Tag Archives: molson

SABMiller and MolsonCoors to combine U.S. operations

Posted on by
Reply

Associated Press: Molson Coors, SABMiller combine U.S. ops

NEW YORK – The makers of Coors and Miller Lite plan to combine their U.S. brewing operations in an effort to compete better against industry leader Anheuser-Busch.

The joint venture announced [today] will be known as MillerCoors and will have responsibility for selling brands including Miller Lite, Miller Genuine Draft, Coors, Coors Light and Molson Canadian in the U.S.

Anheuser-Busch Cos. accounts for about half of the U.S. market with brands such as Budweiser, Michelob and Bud Light.

SABMiller PLC will have a 58 percent economic interest in the venture and MolsonCoors Brewing Co. will own 42 percent of the new company. They will have equal voting interests, however.

Precise financial terms of the deal were not disclosed.

Shares of MolsonCoors climbed $6.17, or 12.1 percent, to $57 in morning trading Tuesday. SABMiller shares rose 2.3 percent to 1,499 pence ($30.57) in midday trading in London.

The joint venture will also result in cost savings of $500 million, the companies said. That savings will mainly come from reducing shipping distances, finding economies of scale in brewing operations, optimizing production and eliminating duplicate corporate and marketing services.

London-based SABMiller, which brews Miller Lite as well as a slew of European beers, and Denver-based Molson Coors, the brewer of Coors Light and the craft beer Blue Moon, will each have five representatives on its board of directors.

Pete Coors, vice chairman of Molson Coors, will serve as chairman of the new company and Molson Coors Chief Executive Leo Kiely will be the new CEO of the joint venture. Tom Long, CEO of Miller, will be appointed president and chief commercial officer.

Under the terms of the agreement, the companies said they will conduct all of their U.S. business exclusively through the venture.

The companies project MillerCoors will have combined annual beer sales of 69 million U.S. barrels with revenue of about $6.6 billion.

Coors said the joint venture will allow both companies to compete for U.S. consumers who are “looking for greater choice and differentiation,” as wine and spirits continue to entice beer drinkers and imports and craft beers garner a larger share of the market.

The companies said by combining their U.S. operations, the venture will be able to invest more in marketing its brands to consumers and compete more effectively with larger brewers like Anheuser-Busch and InBev NV S.A., which imports a large number of global beers into the U.S. and is the world’s largest brewer by volume.

“Given the highly complementary nature of our U.S. assets, operations and geographic footprint, this is a logical and compelling combination that we expect will create significant value for shareholders while benefiting distributors, consumers, retailers and the market overall,” said SABMiller Chief Executive Graham Mackay.

The companies said the deal will add to both of their earnings in the second full year of combined operations.

The companies said $50 million of the total cost savings will be recorded in the first full financial year after the two companies combine. Another $350 million will be saved in the second year and the last $100 million will come in year three.

The companies added they will have to make a one-time cash outlay of $450 million to achieve those savings.

A final agreement is expected to be signed by the end of 2007 with the deal closing in mid-2008, the companies said.

Rumors of this were circulating back in June.

I guess Mackay’s comments that “Craft Beer Will Fade” really make sense in this context. Wishful thinking indeed. I guess he doesn’t believe that A-B will fade instead.

I can’t see how this is good for beer drinkers. Good for investors, of course, but offering new and better products to consumers is an afterthought.

Molson Coors three years later

Posted on by
Reply

Molson CoorsThe Toronto Globe and Mail offers their analysis of the Molson-Coors merger three years after it was announced.

The verdict? It’s working.

So, while [investors and brokerage firms] were sleeping, here’s what they missed: The merger is working. After a difficult start, Molson Coors has got its act together. It has cut costs, refinanced debt, opened a new brewery in Virginia and sold more silver bullets to beer-drinking Canucks than ever before. The stock market has responded: In the past year, Molson Coors shareholders have made 38 per cent, including dividends, beating returns from Anheuser-Busch and Heineken.

Molson Coors, three years on

Molson Coors

(via Click A Bottle)

Molson Canadian – New at the office

Posted on by
2

So, the message of this commercial is that all of the Canadian stereotypes those of us “south of the border” are familiar with are false?

http://www.youtube.com/watch?v=YuIHuSddlqw

Except, of course, that they’re rabid hockey fans.

I admit that I rather like Bob & Doug McKenzie. I was a pretty big fan of SCTV, even though a good bunch of it went over my head at that age. And, of course, my favorite band is Rush, perhaps Canada’s most famous export. Next to Molson, anyway.

Beer News Sampler

Posted on by
3

Baltika eyes Heineken’s No.1 spot in European beer
Baltika, Russia’s largest brewer, wants to dislodge Heineken from the top of the European beer market, despite a recent slowdown in the Russian domestic market.

Biofuel boom sparks beer price fight
As German barley farmers abandon their usual crops in favor of subsidized biofuel crops, like corn (maize), brewers scramble to keep costs in line to prevent alienating their consumers.

Brewery workers walk off job
More than 100 workers of the Canadian Autoworkers Union walked off the job early at Edmonton’s Molson Coors brewery the morning of May 30. While the company says it has plenty of supply, union leaders think beer drinkers in Western Canada may have a bit of a time of it this summer.

