SABMiller and Warsteiner getting cosy: Comment
To rule out any misunderstanding: We do not think that SABMiller is even remotely interested in buying Germany’s Warsteiner Brewery. Why should SABMiller invest in the low-margin German beer market which has already bogged down its rivals AB-InBev and Heineken?
Nevertheless, we are convinced that a tie-up with SABMiller in other markets could make sense for Warsteiner, whose export business is in trouble. In 2009, export volumes of the Warsteiner pils brand declined 10 percent to 580,000 hl says Inside, a German trade publication.
In the U.S., Warsteiner Brewery sells less than 100,000 hl beer, down from a peak of 140,000 hl (estimates) several years ago. Finding distributors willing to take on the brand has become an uphill struggle. Warsteiner’s worries have compounded in recent weeks with the departure of an executive at Warsteiner’s U.S. agency.
We are not guessing wildly if we say that it would take a big worry off the Cramer family’s brows if the MillerCoors system (the U.S. joint venture between Molson Coors and SABMiller) took on the Warsteiner brand eventually.
From what we hear MillerCoors has decided to promote Peroni instead of Pilsner Urquell in the U.S. on-premise. Perhaps MillerCoors might be persuaded to do the same for Warsteiner.
The same SABMiller could be willing to undertake in Africa. Warsteiner Brewery has always maintained that it struck a deal with France’s Castel in Cameroon, Nigeria and Gambia, when it abandoned plans to go alone in Africa in 2007. However, people familiar with the situation say that the 2008 joint venture between Warsteiner and Castel was actually a three party deal, including SABMiller.
Irrespective of whether SABMiller will ultimately buy out Castel in Africa, SABMiller and Warsteiner are certainly free to take the licensing agreement for the Warsteiner brand (currently limited to the three territories covered by the joint venture) to other African markets where SABMiller operates solo.
Of course, at present this is all idle twiddle twaddle. Perhaps not for much longer.
