• Anheuser-Busch InBev rebuys Oriental Breweries

    No Anheuser-Busch

     

    AB is at it again.  The big just want to get bigger.

    Anheuser-Busch InBev, the maker of Budweiser, says it has agreed to repurchase South Korea’s Oriental Breweries from private equity firms for $5.8 billion.

     

    AB InBev, the world’s biggest beermaker, never really wanted to part with the leading South Korean brewer, but decided to sell it in 2009 to KKR and Affinity Equity Partners for $1.8 billion, as part of a strategy to reduce debt during the financial crisis. The deal has proved highly lucrative for the private equity firms.

     

    Oriental Breweries is known for the Cass brand, South Korea’s biggest seller. InBev said Oriental Breweries had around $500 million in core operating profits in 2013.

    Source: http://www.usatoday.com

  • Anheuser-Busch Sued Over ‘Hold My Beer’ Videos

    No Anheuser-Busch

     

     

    A Montana-based craft brewer is suing the world’s largest beer-maker, alleging that popular YouTube videos for Bud Light violate its trademarked phrase, “Hold my beer and watch this.”

     

    Big Sky Brewing Co. filed its lawsuit against Anheuser-Busch in U.S. District Court in Missoula, Mont. The company says it has used the slogan since at least 2004, and has a trademark.

     

    At issue are three videos on Bud Light’s official YouTube site created by actor John Krasinski, best known for playing Jim Halpert on NBC’s The Office, and his business partner, Danny Stessen. The videos depict odd things that might happen after asking someone to hold your beer. In one, a woman celebrating her 100th birthday feigns death after asking a young man to hold her beer, then after the man and his friends leave, she high-fives and laughs with another elderly woman.

     

    The videos debuted about a month ago and, as of Tuesday, had nearly 5 million views. The videos are online only and do not air on television.

     

    Big Sky’s lawsuit includes photos of cans of one of its brews, the back reading “Hold my beer and watch this.” The suit, filed Dec. 20, seeks unspecified damages.

     

    Neal Leathers, president of Big Sky and one of the founders, said the Missoula-based company is “engaged in negotiations with Anheuser-Busch to try and get this resolved. Until something’s actually been resolved, we’re just sort of taking the no-comment route.”

     

    An Anheuser-Busch official, in an emailed statement on Tuesday, stood behind the videos.

     

    “These humorous Bud Light videos explore the unexpected things that could happen when you ask someone to hold your beer,” said Rob McCarthy, vice president of Bud Light marketing. “There is no trademark use of the phrase ‘Hold my beer and watch this,’ nor is there intent to create any association with Big Sky. Countless other videos and jokes use the same or similar words as a punch line or hashtag.”

     

    InBev, of Belgium, purchased Anheuser-Busch in 2008, but the company retained St. Louis as U.S. headquarters. The company makes several top-selling beers, including Bud Light and Budweiser. Anheuser-Busch InBev commands 47.6 percent of the U.S. beer market.

     

    Big Sky offers several craft beers with such names as “Moose Drool,” ”Trout Slayer” and “Slow Elk.” The company website says it is the nation’s 50th largest brewer with sales of around 45,000 barrels of beer in 2012. Big Sky brews are sold in 24 states.

    Source: http://money.msn.com/

  • Americans No Longer Want to Drink These 9 Beers

    No Anheuser-Busch

    As craft beer consumption continues to rise, the fall of big beer comes closer at hand.

    While craft beer may seem to be all the rage these days, the number of people cracking open a cold one has actually been on the decline.

     

    According to Beer Marketer’s Insights, beer sales have slipped 2.3 percent between 2007 to 2012.

     

    Michelob Light has been a big loser, plunging 70 percent, while the once top-selling Budweiser, declined by more than 25 percent over the past five years. Miller Genuine Draft, Old Milwaukee and Heineken Premium Light are also losing market share.

