Higher prices, yes thank you

Anheuser-Busch Co., reported a 9.8% rise in first quarter net income and predicted similar results for the rest of the year, benefiting from a strong volume increase and beer price hikes. The St. Louis brewer announced net income of US$ 350.3 million compared with US$319.1 million in the year-earlier period. Revenue rose 4.7% to US$2.81 billion from US$2.69 billion. The results were helped by a 2.2% rise in domestic beer volume to 23.7 million barrels despite a price increase in February. International volume rose 15% to 1.5 million barrels due to gains in China and Britain.

That certain feeling

Miller Brewing Co. has rolled out nationally three brands in plastic bottles. Miller Lite, Miller Genuine Draft and Icehouse are sold in 16- and 20-ounce plastic bottles. While Miller Lite and Icehouse are packaged in brown plastic bottles, Miller Genuine Draft is packed in a clear bottle. Miller began test marketing the plastic bottle in October 1998. Whereas Anheuser-Busch in 1999 decided to suspend its plastic bottle tests and Coors continues to explore the possibility, Miller went ahead with a national release. Plastic bottles will account for no more than 2% of Miller’s US sales this year.

One to go

Miller Brewing Co. has reshuffled its speciality beer portfolio, buying the remaining stake in the Celis Brewery Inc., an Austin, Texas-based brewer that was partly owned by Miller. In a related development, Miller sold its interest in the Shipyard Brewing Co., a Portland, Maine-based company. Terms of the deal were not disclosed. Miller bought stakes in both Celis and Shipyard in 1995 when craft brewing was all the rage. In 1999, Shipyard sold 24,000 barrels and Celis 15,000 barrels beer. This restructuring of the portfolio leaves Miller with only two speciality brewers in its portfolio: Leinenkugel and Celis. Miller’s US sales volume in the US in 1999 was 43.3 million barrels.

American Beer Month

July is to be the American Beer Month, a national promotional campaign initiated by the Institute for Brewing Studies (IBS), Boulder, to raise the awareness of the variety and quality of American craft beer. The American Beer Month will provide many different avenues for celebration and promotion by brewers, brewers guilds, wholesalers, restaurants and other brewing-related companies across the nation. According to the IBS, 21 brewing organisations from throughout the US have given their endorsement of the American Beer Month campaign. For further information, see www. beertown.org.

No, we were not amused

In May, the Oregon Brewers Guild, representing 35 independent craft brewers, expressed its disappointment with Anheuser-Busch’s recent radio ad campaign for Michelob Amber Bock. According to the open letter sent to Mr Busch, the ad which depicts a consumer pouring a micro beer down the drain instead of into a glass was not only inaccurate but also not in the best interests of the US-American brewing industry. The letter also complains about the ad’s contention that micro beers were "just too bitter" and points out that in the face of increased competition from imports, craft brewers and major brewers should promote the positive contributions of all of America’s brewers and not sling mud at each other.

Export boom

During the first quarter 2000, Grupo Modelo, the brewer of Corona Extra, registered a 5.6% growth (to 6.0 million hl) in the domestic shipment of beer. Even exports were up 6.2% to 1.96 million hl in spite of the high base of comparison from the first quarter 1999 which grew 42.7%.
Carlos Fernández, Grupo Modelo’s CEO, declared: "We expect that this growth trend will increase in the following months, since the sales of our products in the North American market are still growing above the import beer category."
With domestic sales reaching 4.2 billion pesos and exports 1.4 billion pesos, total net sales were 6,17 billion pesos (US$ 646.6 million), an increase of 8.1% reflecting the price increase implemented at the beginning of the year. Operating income was 1.5 billion pesos (24..

It’s ours

Bavaria, one of Colombia’s largest listed company, bought a 45% stake in its domestic competitor Leona, thus fending off the threat of a powerful international brewer entering the Colombian beer market. Leona was operating at 25% of installed capacity and had about 8% of the market.
The deal gives Bavaria access to Leona’s modern brewery and paves the way for a large-scale restructuring of the industry which has been plagued by overcapacity, made worse by an economic downturn, for some time now. In return for the stake Bavaria will issue shares to the Ardila Lülle group, the owner of Leona. No value for the deal was given but it is believed that Bavaria could pay about US$100 million for the stake..

New CEO

Molson Inc., has announced the appointment of Daniel O’Neill as president and CEO, replacing James Arnett who will step down at the company’s annual meeting on 27 June. Mr O’Neill joined the brewer in 1999 as COO and has played a key role in transforming the former conglomerate into a focused brewing company. The brewer announced that it lost CAN$44 million last year as restructuring costs of CAN$224 million offset strong growth in operating profits.
The Montreal-based brewer posted operating profit of CAN$77 million (US$52.2 million) up from CAN$50.8 million. Annual revenue rose 19% to CAN$2.5 billion (US$1.69 billion). For the fourth quarter Molson posted a profit of CAN$38.1 million. Molson said that its market share for the fiscal year increased to 45.1% from 45.0% to 20..

Cade spoke ...

AmBev has signed an agreement with the Justice Ministry’s anti-trust council, Cade, which specifies the criteria under which the merger between of Brazil’s two major brewing companies can finally receive the official nod of consent. The agreement says that AmBev must sell off the Bavaria brand, share its distribution network, and sell five plants spread over five regions of the country which have a total production capacity of about 7 million hl. All these assets must be sold to a company with less than 5% market share in the domestic beer segment. The whole pro-cess is supposed to be completed within eight months. Bavaria has a market share of presently 4.7% which values the brand at an estimated R$400 million (US$223 million)..

New developments at the Siebel Institute

In an Open Letter to the brewing industry and their customers, dated 23 March 2000, the board of the Siebel Institute, Chicago, announced that despite some misleading information issued in February, the 128-year-old Institute would continue with its spring and autumn courses with existing staff and extended family. This had been made possible by the board accepting a bid put together by Ron Siebel, Chairman and CEO of the Siebel Institute, Siebel staff and faculty and Lallemand USA, Inc. With Lallemand, Siebel has past working relationships in the areas of yeast and yeast nutrients. The board rejected a bid by Alltech Inc., Nicolasville, Kentucky.