Pret a Big Mac

The American burger giant has taken a 33% bite of Pret a Manger, Britain’s premier sandwich chain, in a deal valued at £40m to £50m in cash. Pret a Manger runs more than 100 outlets in London and the southeast of England and currently plans to take the business overseas. Taking a stake in Britain’s hottest sandwich chain comes natural to a company like McDonald’s that is keen on diversifying into niche food brands which have potential to be rolled out internationally. The Aroma coffee chain is one previous example. The deal was met with consternation by the British media, fearing that Pret a Manger would sell out on its standards.

Take them to the courts

They have taken the first judicial hurdle. Interbrew has received the official go-ahead to pursue a judicial review of the Competition Commission’s decision at the beginning of January to block the brewer’s £2.3bn acquisition of Bass brewers. In May or June, depending on the timing of the next General Election, hearings will take place at the High Court in London. A decision may be reached in July.
Interbrew is challenging the prescribed remedy of having to sell Bass Brewers to one buyer only. The Belgian brewer is not challenging the ruling as such. It is believed that the legal action will give Interbrew at least until the end of the year to complete the disposal.
Stewart Gilliland has been appointed Managing Director of Interbrew UK as of 30 April 2001..

Whitbread sells pubs

That’s it. Another pubs estate has been sold to a bank. Whitbread, the hotels, restaurants and leisure operator, announced the sale of its 3,000-strong pub division to Morgan Grenfell Private Equity. The price was £1.625bn (US$2.3bn). Whitbread also said that around £1.13bn (US$1.6bn) would be returned to its shareholders via a cash payment and would include a loan note alternative. The payout for shareholders is expected to be completed by June.
Morgan Grenfell Private Equity, a Division of Deutsche Bank, is a new entrant to the sector. It has named Ian Payne, formerly Managing Director of Hilton’s Ladbroke casinos division, as CEO of the company that will run the Whitbread pub estate.
All eyes are now set on Scottish&Newcastle and its 750 pub outlets which are up for sale..

Beer production up 22%

Beer production in Russia rose 22% last year compared to the previous year. 54.9 million hl were produced compared to 44.99 million hl in 1999.
According to Vladimir Schischin, Director-General of the Association of Beer Industries, the increase in production is mainly attributable to large-volume producers such as Baltika, St. Petersburg, Otschakovo, Moscow, Krasny Vostok, Kasan, and the Klin brewing combine. At the same time, 30 areas of Russia showed a decline in beer production. The main reason for this is that volume producers are "beginning to squeeze out" local producers.
Beer imports dropped again in 2000. Exports of Russian beer are quite low. They go mainly to CIS countries. Additional capacity can be added only in the next expansion phase which can start in 2001..

Thou shalt not see

The Sejm, Poland’s parliament, passed legislation in March which bans TV commercials for beer between 6am and 11pm, prohibits billboards, movie and some magazine campaigns. The bill also proscribes drinking alcoholic beverages in public and sets terms for employee alcohol testing. This is a step up on the previous legis-lation which at least allowed the promotion of non-alcoholic beer. The law is now on its way to the Senate which has 30 days to review it before it is passed on to the President’s office for a final decision.
Poland’s Media Watch, which monitors outdoor ad spend-ing, reported that in 2000 brewers spent US$16m on this form of advertising, more than 10% of the outdoor sector’s entire turn-over.5m hl (31.2% of the market).1% of the market).43m hl, down 12% from 1999..

Heineken’s net profit up

Heineken NV announced that it achieved a 20% rise in net profit in 2000. Net profit rose to €621m (US$574.5m) from 1999’s €516m. Sales were €8.11bn versus €7.15bn. Operating profit rose 15.3% to €921m. The larger than expected rise in net profits was boosted by acquisitions, such as Spanish brewer Cruzcampo and Slovakian Gemer. Total beer volume was 97.9m hl. Sales of the Heineken brand world-wide rose by 5.9% to 21.6m hl. In the US, the sales volume of the Heineken brand increased by 15% and that of the Amstel brand by 13%. In Brazil, all eyes are set on Heineken to increase its stake in Brazilian brewer Kaiser to more than 50% from its current 14% stake.

Beer consumption rises

In 2000, Lithuania’s beer consumption continued to rise and reached almost 60 litres per capita, up from 54.6 litres the previous year. Total beer consumption was 2.2m hl, an increase of 170,000 hl on 1999. Domestic brewers sold 2.15m hl of beer.
Baltic Beverages Holding (BBH) has announced that it will sell its 87% stake in the Kalnapilis brewery, one of the three breweries owned by Carlsberg Breweries and Baltic Beverages Holding in Lithuania. The Lithuanian competition authority had approved of the merger between Carlsberg A/S and Orkla on the condition that one brewery was sold.
The sale could fetch US$40m to US$50m as Kalnapilis brewery has been heavily modernised since becoming a BBH brewery in 1994..

Italians drink more beer

The latest evolution of consumer trends in the markets for alcoholic and non-alcoholic beverages has been presented at the International Beverage Fair in Rimini (February 10th to 14th, 2001). In total, the rise in beer consumption is astonishing. After per-capita consumption had stabilised at about the 25 to 26 l for a number of years, it increased in 2000 to 28.1 l. Domestic production rose 3 % to 14.96 million hl, with a sales value of 3 billion Lira. 20,000 people are employed in breweries. 47 % of all Italians drink a beer at least once a year. One third of consumers have brand preference. The so-called microbreweries where beer is made in "a craft fashion" and dispensed from kegs are enjoying increasing success.
About 90% of Italians prefer pale lager beer..

Say it with flowers

What kind of bouquet do you think Heineken sent to Paulaner and Paulaner to Heineken on Valentine’s Day this year? Red tulips (Heineken) and blue hyacinths (Paulaner), perchance? Of course, we are speculating wildly. But it was on Valentine’s Day that Heineken and Bayerische BrauHolding (Paulaner), a member of Schörghuber Corporate Group, issued a short statement saying that they had decided to set up a joint venture.
A rumour which in early February had dominated conversations at the Beer Fair in Italy’s sea side town of Rimini, was thus made a fact. Alas, no information was given as to the size of Heineken’s stake in this joint venture, only that it was to be a minority stake. Moreover, no financial details of the deal were available..

Evolution of brewing groups and private breweries (over 2.0 million hl per annum)

Table 1, a breakdown of total beer sales in the Federal States of Germany in 2000, indicates that total sales fell by 0.4%.
This drop is attributable to declines in Berlin/Brandenburg (-4.6%), Hesse (-3.8%), North Rhine-Westphalia (-2.3%), Baden-Württemberg (-0.2%) and Bavaria (-1.7%).
Biggest increases in sales were registered in Mecklenburg-Western Pomerania (+8.8%), Lower Saxony/Bremen (+3.3%), Rhineland-Palatinate and Saar
(+3.2%), Saxony-Anhalt (+3.9%), Thuringia (+1.4%) and Schles-wig-Holstein/Hamburg (+1.2). In the latter States, exports seem to have risen unless domestic sales have also increased.
When looking at Table 2 showing the evolution of brewing groups and private breweries, it is noteworthy that the Holsten Group, with a volume of 10. Becks & Co.8%..