Costly end to accord?

Although a ruling by the International Court of Arbitration of the International Chamber of Commerce is not expected before the autumn, many analysts seem to take it for granted that the rights to import Corona Extra into the U.S. will go to Constellation Brands, which is at present Grupo Modelo’s U.S. importer west of the Mississippi. The ­Gambrinus Company, which until 2006 holds the rights to bring Corona Extra to the East Coast markets, is considered the big looser in this battle.
Analysts have already done their homework and put price tags on Grambinus’ business: Grupo Modelo ending its import accord with Gambrinus comes
at a cost. Some reckon that the Mexican brewer could have to pay out USD 260 million to end its business dealings with Gambrinus.S., Modelo’s U.S..

Ey Chico, pass me the pisco

In an effort to diversify its interests, Chile‘s biggest brewer CCU joined ranks with a pisco producers‘ cooperative that will boost its production of the popular Chilean spirit. CCU and Cooperativa Agricola Control Pisquero, a cooperative of pisco producers, both committed their pisco plants and assets to a new company that will be 80 percent controlled by CCU. According to local media reports, CCU invested USD 27 million in cash into the venture. The deal allows CCU’s share of Chile’s pisco market to grow to 52 percent from 15 percent. Pisco is a distilled grape alcohol used to make pisco sours and other mixed drinks.

SABMiller said beer sales to retailers at its U.S. division Miller Brewing dipped 0.3 percent in the last quarter 2004, but this compared favourably to a U.S. beer industry which saw beer volumes down between 1.5 and 2.0 percent in that quarter. SABMiller blamed the beer volume fall on the rise in petrol prices in the U.S., price discounting in the beer market in December and rising consumption of wines and spirits. Now, what’s new about that?

For some in St. Louis Christmas came early last year. Anheuser-Busch Co. announced shortly before Christmas that it had won ‘an important victory’ in the World Trade Organization (WTO) in its battle to protect the Budweiser brand name against use by a Czech brewer. In a statement Anheuser-Busch President Stephen Burrows said: ‘This decision by the WTO halts Budejovicky Budvar‘s efforts to rely on this registration of "Budejovicke pivo" to justify its use of the Budweiser name.’ By all accounts the WTO ruling implies that the Czech brewer, Budejovicky Budvar, cannot justify its use of the Budweiser name on the grounds that it was the translation of the place name it had registered for exclusive use under the European Union ‘geographic indications’ regime.’.

Heineken USA announced at the end of last year that it had created an independent panel to review complaints about its advertising amid rising scrutiny over the effects of alcohol marketing. The company, part of Heineken NV, said three experts on public policy, advertising and psychiatry had agreed to serve one-year terms on its review panel. Apparently, beer and drinks producers are seeking to shield themselves from potential lawsuits over advertising messages perceived to contribute to alcoholism or underage drinking.

...but only for some. Anheuser-Busch, Inc., the US beer subsidiary of Anheuser-Busch Cos, has said that fourth-quarter beer shipments to wholesalers decreased 1.5 percent. Wholesaler sales-to-retailers were down 0.3 percent for the full year and decreased 3.2 percent in the fourth quarter. However, for the full-year Anheuser-Busch reportedly managed to increase U.S. beer shipments to wholesalers to 103 million barrels (121 million hl) in 2004 – up 400,000 barrels or 0.4 percent over 2003. Its domestic market share, excluding exports, for the full year 2004 was 49.6 percent, compared with a 2003 market share of 49.7 percent. Meanwhile in Golden, Colorado, ­Coors said its U.S.
For the 13-week quarter ending 26 December 2004, U.S. sales volume to wholesalers increased 4.0 percent..

Mexico’s number two brewer FEMSA is expected to grab more market share from its bigger rival Modelo this year as it expands its convenience store chain and considers a cost-cutting merger of its distribution channels.
After gains last year at the expense of Modelo, analysts were reported as saying that FEMSA will chip further away at the maker of the popular Corona beer in 2005, boosted largely by an expected major expansion of its Oxxo convenience store chain.
FEMSA, the brewer of Sol, Tecate and Dos Equis beers, has more than 3,000 Oxxo stores dotted across Mexico, selling its beers alongside soft drinks made by its Coke unit, Coca-Cola FEMSA .
As FEMSA opens more stores, it will sell more beer. Imports are minimal and Mexico only has a handful of microbreweries..

The Gambrinus Co., U.S. importer of Corona, has taken Mexican brewing giant Grupo Modelo to an arbitration court to block the loss of its agreement to import the brewer’s beers. According to the San Antonio-based Gambrinus, Grupo Modelo attempted to buy the importer last year, but when it was rebuffed, Grupo Modelo and its U.S. arm, Procermex, notified Gambrinus that its rights to import Corona and other Modelo brands would not be renewed after 2006.
A decision by the International Court of Arbitration of the International Chamber of Commerce is expected this autumn, according to a Gambrinus statement.
Carlos Alvarez, a former Modelo executive and CEO of Gambrinus, has helped build the Corona brand in the United States over more than two decades.S. sales of the brands.S.S.S.S.S..

Molson Inc. announced at the beginning of February this year that it had received the final court approval for its USD4 billion merger with Adolph Coors Co., after both sets of shareholders voted overwhelmingly in favour of the union.
The merger will create the world’s fifth largest brewer by volume behind Heineken with annual sales of more than USD6 billion. The new company, to be called Molson Coors Brewing Co., will have a 43 percent market share in Canada and 11 percent in the United States, with brands such as Molson Canadian and Coors Light.
On the announcement, shares of Molson rose 7 Canadian cents to CD38.77 on the Toronto Stock Exchange. On the New York Stock Exchange, Coors’ shares fell 11 cents to USD74.90. Well, thanks for that gentlemen.44 a share, up from CD3.26..

In Latin America few men are richer than the patriarch Julio Mario Santo Domingo, 80, Colombia’s top businessman whose net worth the Forbes Magazine estimated to be USD1.4 billion in 2004. On the Forbes list of the world’s richest men he ranked 406. Not bad, ey? Santo Domingo may not only be one of the wealthiest persons alive, he is also one of the most sought after. Through his majority stake of Grupo Empresarial Bavaria, Latin America’s number two brewer, and holding company Grupo Empresarial Valores Bavaria he controls more than 100 companies in a variety of industries from beverages to newspapers, crude oil production and temporary staffing. It is hard to believe that in our dangerous times Santo Domingo is said to be a familiar figure in the international jet set. Says Forbes..