result increased 4.6 per cent in 2001 to €38.6 million (2000: €36.9 million).
Net profit (profit on ordinary operations after tax) was 6.0 million)..

Keep the money-men happy

Heineken’s full year results were at the top end of analysts’ expectations. They showed a 15 per cent rise in net profits to €715 million from €621million in 2000. The bottom line benefited from a €52 million gain on the sale of the company’s stake in a Spanish hotel group, as well as a cash dividend from Whitbread. Net turnover increased by 13 per cent to €9.16 billion from €8.1 billion in 2000 and operating profit rose by 22 per cent to €1.1 billion from €921 million in 2000. Sales of Heineken beer rose by 4 per cent to 22.4 million hl world-wide. A 20 per cent rise in the volume of Amstel Light in the US compensated for lower volumes of Amstel in Europe. Total Amstel volume remained stable at 10.8 million hl.

Pubs to fight for compensation

The newly-formed United Kingdom Rural Business Campaign, representing pubs whose business was affected by the foot-and-mouth outbreak, has put in a High Court claim for £5.1 billion compensation from the government according to UK media reports. The campaign argues that while farmers received compensation for the effects of the disease, no other business received any money.

Heineken to buy Bravo

According to the "Financial Times", Dutch brewer Heineken is to buy Bravo, Russia’s third largest brewer, for up to US$400 million. Bravo has a market share of 5%.

Budvar to increase exports

Budejovicky Budvar has announced that beer output stagnated in 2001 at 1.34 million hl but that exports rose 8 per cent to 530,000 hl of beer. Budvar is the Czech republic’s 3rd largest brewer. It has implemented plans to set up its own UK operation, ending a 25-year long relation with BB Supply Centre. The new subsidiary, Budweiser Budvar UK, will be headed by sales director Robert Chrt.

Big four national brewers massively underperform in £2.6bn cask ale market

A new report on Britain’s cask ale market shows that Britain’s Big Four national brewers, Scottish Courage, Interbrew UK, Bass Brewers and Carls-berg-Tetley, are massively under-performing in a £2.6bn sector twice as large as previous estimates have made out.
The report shows that while the Big Four, thanks to their huge lager brands, such as Carling, Carlsberg and Stella Artois, have more than 77% of the total beer market in the UK, they capture barely a quarter of the cask ale market. Instead Britain’s remaining 48 or so regional brewers, many of them still run by the families that founded them in the 19th century or before, sell nearly six out of 10 pints of cask ale.6bn by retail value is the second most important segment of the draught beer market after standard lager.com
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Stewart to step down

Apparently, there is only so much flak a Kevlar jacket can withstand. And Brian Stewart’s seems to have worn thin. On
20 January, the UK’s "Sunday Times§ reported that Scottish & Newcastle’s controversial CEO was to stand down and that headhunters had been appointed to look for a new chief executive with "international experience" who would take the company further afield internationally in order to secure its independent future.
For several years now Brian Stewart has been the target of almost vitriolic attack from the media and the City for his obstinate refusal to divest what the City thinks is a value-destructive pubs & hotels division.
However, the City remains sceptical as to where S&N could spend this kind of money. Dickson’s pay package was £522,000..