Schmoozing up to A-B

According to Molson’s Daniel O’Neill, the brewing industry has seen USD25 billion worth of acquisitions since 1999. Big acquirers have often overpaid, with many take-overs costing 12 or more times annual operating earnings he was quoted as saying. In contrast, Molson paid 9.8 times annual operating earnings to buy Brazilian brewer Kaiser. Among the Big Four (i.e. Anheuser-Busch, SABMiller, Interbrew and Heineken) only Anheuser-Busch, which has stayed close to the US market it dominates, has added shareholder value, O’Neill said. Just fancy that.

Sorry, not for sale

And we’d thought that those bullish CEO superstars were a thing of the past. But along comes Daniel O’Neill, 50, CEO of Molson, and announces in September that he is going to double Molson’s profits by 2009. In fact, he wants to make at least CND1 billion in profit before interest and taxes by 2009 - but does not plan any acquisitions in the short term to help him meet that target. "By 2009" ... that gives Molson five years to realise this more than ambitious plan, given that Canada’s largest brewer only posted a pre-tax profit of CND515.6 million for the year to March 2003.
At a recent investor briefing O’Neill showed confident that improving market shares in Canada, Brazil and the US plus entering other export markets would do the trick.S.".

Schincariol’s owner shot dead

Already on 18 August Jose Nelson Schincariol, 60, the owner of Brazil’s third biggest brewery group, Schincariol, was shot and killed when he arrived at home at 10.30 p.m. according to local news services. Two men fired five shots at Schincariol as he stepped out of his car. Schincariol lived in Itu, where the company’s headquarters are, about 130 km to the west of Sao Paulo. Schincariol was inside his garage alone when he was shot. He had no private security guards. Although he was taken to hospital immediately, he died three hours later.
Schincariol headed Brazil’s fastest growing beer business. Founded in 1939, the company produces 13 million hl annually of beer, water and softdrinks and employs about 6,000 people in six plants across the country..

It's hot in the city

An increasingly acrimonious labour dispute has been disrupting Labatt’s operations in Montreal during a crucial season marked by heat waves and festivals. The 950 workers at the Labatt plant in suburban LaSalle, who walked off the job on 16 June, are push

Big ain't always beautiful

140 jobs will be cut when Molson closes the 75-year old Ribeirao Preto brewery in an effort to eliminate overcapacity. Molson announced that, as part of the Projeto Duzentos, Cervejarias Kaiser is closing its oldest brewery. This measure will save about C

.. And the winner is

..."da Brew Man" John Hickenlooper. The founder of Denver’s Wyncoop Brewery who later turned restaurateur was elected mayor of Denver Hickenlooper winning 64 percent of the vote. He beat the city auditor and veteran politician Don Mares, who won 35 percent in the election run-off on 3 June 2003. A political newcomer who ran as an independent, Hickenlooper defeated six other candidates, many of whom had years of government experience. Commenting on his victory, Hickenlooper was quoted as saying: "It’s like having the finest glass of beer and wanting the flavour to linger forever." He promised that he would get to work on budget issues immediately. The new mayor-elect is faced with the task of balancing the budget. The city government is expecting a deficit of USD50 million in 2004..

Have a Santiago

7-Eleven, the largest chain of convenience stores in the US and one of the largest beer retailers as well, plans to bring Santiago, a private-label import from El Salvador, into its shops this summer. The beer is supposed to compete head-on with Corona Extra, the top-selling imported beer from Mexico. 7-Eleven plans to take advantage of two trends in the US beer business: the consumers’ thirst for imports and for competitively priced beers. Priced at USD5,99 for a six-pack, Santiago costs slightly more than a standard domestic brand but less than an import like Corona Extra which the convenience store chain sells at USD6.99 to USD7.99 per six-pack. The seven million people who shop at 7-Eleven each day will probably never find out that Santiago is a private label beer brand..

Too many cooks?

All those millions of people who enjoy the world’s best-selling beer, Budweiser, could they live under the misconception that they also enjoy the world’s most popular beer? Budweiser may deserve all the superlatives it claims. But that does not mean that it is a truly global beer. Or how are we supposed to understand Anheuser-Busch’s latest product launch? At the end of May this year the world’s number 1 brewer introduced Anheuser World Select, a continental pilsner beer into the market. What makes this beer an interesting marketing exercise is its spin. The Anheuser World Select campaign will focus on the brand’s unique creation, supported by the tagline of "Ten Brewmasters. Four Continents. One Beer." The beer which is 5% ABV and is bottled at Anheuser-Busch’s Baldwinsville, N.Y..

Heard it on the grapevine

If you thought, the brewing industry was abuzz with rumours about sales and takeovers, you don’t know the drinks industry. Last month the London papers reported that a US private equity house has shown more than just an interest in Allied Domecq, nicknamed the perpetual bridemaid of the spirits sector. City sources belief that the possible bidder is investment company Texas Pacific, which bought the Burger King business from Diageo in a protracted bid.
Although the news is only speculation at this stage, it makes sense. After all, Texas Pacific might need to diversify some of the operational risk associated with the Burger King fast food business by adding Allied’s fast food operations Baskin Robbins and Dunkin’ Donuts to its stables. First baby steps? Indeed..

Storm in a beer glass

Duopolies make for a happy couple and lots of unhappy bystanders. The same could be said about Canada’s beer market. With Labatt and Molson accounting for nearly 90% of all beer sales, Quebec’s microbrewers have felt for years that they are being squeezed out of the market by their big competitors.
That is why they filed a complaint with the federal Competition Bureau arguing that the big beer boys were pinching them out of the market by hogging the best shelf space in shops and signing exclusivity contracts with pubs, restaurants and clubs.
The agency however dismissed their complaint. Moreover, Labatt denied that it was doing anything wrong.
Some of the microbrewers are not sure it’s time yet to sit down and talk. They hold about 4..