... then the bad news

Gordon Brown’s new budget has frozen the duty on spirits for the third year running. All other duty increases are in line with inflation: 1p on a pint of beer, 4p on a bottle of wine, 1p on a litre of cider and 1p on a 330ml bottle of alcopops. A packet of 20 cigarettes now cost about £4.20 (US$6.30), an increase of 25p a packet.

First the good news...

The British Government is set to allow pubs to stay open 24 hours a day, sweeping aside century-old law forcing bars to close at 11pm. Proposals would be put forward at the end of March and would come into effect in 2001. Off-licences would also be allowed to stay open at all hours. Bar licences would no longer be granted by courts but by local councils.

Beer output up

According to a report released by the Slovak Brewers’ Association, beer output in 1999 rose 20,000 hl to 4.41 million hl. Brewers originally planned to produce 5.0 million hl of beer in order to become profitable. Last year, malt production increased 7,500 tonnes to 169,000 tonnes. The continuing decrease in Slovak beer exports remains the most pressing problem facing the industry.

More plastic

Heineken’s French subsidiary plans to expand its range of beers bottled in PET after the success of its non-refillable 500ml bottle. Brasseries Heineken started test-marketing its 33 Export-brand lager beer in PET more than a year ago. At the end of March, Hein-eken will launch a 1-litre bottle for the same beer and introduce a Panaché, a half-beer, half-lemonade drink, in a 0.5-litre PET bottle, which will retail in packs of four bottles.

Profit growth

For the year ended 31 March, South African Breweries (SAB) reported a 26.5% rise in pre-tax profits from US$600 million to US$764 which has been boosted by an exceptional gain of US$76 million from the sale of SAB’s PGSI subsidiary. While turnover fell from US$6.18 billion to US$5.42 billion, earnings per share improved from 43.9 cents to 64.3 cents; adjusted earnings per share (minus the effect of the PGSI disposal) were 56.6 cents compared with 54 cents for the previous year. The company announced a proposed final distribution of 18.5 cents which makes a total dividend of 25 cents for the year.
SAB confirmed it was intending to either list or sell its hotels and gaming division later in the year..

The usual suspects...

... had been wooing Bass Brewers for months, but on 14 June Interbrew announced that it reached agreement with Bass Plc to purchase its brewing activities for £2.3 billion (US$3.45 billion). Bass‘ pub estate does not form part of the deal. The completion of the deal is subject to regulatory agreement. With Bass Brewers and the former Whitbread Beer Company in its portfolio, Interbrew allegedly controls 32% of the UK beer market. Pending regulatory approval of the Bass Brewers acquisition, Interbrew UK (formerly Whitbread Beer Company) and Bass Brewers will continue to operate individually. Bass owns six breweries in the UK and three in the Czech Republic (the Staropramen brand). This deal will make Interbrew the second largest brewer in the Czech Republic with a market share of 13%..

It’s a deal

After months of rumour, Interbrew finally announced on 25 May that it completed the acquisition of Whitbread PLC’s brewing business for £400 million (US$602 million). Thus Interbrew has regained full control of its Stella Artois brand which has been brewed in the UK by Whitbread Brewing since 1976. Following this transaction, Interbrew’s market share in the UK will be 10%. Whitbread is the third largest brewer in the UK with a turnover of £1.1 billion for the year ended 4 March 2000. It owns three breweries and employs 3,900 people. In addition to Stella Artois, the brand portfolio includes Boddintons, Murphy’s and Heine-ken, the latter being brewed by Whitbread under licence. The current transaction does not include the Heineken licence agreement which will be retained by Whitbread Plc..

Olé

Last year, Spanish brewers increased their output 3.5%, placing the country third in Production was 25.8 million hl beer worth US$2 billion according to the brewers’ association Cerveceros de España. There were ten brewing groups employing 8,500 people in 22 breweries. Turnover was Ptas 355.3 billion (US$2.05 billion). Exports for 1999 rose 13% on the previous year. After having bought out Grupo Cruzcampo Heineken now dominates the market. This year Mahou, Spain’s second-largest brewer, signed a contract with Carls-berg to brew, market and distribute the Danish brewer’s beer. Mahou has received the rights to the Carlsberg brand from Grupo Cruzcampo.

Flowers in your hair

Watch out for brewers strutting their stuff at the 36th Beer & Flowers festival in the small Slovenian town of Lasko. From 12 - 16 July, 2000 more than 120,000 beer-loving garden enthusiasts will come to Lasko for beer, botanics and bottoms-up, the highlight of the festival being the beer and flowers parade. The event is sponsored by Pivovarna Lasko (1.1 million hl) which holds a 52% share in the Slovenian beer market and posted 15.79 billion tolars (US$72.3 million) in turnover for 1999, up 1% from the previous year. Net operating profit was 1.36 billion tolars, an increase of 4% over 1998. Exports were 24%, the majority of which went to Italy and the states of the former Yugoslavia. For information on the Beer & Flowers festival, visit www.pivo-lasko.si

Flexing its muscle

Baltika’s General Director Taimuraz Bolloyev has been quoted saying that Baltika intends to buy another brewery this year. It already owns controlling stakes in the brewery of the same name in St. Petersburg, Baltika-Don in Rostov-on-Don and Tula Beer near Moscow. Possible regions for an acquisition are the Urals, Siberia, central Asia or Belarus. The capacity of the brewery is supposed to be 1 to 1.5 million hl. The acquisition shall be financed by an additional share issue. Baltika plans to invest US$60 million this year, including US$20 million in Tula Beer and US$18 million in Baltika-Don.