InBev USA sells Rolling Rock brands to Anheuser Busch

Lo and behold: Anheuser-Busch decided to buy the Rolling Rock family of brands, thus taking a big worry off InBev’s U.S. shoulders. The purchase price, which was announced in May 2006, was USD 82 million for the U.S. and worldwide rights to Rolling Rock and Rock Green Light....

Norman, the conqueror

In a rare piece of hagiography, the U.S. business magazine BusinessWeek in a recent issue hailed Norman Adami as a Cesar-like figure: As if he had coined the phrase “veni, vidi, vici”, Norman Adami, the head of SABMiller’s U.S. division, was congratulated upon having orchestrated almost single-handedly Miller’s turnaround. Still, upon the release of SABMiller’s full-year financials until March 2006, SABMiller cautioned on severe price cutting in the U.S. hitting Miller and rising costs for aluminium and energy. ...

Fighting obesity

Former U.S. president Clinton called it an “important announcement and a bold step forward”. In May 2006, the Alliance for a Healthier Generation – a joint initiative of the William J. Clinton Foundation and the American Heart Association – issued guidelines in conjunction with Cadbury Schweppes, Coca-Cola, PepsiCo, and the American Beverage Association which will cease the sale of sugared soft drinks to American schools by 2010. Under these guidelines, only lower calorie and nutritious beverages will be stacked in coolers, a move affecting close to 35 million pupils and students across the country.

For appearance’s sake

In June 2006 it was announced that the famous Chicago brewery Goose Island has signed a distribution agreement with Widmer Brothers Brewing Company of Portland, Oregon. This agreement is to be followed by Widmer taking a minority investment in Goose Island of up to 35 percent according to sources close to the action. On the face of it, the deal looks like two successful microbreweries throwing in their lot with each other. Beer Marketers’ Insights say that Widmer, founded in 1984, brewed 270,000 hl of beer last year and Goose Island, founded in 1988, brewed 64,000 hl. Sales of Goose Island grew 24 percent in 2005, led by its signature brand Honkers Ale. Reports in the local media claim that Goose Island turned over USD 4.2 million in beer up from USD 3.4 million in 2004.

Embrace the monster

At the end of March 2006 news began to filter through that Anheuser-Busch Cos. Inc. was in discussions to jointly release an energy drink with Hansen Natural Corp. and possibly buy the company. Hansen, the maker of Monster energy drinks, and Anheuser-Busch seem to be considering a variety of collaborations, from launching an alcoholic energy drink to adding Hansen’s non-alcoholic energy brands into Anheuser-Busch’s distribution network. An outright acquisition of Hansen by Anheuser-Busch is not completely out of the question.

No two ways about it

Following the arbitration court’s ruling in March 2006, Mexico’s Corona beer brewer Modelo has the best part of a year to find a new partner in the U.S. who can help it squeeze more profits from its already-booming exports to the East Coast states. Early in March an arbitrator ruled in Modelo’s favour in a contract dispute, saying it could terminate a deal with its long-standing U.S. importer, the Gambrinus Co., at the end of 2006. Since 2004 San Antonio-based Gambrinus Co has been trying to block the termination clause in its contract with Modelo. Modelo, half owned by Anheuser-Busch, works with another U.S. importer, Constellation Brands, in other parts of the U.S. Thanks to Gambrinus’ and Constellation’s efforts, Modelo’s exports increased 12..

On the block

Fix it, sell it, or kill it. Is that all they teach them at business schools these days? Apparently, in their quest for ever higher margins, InBev’s powers-that-be know no other way out when dealing with a brewery that is not delivering “stellar performance”. Now it’s “fix it or sell it” for Rolling Rock, InBev’s only U.S. brewery. Rumour has it that InBev is looking to sell its U.S. domestic beer brand Rolling Rock after struggling to revive the iconic brand over the last decade. InBev has decided to concentrate its U.S. sales and marketing resources on imported brands such as Bass, Brahma and Labatt Blue, as well as Stella Artois and Beck’s, which means that it might sell the Latrobe Brewery in Pennsylvania, where Rolling Rock is being brewed, and keep the brand. Alternatively, InBev might sell the whole lot, lock stock and barrel, which might fetch an estimated USD 50 million to 100 million, depending on any cost-saving synergies available to a purchaser. Pundits claim that Rolling Rock is unlikely to attract bids from the top three U.S. brewers, but might attract attention from smaller players. Rolling Rock has been brewed at Latrobe since 1939 and has a strong following among beer drinkers in the north-eastern U.S. InBev came into possession of Rolling Rock when it purchased Canada’s second-biggest brewer Labatt in 1995, but according to media reports its

SABMiller buys Backus

When SABMiller last year completed its acquisition of Colombian-based Bavaria brewery, Backus become an indirect subsidiary. Therefore it was just a matter of time before SABMiller would try to mop up the rest of backus’ shares. At the end of March 2006, SABMiller had completed an 89.5 percent acquisition of the investment shares of Peru’s largest beer maker, Backus & Johnston, for USD 361.6 million. The London-based brewer had made the offer on the Lima stock exchange for 12 trading days for 100 percent of the investment shares of Backus at a price of 2.47 soles (USD 0.74 cent) per share in cash, which represents a 20 percent premium on the Backus investment share price before the offer was announced.

Only one more rung on the corporate ladder

At the end of January 2006, Muhtar Kent (53) was promoted to the newly created post of international operations president of the Coca-Cola Company, having previously been responsible for Coke’s markets in Russia, China, Japan, Central Asia and the Middle East. This promotion makes him the effective number two in the Coca-Cola Company as in his new post, Kent will be responsible for all operations outside North America, and all group presidents outside North America will report to him rather than to Neville Isdell (62), the Chairman and CEO of Coca-Cola. The international operations accounted for more than 70 percent of Coke’s volume last year and 80 percent of its operating income, the company said in a release.

Nice if you can

Grupo Modelo, the number one Mexican brewer and the maker of Corona Extra beer, expects domestic sales volumes rising in line with economic growth in 2006, which has been forecasted to reach 3.5 percent. According to reports, the brewer has no plans for the moment to push through a price hike in exports, which mainly go to the United States, even though domestic prices were bumped up in January 2006 in line with inflation. Mexico‘s annual inflation rate fell to 2.9 percent at the end of November 2005 but is expected to climb to 3.5 percent.