     

    Part of the decline is attributed to people switching to wine and spirits — especially the flavored brands.  “The [beer] brewers have dabbled in that, and have had some success with, for example, Redd’s Apple Ale, but nowhere near the success that flavored vodkas and flavored whiskeys have had,” Eric Shepard, executive editor at Beer Marketer’s Insights.

     

    The website 24/7 Wall St. looked at the research from Beer Marketer’s Insights and identified nine beers Americans no longer drink.  Here they are:

     

    9. Labatt Blue- Sales loss (2007-2012): 28.3 percent
    8. Budweiser-Sales loss (2007-2012): 28.8 percent
    7. Heineken Premium Light- Sales loss (2007-2012): 36.7 percent
    6. Milwaukee’s Best Light- Sales loss (2007-2012): 39.7 percent
    5. Old Milwaukee- Sales loss (2007-2012): 54.0 percent
    4. Miller Genuine Draft- Sales loss (2007-2012): 56.4 percent
    3. Milwaukee’s Best Premium- Sales loss (2007-2012): 58.5 percent
    2. Budweiser Select- Sales loss (2007-2012): 61.5 percent
    1. Michelob Light- Sales loss (2007-2012): 69.6 percent

     

    According Shepard, the trend doesn’t appear to be changing. “The history of beer brands in the U.S. has generally been — and there are exceptions — once they start to decline, it’s very, very difficult to reverse it.”

     

    Guess it’s time to start stockpiling your favorite beer before it disappears all together.

    Source:  http://www.foxnews.com/

  • With Legal Weed Comes Hemp Beer

    Producers of Joint Effort covered their label in references to marijuana and made their pull handles out of bongs.

    Producers of Joint Effort covered their label in references to marijuana and made their pull handles out of bongs.

     

    Marijuana’s legalization in Colorado and Washington has led to a boom market of growers, sellers and investors seeking to cash in as the long-illicit drug goes legit. And then there’s the ancillary market. Cannabis swag has been flourishing in each state, with the leaf appearing on everything from throw pillows to key fobs.  So it should come as little surprise that breweries are riding the green wave.

     

    As Washington processes its first applications for pot-related business licenses, local store shelves are being stocked with 22 oz. bottles of Joint Effort, a hemp beer crafted by two local breweries to evoke the aroma of weed. The name is a double entendre about their collaboration and the drug that was legalized there last November. It’s also part of the reason that the brew can be sold only in the Evergreen State.

     

    Beer brewed with hemp, a botanical cousin to hops, can be (and has been) sold elsewhere in the U.S., so long as it tests negative for mind-altering THC. But a hemp brew’s label can’t contain any slang or graphics “implying or referencing the presence of … marijuana” if it’s going to be approved by the federal government for sales across state lines. Joint Effort, made by Redhook Ale Brewery and Hilliard’s Beer, is decorated with the tag line “a dubious collaboration between two buds.” And those puns, a company spokesman says, were enough for the Alcohol and Tobacco Tax and Trade Bureau to reject their label application. That left the brewers to sell their resiny ale at home, where the state liquor board approved.

     

    The beer’s presence in bars makes the labels seem subtle by comparison. Pull handles that barkeeps yank to serve drafts of the brew are made out of actual bongs, purchased straight from local head shops. “We’re taking the whole passage of the law and celebrating the fact that we can do something legally that other states can’t,” says Matt Licklider, Redhook’s senior director of brewing and quality. Yes, they could sell their THC-free beer in other places if they toned down the look, but that would defeat the point, he says.

     

    Joint Effort was first sold on tap in July 2013, with bottles following in late October. So far, it’s available at 85 locations, including stores such as Safeway and restaurants like Red Robin. Redhook brand manager Karmen Olson says they plan to sell it through March 2014 and may extend the run if there’s popular demand.

     

    Though Redhook is now part of the larger Craft Brew Alliance, both that brewery and Hilliard’s were founded in Washington. The two companies were brainstorming on ways to collaborate soon after Initiative 502 passed in November 2012. Throwing ideas around over beers, they decided an ode to marijuana was in order. It certainly didn’t hurt to capitalize on the buzz of passing historic legislation either. The 22 oz. bottles are being sold at a price only novelty could justify: $3.99 to $5.99 a piece.

