What’s in a name

The Brewers and Licensed Retailers Association, formerly known as the Brewers Society, has unveiled yet another new name and logo. It is to be called the British Beer & Pub Association. This is the second time in seven years that it has changed its name. Before 1994 the association was called the Brewers’ Society. The name change was explained with reference to the altered landscape in the UK brewing industry. With the name change also comes a change in location. The British Beer & Pub Association has moved its offices from Portland Square in the West End of London to Vauxhall in South London.

Coffee to go at McDonald’s

The fast food giant McDonald’s is planning to sell its UK coffee bar chain "Aroma", set up 10 years ago. Big Mac bought the chain just two years ago for £10 million. The business then consisted of 23 outlets, had annual sales of £10 million and a staff of 300. The number of outlets has since risen to 35. The asking price is £15 million. The sale marks the departure of McDonald’s from Britain’s fast-growing coffee bar sector. Apparently the sector had become too crowded even for the likes of McDonald’s. However, in the US, the Big Mac is keen to develop its coffee shop concept, "McCafe", further.

Interbrew divests its stake in Krym Brewery

Interbrew reached an agreement with Donetsk Brewery about the sale of its 83.98% stake in the Krym Brewery as demanded by the Ukrainian Anti-Monopoly Committee. The forced disposal of Interbrew’s stake in the Krym Brewery follows its acquisition of the Rogan Brewery in December 2000. After the divestment of Krym, Interbrew will still be the market leader with a share of 30% explained Alan Hibbert, Financial Director of Sun Interbrew, at a conference in Moscow. In the Russian market Sun Interbrew now ranks second with a market share of 14.1%. Sun Interbrew has eight breweries in Russia and four in the Ukraine. During the second quarter this year Sun Interbrew sold 3.9 million hl of beer, 34% more than it sold during the same period of last year.

Better safe than sorry

For the first half of 2001, Heineken’s net profit from ordinary activities rose 20% from €249 million to €298 million. Net turnover increased 14% or €556 million from €3,893 million in the first half of 2000 to €4,449 million in this first half of 2001. This increase was mainly driven by the consolidation of earnings from Nigerian breweries. Group volume reached 37.2 million hl of beer, 8% higher than in the corresponding period in 2000.
In the countries where the Heineken brand is positioned in the premium segment the sales volume was 10% higher. The US, Spain, France, Thailand and Italy accounted for most of this growth. Global sales of the Heineken brand rose 5% to just over 11 million hl.
For the whole of 2001 Heineken had expected net profit growth of at least 15%..

Kalnapilis is sold to Bryggerigruppen

Baltic Beverages Holding (BBH) plans to sell its 87% share of the Lithuanian brewery Kalnapilis to the Danish group Bryggerigruppen at a price of LTL 135.1 million (€37 million). The sale is in compliance with an Lithuanian competition authorities’ ruling which demanded that prior to the establishing of Carlsberg Breweries one of the three breweries owned by BBH and Carlsberg Breweries was sold. The sale is subject to approval by the authorities.
After the sale of Kalnapilis, the brewer Alus Svyturys, owned by Carlsberg Breweries, will be merged with Utenos Alus, owned by BBH. The Lithuanian competition authorities must also approve of this merger, which is expected to come in effect early next year. The new company will be named AB Svyturio-Utenos Alus. Tomas Kucinskas will be CEO..

For better or wurst

In the Wild West, they put up "Wanted" posters outside the sheriff’s office if they were looking for an outlaw. These days they put "Wanted" posters up on the Web. Anheuser-Busch, whose sales in Germany have been hampered by the fact that the Czech brewer Budjovicky Budvar has secured the rights to the Budweiser name here, launched a Web-based "Wanted" campaign in August in an effort to find a new name for its famous beer. As a consequence of the trademark dispute, Budweiser is sold under the somewhat awkwardly named label "Anheuser-Busch B" in Germany. By its own admission, Anheuser-Busch distributes 10,000 hl of Anheuser-Busch B annually. Berlin residents were invited to post their suggestions for a new name to www.biername.de..

Who’s next

Miracles do happen and pigs do fly. Come the year 2001 and suddenly the German beer market seems to be the place where all the action is. With Heineken and Interbrew having entered the market amid sounds of thunder and lighting (and gnashing of teeth one might add), it looks like that there will be a flurry of activity in many a bank’s M&A department in the years to come.
A market report by Stuart Price, the beverages analyst at West LB Panmure, which sports the ironic subtitle "the land the industry forgot" gives plenty of reasons why voracious global brewers by the name of Anheuser-Busch, Carlsberg, Guinness, Heineken, Interbrew, SAB and S&N might be tempted to carve out a piece of the German market for themselves. It did not. It does not.e. into foreign markets.price@westlbpanmure.

Germans do it ... Themselves

At the beginning of October, Henninger Brewery was sold to Binding Brewery its (literal) next door neighbour in Frankfurt.
The sale of Henninger came as a surprise to most market observers as it was only in June that Binding, Germany’s number 2 brewing group (10 million hl in 2000), announced plans to kill unprofitable regional brands and mothball several brewing streams. Binding, a subsidiary of Dr Oetker concern, admitted to problems in its Dortmund brewing subsidiary DAB, in its Polish and Czech subsidiaries and its Berlin beverage retail chain Getränke Hoffmann.
Why Binding has agreed to take on Henninger, a regional brewer with a portfolio of standard brands in permanent decline? Your guess is as good as ours. But the sale has put an end to these speculations..

Board reshuffle

Carlsberg Breweries announced that Flemming Lin-deløv stepped down as CEO at the end of August and was replaced by Nils S. Andersen (43). Lindeløv has since taken up
the position as CEO of Royal Scandinavia, a company associated with Carlsberg. Carlsberg Breweries recently reduced ist 65% stake in Royal Scandinavia to 28% and intends to sell the remaining shares eventually in an effort to focus on its core beer and beverage business.
Lindeløv’s departure was accompanied by a rejuvenation, a widening of national diversity, and a scaling down of the ex-ecutive board from previously five to three members now. His colleagues in the Executive Board are Paul Bergqvist (55), the former President of Pripps Sweden, and Bjørn Eric Næss (47), the former CFO of Orkla..

Boortmalt invests in malting plant

In Nova Gradiska, 120km to the east of Zagreb, the Belgian company Boortmalt invested almost US$23 million in a new 50,000 t malting plant (including infrastructure) which was officially opened this summer. The malting technology, acronymically called GKV (germination kilning vessel) was provided by the German company Seeger. As early as 1997, Boortmalt bought a stake in the one and only Croatian malting facility (18 000 t) which was constructed 30 years ago and whose malt quality was beginning to leave a lot to be desired for. Although the new malting plant, Slavonija Slad, was built without any Croatian government guarantee or credit arrangement, the risk associated with an investment of this sort seemed negligible. There are only three malting plants in Serbia..