Germany’s Warsteiner Brewery sells CASA Isenbeck to SABMiller
Argentina has proven tough going for Germany’s privately-owned Warsteiner Brewery, which produces the eponymous Warsteiner pils. Lured into the market by its phenomenal growth prospects – per capita consumption of beer is only 44 litres compared to Brazil’s 57 litres – CASA Isenbeck has gradually expanded production capacity to 1.2 million hl.
Distributing its beer has proven a nightmare as the Argentine beer market is controlled by Quilmes (owned by AB-InBev) with a 75 percent market share and Chile’s CCU (in which Heineken has a stake) with a 20 percent market share according to Germain Hansmaennel.
Three years ago, when CASA Isenbeck had turned EBITDA-positive for two years in a row, Heineken, SABMiller and FEMSA were rumoured to be interested in buying CASA Isenbeck for almost EUR 100 million each, but CASA Isenbeck’s owner and founder, Albert Cramer, refused to sell, believing that he would be able to improve the business himself.
In 2005, CASA Isenbeck had acquired one of the largest Argentine wineries, Bodegas y Vinedos Orfila, for an estimated USD 10 million in an effort to secure exclusive domestic distribution for its Isenbeck and Warsteiner beer brands. Obviously, little has come of that. CASA Isenbeck’s market share has continued to hover below the 5 percent market share threshold.
According to the official announcement by Warsteiner Brewery, the Orfila winery is not part of the CASA Isenbeck deal with SABMiller.
Instead, SABMiller got the licensing rights to the Warsteiner brand in Argentina on a long-term basis.
CASA Isenbeck’s gross assets are valued at USD 25 million.
Barry Smith, President SABMiller Latin America, commented on the deal: “We are pleased to have added CASA Isenbeck to our Latin American footprint, giving us exposure to the fast-growing and attractive Argentine beer market and complementing our existing Latin American operations.”
SABMiller already has operations in Colombia, Peru, Ecuador, El Salvador, Panama and Honduras.
In Germany, fortunes for Warsteiner Brewery have been mixed. The Warsteiner beer brand had sales of 6 million hl beer in the 1990s. However, volumes have since dropped to 2.8 million hl in 2009, making Warsteiner the number four beer brand in Germany according to Inside’s market report.
Some months ago Warsteiner sold the Frankenheim brewery located in Düsseldorf near the Rhine river to Germany’s Döhler, a producer of natural ingredients. Neither the deal nor the transaction price were ever made public but a Döhler executive confirmed the purchase of the 600,000 hl plant at a VLB conference. Döhler apparently uses the plant to manufacture its malt products.
In Africa, where Warsteiner Brewery used to operate three breweries in Cameroon, Nigeria and Gambia, they entered into a joint venture with Castel and SABMiller in 2008.
After the sale of their last foreign brewery, CASA Isenbeck, The Cramer family says that they plan to grow the Warsteiner brand internationally through co-operations and licensing agreements.
Alas, this announcement will do little towards squashing further sales rumours.