     

    This isn’t the first time Redhook has run a campaign to “acknowledge that we live in a cool progressive state where stuff like this happens,” as Olson says. Last November, voters also passed a referendum that made gay marriage legal. The company, which sells a Long Hammer IPA, put out a celebratory ad with a giant equals sign. “Redhook supports equality,” it read. “Because two Long Hammers are better than one.”

    Source: http://nation.time.com/2013/11/21/with-legal-weed-comes-hemp-beer/

  • World’s Strongest Beer

    snake_venom

     

    There’s a new brew in town that claims to be the strongest beer in the world.

     

    Snake Venom –the latest creation from Scottish-based Brewmeister – has concocted a beer with a whopping 67.5 percent ABV, beating out the former title holder Armageddon made by the same brewery at 65 percent ABV.

     

    Brewers Lewis Shand and John McKenzie told Scotland’s Daily Record that they created Snake Venom after customers said that Armageddon was “too weak.”

     

    “Some even said they didn’t believe it was 65 percent, so this time we thought we’d go full out. We were too nice last time,” said Lewis.

     

    They said the beer took nine months to develop and was brewed with smoked peat malt and two varieties of yeast, one beer and one Champagne.  Like other beers that have pushed ABV boundaries, they used a technique where they freeze during the fermentation process – sometimes several times.

     

    Snake Venom is the latest beer in which brewers try to outdo each other by creating stronger and stronger beers.

     

    Scotland’s Brewdog first produced Tactical Nuclear Penguin at 32 percent ABV. German-based Schorsbrau retaliated by releasing Schorschbock at 40 percent, followed by Brewdog releasing Sink the Bismarck at 41 percent, and it went from there.

     

    Last year, Brewmeister’s Armageddon crossed into the 60 percent ABV mark.

     

    The brewery’s latest creation, Snake Venom, comes with a yellow warning label and drinkers are cautioned that the brew is meant to be sipped, not chugged.

     

    Source: http://www.foxnews.com/leisure/2013/10/24/theres-new-worlds-strongest-beer/

  • Craft Beer Industry Goes Flat During Government Shutdown

    beer-money

    The federal government shutdown could leave America’s craft brewers with a serious hangover.

     

    Stores will still offer plenty of suds. But the shutdown has closed an obscure agency that quietly approves new breweries, recipes and labels, which could create huge delays throughout the rapidly growing craft industry, whose customers expect a constant supply of inventive and seasonal beers.

     

    Mike Brenner is trying to open a craft brewery in Milwaukee by December. His application to include a tasting room is now on hold, as are his plans to file paperwork for four labels over the next few weeks. He expects to lose about $8,000 for every month his opening is delayed.

     

    “My dream, this is six years in the making, is to open this brewery,” Brenner said. “I’ve been working so hard, and I find all these great investors. And now I can’t get started because people are fighting over this or that in Washington. … This is something people don’t mess around with. Even in a bad economy, people drink beer.”

     

    The Alcohol and Tobacco Tax and Trade Bureau, or TTB, is a little-known arm of the Treasury Department. The agency will continue to process taxes from existing permit holders, but applications for anything new are in limbo.

     

    “One could think of this shutdown as basically stopping business indefinitely for anyone who didn’t have certain paperwork in place back in mid-August,” said Paul Gatza, director of the Brewers Association, which represents more than 1,900 U.S. breweries.

     

    A woman who answered the phone Oct. 2 at TTB’s headquarters in Washington abruptly hung up after explaining that the government was shut down. Assistant Administrator Cheri Mitchell did not respond to telephone or email messages.

     

    The shutdown began Oct. 1 after a group of House Republican lawmakers blocked a budget deal in a last-ditch effort to stop funding for President Barack Obama’s health care law.

