Let’s go to Rio

Sometimes you don’t seem to be doing things right. In February when Heineken bought Russia’s third largest brewer, Bravo (4.2 million hl) for an estimated US$400 million, did you hear the markets make any noises? Certainly neither squabbles nor consenting grunts were to be heard. But was it not high time that the Dutch brewer had moved into the Russian growth market? After all, everybody else had been there for years. That may be but still the markets were quiet. When in March Heineken reached an agreement with Canadian brewer Molson as concerns the Brazilian market, commentators applauded Molson’s CEO Dan O’Neill on this gutsy move but bickered that Heineken appears to have lost out in yet another acquisition race for fear of overpaying.
Here’s the story.5 per cent, Coca Cola 10..

MBAA moved office

The MBAA international office has moved to the management firm Scientific Societies in St. Paul. The office can be reached via email or tel 001-651-454-7250, fax 001-651-454-0766.

Anheuser-Busch posts record US beer shipments for 2001

Anheuser-Busch Inc., the U.S. beer unit of Anheuser-Busch Cos. Inc., announced that it achieved record U.S. beer sales volume in 2001, and its parent, the world’s top brewer, set a 10 percent earnings per share growth target for 2002.
Domestic beer shipments to wholesalers grew to 99.5 million barrels in 2001, up 1.2 million barrels or 1.2 per cent over 2000, Anheuser-Busch Inc. Chief Executive Patrick Stokes said in a statement. Stokes also said that Bud Light, the top-selling beer in the US, continued its strong sales performance, followed by Budweiser, which is the top-selling brand in the world. For the fourth quarter, beer shipments by Anheuser-Busch to its wholesalers grew 0. St. Louis-based Anheuser-Busch Cos..

The Skyy is the limit

Not tardy to launch new products, Miller Brewing Co. has also teamed up with Skyy Spirits LLC, a San Francisco-based marketer of the "Skyy" Vodka brand, to sell a citrus and vodka-flavoured malt beverage, beginning in March. The Skyy vodka brand is packed in a cobalt blue bottle. Similarly, the malternative, "Skyy Blue", will arrive in cobalt blue bottle and will be sold as a super-premium product at US$7 for a six-pack. According to Beer Marketers Insights, the malternative category sold almost three million barrel in 2001. Most of the growth was attributed to Smirnoff Ice which started the craze January last year. The growth of the category came at the expense of beer brands..

Me too

Anheuser-Busch and Bacardi were the first. Now Allied Domecq PLC and Milwaukee-based Miller Brewing Company announced a commercial partnership to introduce a range of new alternative malt beverages, the first two of which will be based on Allied Domecq’s popular Stolichnaya vodka and Sauza tequila. The new Stolichnaya and Sauza ready-to-drink malt beverage products will be produced and distributed by Miller in the U.S. and will reach the market this spring through over 500,000 retail outlets serviced by Miller’s nation-wide distribution network. As the market develops, both parties will explore further opportunities utilising the Allied Domecq portfolio of core spirits brands..

NBC liquor ads may put a lid on "malternatives"

The TV station NBC’s decision to accept some spirits advertising may upset some viewers by opening the door to similar ads, but, potentially paradoxically, also may help quash the potentially explosive growth of "malternatives" that are so hot with younger drinkers.
The malt-beverage craze, which skyrocketed with "Smirnoff Ice", "Mike’s Hard Lemonade" and other brands, has created so much buzz and taken enough volume from light beers that traditional brewers have been considering their own products in an attempt
to recapture some volume. They’ve also spawned something of an uproar because their sweet taste has wide appeal with underage drinkers.
Smirnoff, in particular, has had an aggressive TV advertising budget..

Darling, I got you a present

No, it was not one of the usual suspects. It was Adolph Coors, the no 3 US brewer, who picked up Carling Brewers at the pre-Christmas sale. Coors is paying Interbrew £1.2 billion (US$1.7 bn) for its Carling Division, which is only US$500 million more than Coors’ market capitalisation currently at US$2.2 billion. The Carling business had an EBITDA of around £150 million, which valued Carling
at an EBITDA multiple of 8 - much lower than Beck’s, for example. Coors said it would finance the deal with about US$200 million in cash and a combination of bank and public debt. The price was in accordance with market expectations.
Still, analysts were not happy with Coors’ choice and its shares fell US$2.98 or 5.0% to US$56.29.
The deal gives Coors a market share of 19%..

Brazil AmBev launches Guarana drink in Puerto Rico

AmBev announced in January that it had launched its fizzy Amazon berry soft drink Guarana Antarctica in Puerto Rico, the second stage in its softly-softly bid to make the brand a global player. According to an agreement signed in 1999, PepsiCo Inc would take care of distribution, whereas AmBev, the world’s fifth biggest drinks company and no 4 brewer by its own reckoning, would in turn distribute Pepsi products in Brazil. AmBev, the product of the merger of Brazil’s two biggest brewers Brahma and Anarctica, said it and Pepsi would split a planned US$1.5 million investment in the promotion of Guarana on the Caribbean island over the next two years. Guarana was available at 12,000 points of sale by September, beating the aim of 10,000 outlets by the end of the year..

Filling its war chest

AmBev, Brazil’s major brewer, said it plans to issue securities in the order of US$500 million in the foreign markets in the near future. The issue will be insured against political risk. AmBev also said that it plans to use the money to refinance short-term debts and to fund acquisitions abroad. It is believed that Argentina’s brewer Qilmes is high on AmBev’s shopping list. Quilmes has 70 per cent of Argentina’s beer market, whereas AmBev has only 16%. Together they would have a comfortable 86 per cent. Such a deal would increase AmBev’s share in the beer markets of Uruguay and Paraguay to nearly 100 per cent.

Tango funebre

The Argentine government have defaulted on their US$ 155billion debt and abolished the dollar/peso 1/1 peg that has been in existence for most of the 1990s. The peso is now officially trading at 1.4 to the dollar and unofficially in Argentina at 1.65 to 1.8. There are no two ways about it: the Argentinian banking system is effectively bust. The economy has collapsed. The government’s ability to raise any money is limited.
According to a report by WestLB Panmure, London, there is a persistent rumour that the Argentinian government are discussing the de facto nationalisation of Repsol’s assets, the former state owned YPF, in an order to boost hard currency income.
"This will have profound implications for the brewing industry," says WelstLB in a recent report..