Purchase cleared

The Brazilian authorities have finally given the green light to Canada’s brewer Molson and its takeover of the Kaiser beer company. Molson said in a statement that the competition authority considered "the transaction as beneficial to competition in the national beer market." The purchase of Kaiser for US$765 million made Molson the second-largest brewer in Brazil and the 13th in the world. In Canada, Molson produced 11.3 million hl beer in fiscal 2001. Irrespective of the bad news coming out of South America, central and south American beer sales will continue to rise in the medium term future, according to a new report by beverage industry analysts Canadean. The report claims that low per capita consumption levels provide scope for volume demand to rise by almost 20 percent by 2007..

Kiss good-bye

Milton Hershey would have been outraged - or perhaps not. In any case, we shall never know if the inventor of the famous chocolate sweet, Hershey Kisses, would have condoned plans by the Hershey Trust - a charitable trust the childless Milton set up in 1905 to fund a boarding school for the poor – to sell the Trust’s controlling stake in Hershey Foods, America’s largest chocolate maker.
After months of reviewing several bids, the board members gave in to protests from employees and others and dropped their plan to sell their stock valued at USD12.5 billion. The Trust has almost 60 percent of its USD5.4 billion of assets tied up in Hershey Foods’ shares.
For once, morals have won over profit..

Loosing it at the movies

Pauline Kael, the most distinguished American film critic, lost her illusions about movies at the movies. Coors’ executives have never had any illusions about the film industry or they would have thought twice about signing a deal with Miramax Films, a division of Walt Disney Co.
Miramax, the maker of Oscar-winning arthouse films such as "The English Patient" and "Shakespeare in Love" and Coors Brewing Co. announced a three-year marketing alliance which makes Coors a promotional partner in Miramax films. For an undisclosed sum, Coors will be the official sponsor of Miramax film premieres in the US. The deal also allows Coors to place its products in at least five Miramax films a year while Coors’ competitors will be kept out..

Anheuser-Busch rolls out low-carb beer

At the end of September, Anheuser-Busch rolled out its new low-carbohydrate beer, Michelob ULTRA. The brewer claims that the new beer is low in carbohydrates. A 12-ounce bottle of ULTRA has 2.6 g of carbohydrates, compared with 6.6 g for Bud light. They contain the same amount of alcohol, though - 4.2 % ABV. The brand was test-marketed in Denver, Tucson, Chicago, Baltimore, Washington D.C. and Florida. Michelob ULTRA is the most recent addition to the Michelob family of beer which now consists of 10 brands. In 2000, Michelob Light was the 13th most popular beer brand in the US, Michelob ranked 19th. Unlike Budweiser and Bud Light, which are both premium brands, the Michelob brands are positioned in the super-premium segment.

Interbrew to buy US marketing rights for Bass Ale

Guinness Bass Import Company (GBIC), Diageo’s importing and marketing arm, will relinquish its 1998 US importation and distribution rights for Bass Ale. The rights will pass to Interbrew, Bass’ new parent, on 30 June 2003 for a sum of USD105 million. Under the 1998 agreement, GBIC had the right to sell and market the brand in the US until July 2016. In the US, Bass Ale is considered a super premium brand and during fiscal 2001, GBIC sold around 7.5 million cases (600,000 hl).

Heineken expands in Central America

Heineken’s recent shopping spree bears certainly analogies to London busses: First there are none for hours and then 20 come along at once. So if this issue’s news section reads like Heineken’s shopping list - we are only fulfilling our duty as chroniclers.

SAB-Miller deal completed

At the beginning of July, SAB’s shareholders approved of the US$5.6 billion deal to buy Miller Brewing Company which was announced on 30 May 2002 ending months of rumour and speculation. The deal called for London-listed SAB to pay US$3.6 billion in shares to cigarette maker Philip Morris, the parent of Miller Brewing Co., and take on US$2 billion of debt. Philip Morris retains a 36 per cent interest in the brewer, which is called SABMiller Plc. In a regulatory filing, Philip Morris, the world’s No. 1 tobacco company, said it would be entitled to a break-up fee of US$160 million if SAB did not obtain shareholder approval for the deal by 8 July 2002, or if the transaction were not completed by 31 July 2003.

Very deep pockets

Want to ring home? No problem. Since 10 July 2002, Labatt Breweries has been offering a new service providing people of legal drinking age in select cities across Ontario with free, unlimited long-distance telephone calls. The service is called Labatt Blueline and is supposed to run throughout the summer. According to a corporate statement, Labatt has teamed up with Onlinetel Corp. Theirs is an Internet-based, phone-to-phone technology, which enables the majority of Ontario residents to call their friends in select towns and cities across the province for free, at any time of the day, for as long as they want, as often as they want. The service can be accessed from both cell phones and touch-tone land-line phones. Users can register for a personal PIN code at www.labattblueline.com.

Guinness shuts down two plants

Following the joint deal between Diageo and Pernod Ricard to buy Seagram Spirits and Wines in December 2000, Guinness UDV Canada, a division of Diageo, ended up with more bottling plants than it needed. A bottling plant in west Toronto is to go early next year with the loss of 55 jobs and another bottling operation in LaSalle, Quebec, will be shut down late 2003 or early 2004 with the loss of 210 jobs. Guinness will keep four plants open with a total sales and manufacturing staff of about 1,000 people.

Molson to close three plants

When Molson reported its profit expectations for 2002 some months ago, the cost cutting programme did not say "close three Brazilian plants!" But this is what the Montreal-based brewer intends to do. In March 2002, Molson paid US$765 million for Brazil’s second largest brewer Kaiser and combined it with its existing Brazilian operation, Bavaria. Now Kaiser is going to shut down the breweries at Getulio Vargas, Camacari and Divin- opolis and change its Ribeirao Preto plant to produce cans. Irrespective of concern over Brazil’s currency instability, the market believes that the situation will not have a serious impact on Molson’s operations.