     

    The closing isn’t expected to have much effect on industry giants such as MillerCoors or Anheuser-Busch. They can continue to produce existing products as usual. But the shutdown poses a huge problem for craft brewers, who build their businesses by producing quirky, offbeat flavors and introducing new seasonal beers, sometimes as often as every quarter.

     

    Craft brewers around the country say TTB was taking as long as 75 days to approve applications before the shutdown. Now they’re bracing for even longer waits. And tempers are flaring.

     

    Tony Magee, owner of Lagunitas Brewing Co. in Petaluma, Calif., posted messages on his Twitter account this week ripping the shutdown.

     

    “(Expletive) Feds are gonna shut down the already incompetent .Gov while hundreds of small breweries, including us, have labels pending. Nice.” That was followed with “Wanna regulate? Perform or get out of the way.”

     

    Lagunitas Chief Operating Officer Todd Stevenson called the TTB shutdown a “headache.” He said the company was planning to submit an application to package its autumn seasonal Hairy Eyeball in 22-ounce bottles instead of 12-ounce bottles but can’t move forward.

     

    “It’s just aggravating,” Stevenson said. “It is frustrating that government can’t do its job. Doing what they’re doing now is unprecedented.”

     

    Bryan Simpson, a spokesman for New Belgium Brewing in Fort Collins, Colo., said his brewery has three recipes and five new labels awaiting approval. The company is especially worried that the release of its new spring label, Spring Blonde, could get pushed back. More delays might force New Belgium to shell out extra money to speed up the label printing and rush the beer to market, he said.

     

    “Everybody is frustrated in general,” Simpson said. “The whole way this has played out has been disappointing for the entire country.”

     

    Lakefront Brewery in Milwaukee has applications pending for new packaging of its IBA dark ale and for permission to offer a sour cherry dark lager called John, a brewery employee’s own concoction.

     

    The brewery hopes to launch the IBA packaging in November and John in December, but nothing is certain now. If the shutdown causes delays, the brewery will probably have to rush the beers to market, said brewery spokesman Matt Krajnak.

     

    “If we lose that first month, we lose out on a good chunk of money,” Krajnak said. “Right now, it’s only been a week so it’s not too bad. Two weeks, three weeks is when we’re really going to start sweating here.”

     

    Brenner said politicians don’t seem to care how much damage they’re causing.

     

    “For them it’s just another day,” he said. “They are still getting paid, but I’m losing $8,000 a month.”

    Source: http://money.msn.com/

  • Build a Craft Brewery, Urban Revival Will Come

     

    Heavy Seas Brewery

    Heavy Seas Brewery

    Craft beer is good for you and your local community.

    To see how a small business can transform a neighborhood, just follow the barrels.

     

    About 30 years ago, beer lovers wanting to create their own drinks started taking over abandoned old buildings in rundown city districts, refitted them with tanks, kettles and casks, and started churning out beer. The byproduct was a boom in craft beer drinkers: Barrels shipped have more than doubled in the past decade, according to trade publication Beer Marketer’s Insights. Craft beer now makes up nearly 7% of the slow-growing U.S. beer market.

     

    But beer drinkers weren’t the only beneficiaries. The arrival of a craft brewery was also often one of the first signs that a neighborhood was changing. From New England to the West Coast, new businesses bubbled up around breweries, drawing young people and creating a vibrant community where families could plant roots and small businesses could thrive.

     

    It happened in Cleveland. Once an industrial powerhouse, the Rust Belt city has been losing residents since the 1950s. Manufacturing jobs disappeared. The city nearly went bankrupt in 1978.

     

    Marred by abandoned buildings and boarded-up stores after several hard decades, the downtown Ohio City neighborhood, just west of the Cuyahoga River, which divides Cleveland, was “perceived as dangerous and blighted” into the 1980s, says Eric Wobser. He works for Ohio City Inc., a nonprofit that promotes residential and commercial development while trying to preserve the neighborhood’s older buildings.

     

    Enter Great Lakes Brewing, which opened in 1988. Over the years, it’s built a brewery and a brewpub from structures that once housed a feed store, a saloon and a livery stable.