Quick Tip: Leftover Beer
Not that this would ever happen to any of us, but leftover beer can be used to give some extra nutrients to your plants.

Teamsters brewing boycott of Yuengling beer
A typical “he said, he said” scenario. Yuengling workers vote to leave the union. Teamsters strike. Marketplace yawns. The Teamsters claim management threatened to shut down the company and want lawmakers to intervene. The company says that workers decided to decertify on their own.

Anheuser-Busch Brewing Drinking Water
A-B is canning potable water to have available in the event of a major hurricane or other large disaster.

Beer News Sampler

Posted on by
2

Pier 55: Wine is less snobby and beer more sophisticated
Cornell University offers a course entitled “Understanding Wine and Beer”. Traditionally women drink more wine than beer and men the opposite, but recently the gap has narrowed to almost nothing. Wine is less expensive and more accessible, and craft brewed beers are becoming more sophisticated. “No longer viewed as the sole province of the barbarian, specialist brewed beer has become the new fine wine.” Even many of the health effects associated with red wine can also be had from your darker beers.

Tale of two brews
When Molson Coors bought Creemore Springs Brewery in 2005, fans of the craft brewer felt that it was like “a death in the family.” But the megabrewer has given Creemore the autonomy to stay true to their roots.

Drinkers take on brewery in beer battle
Regulars at the Lewes Arms in Lewes, England are fans of locally brewed Harveys Best Bitter beer. However, the pub’s been bought by Greene King who want to stop selling it. This has sparked something of a local revolt. Even the local politicians are weighing in.

Police flush 2,500 cans of beer
A tragedy on so many levels, beer and other alcohol confiscated from an illegal establishment had to be flushed one container at a time by police officers. What a waste of taxpayer money. Of police manpower. Of beer.

Professors debate merits of beer, wine
Faculty at University of California – Davis put on a presentation and debate arguing the merits of beer versus wine, including health effects and trivia.

Plasmax makes beer last longer
Plastic bottles coated with “Plasmax” are as good as glass, according to the German brewing institute Versuchs- und Lehranstalt für Brauerei. To me, beer in plastic is just wrong. I suppose the Miller Lite served at the stadium or all those college keg parties with Solo cups have just ruined the idea for me.

Is beer by megabrewers automatically bad?

Posted on by
Reply

As you are no doubt aware, large brewers often have multiple brands. Some may be marketed as “premium” compared its more famous brand (e.g., Michelob vs. Budweiser), some are marketed as more economical (e.g., Busch vs. Budweiser) and some to appeal to one or other demographic category that traditionally eschews beer (e.g., Michelob Ultra, Mike’s Hard Lemonade*). In many cases, the big brewer tries to hide that it’s actually the brewer, using different company names that coincidentally have the same address of the parent brewer.

A couple of news items in the beer industry in the last couple of weeks (Rolling Rock acquired by Anheuser Busch and Latrobe brewery shut down, Sapporo buys Sleeman’s) plus a review I wrote about Blue Moon Belgian White got me thinking about this. Do so-called beer connoisseurs automatically turn their noses up at a beer just because it was made by Anheuser Busch, SABMiller, Molson Coors, et.al.? Because I knew it was made by Coors, was my review of Blue Moon totally fair?

The answer to the first question is, in many cases, yes. Take a look around the beerblogosphere and you’ll see plenty of bashing of anything touched by the “taint” of a megabrewer. Even here, where we try to maintain an open mind and enjoy beer for what it is, not necessarily for who made it, we’ve been known to look askance at some brews no matter what.

Really, though, is that right? Isn’t that the same sort of bourgeois attitude we beer-drinkers have endured for decades from obnoxious oenophiles? Okay, yes, if a company is involved with “blood diamonds”, or sweatshops, or polluting, or accounting fraud, or exploitation, or predatory pricing, or any of a hundred other bad behaviors, then go ahead and not buy their products. But how often is a brewer caught up in stuff like that? If the beer is good (to you) and you like it, who cares who the brewer is?

In answer to my second question: I don’t know. As I said I try to keep an open mind. I am a big NFL fan, so I get “treated” to advertising from the very biggest brewers. I think some play fast and loose with laws regarding marketing to young people, and for the most part they are insulting to my intelligence. But I don’t buy their beer simply because I’ve had it and I don’t like it (any more), not because I am rebelling or because of snobbishness. I believe that I am beyond the simplistic “this (craft brew) is good beer and that (megabrew) is not” way of thinking. I do not like the bland, adjunct-filled offerings of the big brewers, but that’s not to say I don’t enjoy the occasional Killian’s Irish Red, for instance.

So I say to you: If you drink beer for the taste, if you enjoy trying new beers and styles, if you like finding new and better ways to enjoy your beer, then to heck with where it came from or what other people say about it. You’re our kind of people.

* While it is ultra-filtered, purified, and has all kinds of syrupy flavors added, it is a “malt beverage” and begins life as malted barley. It, and others of its ilk, is technically and legally beer.