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.

Let them have our clone

Aiova, a St. Petersburg brewery, has announced plans to open a 350-seat pub and restaurant in Moscow. The brewer’s Tinkoff restaurant will be a replica of the namesake in St. Petersburg which serves about 1,000 guests a weekend. The new venture will be open for business by the end of the year. Aiova intends to invest US$1.5 million in the Moscow restaurant - the same amount it spent on the St. Petersburg location. A location in the capital has not been chosen yet. The brewer is also actively seeking partners for the restaurant venture. To promote the restaurant, Aiova plans to spend US$150,000 this year in both cities.

Nordic connection II

In 1999, Latvia’s Cesu Alus Brewery posted a loss of 121,077 lats (US$202,000) on a turnover of 970,336 lats and sales of 29,800 hl of beer and soft drinks. The management explained the loss by large investments in marketing and sales. On 27 April construction began for a new 200,000 hl production facility, a two-million-lats investment. Founded in 1590, Cesu Alus is one of the oldest breweries in the Nordic countries. In 1999, the Norwegian-Latvian business development fund sold 33% of voting shares in Cesu Alus to the Estonian A.Le Coq holding company (Tartu Brewery) which in turn is 80% owned by Olvi Oy, the third largest brewer in Finland with a market share of 12% in 1999.

You too

Apparently they did not want to be left out. With the brewing industry consolidating at a fast pace, Joh. Barth & Sohn GmbH & Co. KG and Hopunion Raiser, Scharrer KG, both Nuremberg, decided to merge their domestic and international operations effective of 31 July 2000. The merger will be structured as a mutual cross holdings. Thomas C. Raiser, presently a partner of Hopunion, will join Regine Barth-Daiber, Stephan Barth and Alexander Barth as a shareholder of the new corporation. It will be called Joh. Barth & Sohn GmbH & Co. KG. and will become the largest international hops company. In 1999, Haas/Barth had a share of 29.5% of the international market, Hopunion 10.6%. Together the two companies had a turnover of DM390 million (US$181.4 million) and employed 564 people.

On the prowl

Holsten-Brauerei AG, Germany’s leading brewing group with a market share of 10%, is keen to bring up its share price which has caused the brewer’s market capitalisation to decline from DM390 million in 1998 to DM374 million (US$173.9 million) at the end of 1999. It is significantly lower than Holsten’s fixed assets valued at DM700 million (US$325.6 million). On a turnover of DM1.9 billion (1998: 1.58 billion) Holsten achieved a net profit of 17.75 million (up DM2.3 million) and a net profit margin of 0.93% last year.
Although Holsten has aggressively been pursuing an expansion strategy, recently taking over a majority stake in the König-Brauerei, Duisburg, one of Germany’s top ten brewers, Holsten could itself become the target of a take-over bid..

Nordic connection I

On 1 June Carlsberg tightened its grip on the Nordic beer market by taking over Orkla’s brewing interests in an all-share deal worth an estimated DKr10 billion (US$1.25 billion). Orkla ASA, one of the leading Norwegian groups with interests ranging from branded goods to media, chemicals and financial investments, and Carlsberg will pool their brewing interests in a new Danish company called Carlsberg Breweries. It will be owned 60% by Carlsberg and 40% by Orkla. The number of employees will be 27,000. Carlsberg Breweries will have a total annual production of about 54 million hl beer, an estimated turnover of DKr23 billion (US$2.9 billion) and an operating profit of DKr2 billion (US$250 million). Last year Carlsberg’s beer activities generated operating revenues of DKr16.6 billion (US$2..

Budweiser with record beer output

Last year, the Czech Bud-weiser (Budvar) brewery produced almost 1.23 million hl of beer, a 7.6% increase over 1998. Turnover amounted to 2.39 billion Czech crowns (CZK/ 1 EUR = 35.75 CZK). Net profits of about 478 million CZK are anticipated, a 17% increase over the previous year. Beer exports from the brewery dropped 7%. This is mainly attributed to the financial crisis in Russia. In 1999, exports to Germany also dropped 6%, compared to 1998. A total of 491,000 hl were exported to 56 countries worldwide. Budweiser continues to be the No. 1 Czech exporter with a 37% share of total beer exports.

At long last

It’s official now. The question which has been bugging the industry for years - "When is Interbrew going to go public?2 - has been answered. Although Interbrew’s owners have long resisted going public, the CEO Hugo Powell said on the occasion of releasing Interbrew’s 1999 results that Interbrew was to be introduced to the stock exchange before the year end.
The management has been requested to evaluate all aspects linked to an initial public offering (IPO) and to advise the Board of Directors about the terms and timing of this transaction. The purpose of the IPO is to fill Interbrew’s coffers with the means for further growth. Depending on how much control the three families behind Interbrew are willing give up, the IPO could fetch as much as US$1.35 billion.4 billion (US$7.5%).04..

Austrian beer is alive and well

This is how the Association of Austrian Breweries views developments in the beer and breweries‘ statistics in 1999. Consumption went up 1 l to 109 l per head. Domestic output rose 0.3%, and 4 new brewery plants were commissioned, raising the number to 99. According to "Statistics on the Austrian Brewing Industry 1980 - 1999", Austrians have reverted to classic beer types. Lager consumption rose 3.4% while light beers (max. 3.7 % alcohol by vol.) dropped 17.1% and low gravity beers (9 to 11% OG) 4.0%. "Weizenbier" also went up 3.2%, and "Radler" (shandy) rose 6.2% . The share of cans rose also in Austria by another 2%, reaching 19.5% of unit packs. Returnable packaging holds an 87% share for domestic beer.

1066 and all that - The UK brewing industry and the bitter end

Bootleggers, bargain-hunters, boozing box-watchers: British brewers are in despair. Their countrymen have discovered the pleasures of cocooning. Having a bit of a good time means sitting on the sofa, the remote in one hand and a bottle of cheap beer from France in the other. If you thought matters could not get any worse for British brewers, you are mistaken. Read on.

October 14, 1066: it was a typical autumn day. The sun was just rising above the Channel. King Harold had positioned his army at the top of Caldbec Hill along the Stenlach Ridge, a few miles north of Hastings. He expected to have clear visibility all around him. William of Normandy, his archers, infantry and cavalry would be forced to run up the hill to attack. That was the plan. An armada of white vans and pickups..