     

    “We resurrected all of them,” says Pat Conway, who founded Great Lakes with his brother, Daniel. “We’ve beautified the neighborhood, provided a stunning restoration.”

     

    Other breweries and businesses — a pasta maker, a bike shop, a tortilla factory, as well as restaurants and bars — followed. Newcomers are flocking to the neighborhood, even though Cleveland’s overall population is still declining. The city repaved the quiet street next to the brewery, Market Ave., with cobblestones, and poured millions into renovating the West Side Market, whose origins date back to the 19th century. Today, more than 100 vendors sell produce, meat, cheese and other foods there.

     

    What’s going on in Cleveland is happening across the country. Trendy small businesses like breweries and younger residents have been returning to downtown neighborhoods in many cities across the U.S. The biggest cities are growing faster than the suburbs around them, according to Census data.

     

    Another benefit of the brewery boom: Manufacturers like brewers typically pay workers more than service businesses like restaurants or shops do. That’s good for local economies.

     

    But for some, the bubbles are bursting. In Brooklyn, N.Y., breweries are feeling the heat from rising real estate costs.

     

    When Brooklyn Brewery opened in the Williamsburg section of the borough in 1996, its neighbors were mostly deserted warehouses and factories. Today, Brooklyn Brewery is surrounded by modern apartment buildings, trendy bars, shops and restaurants. There’s still some graffiti, but that hasn’t deterred the influx of new residents willing to spend a lot of money to live there. In the past decade, home values in the Brewery’s neighborhood have more than doubled — up 145%, according to real estate appraiser Miller Samuel.

     

    Rising prices might force Brooklyn Brewery to exit the trendy scene it jump-started. It has two buildings in Williamsburg, the brewery and a building across the street where it stores and ages its beer. Leases are up in 2025, and Brooklyn Brewery’s co-founder and president, Steve Hindy, is already worried that the company will get kicked out of its warehouse. Once an iron foundry, the building, built in 1896, has been bought by developers who Hindy says won’t renew the lease. He suspects that they want to convert the space into apartments.

     

    The landlord, Solomon Jacobs, says he doesn’t yet know what’s going to happen with the lease.

     

    But Hindy is already scouting other, cheaper neighborhoods in Brooklyn.

     

    “We sowed the seeds of our own demise here,” Hindy says.

     

    Gentrification is pressuring at least one other nearby brewer. Kelly Taylor, who owns Kelso, is looking for new space in Brooklyn or the Bronx because he thinks his landlord won’t renew the lease in 2017. In Kelso’s neighborhood, the Clinton Hill section of Brooklyn, home prices have almost doubled over the past 10 years, according to Miller Samuel data.

     

    “He’ll tear down and build something more lucrative,” Taylor says speculatively of his landlord.

     

    However, the building’s manager, Fred Sanders, says the lease was just renewed last year for five more years, and he hasn’t had any conversations with Kelso about the future.

     

    Even if the brewery owners don’t have confirmation that they’ll be forced to move, history shows they have reason to be concerned. Winifred Curran, a geography professor at DePaul University in Chicago, studies how gentrification changes cities. She wrote her graduate-school dissertation on how gentrification in Brooklyn’s Williamsburg neighborhood affected small manufacturers. Small businesses struggled to stay put while developers converted factories and warehouses into lucrative lofts and swarms of wealthy new residents drove up prices, she says. She warns that the appeal of revitalized neighborhoods can decimate small businesses, both old and new.

     

    “You can try to use the establishment of manufacturing businesses to be the wedge that allows gentrification to happen, but then you need to protect those businesses,” Curran says. Otherwise “the market creates this demand for industrial space and then kills the goose that laid the golden egg.”

     

    Outside of New York, costs are lower, and many brewery owners in other cities say they haven’t felt similar pressures from developers. But New York flashes a warning sign for what can happen when neighborhoods become popular.

     

    One brewery, in Boston, is relatively protected. Harpoon Brewery opened on the South Boston waterfront in 1986, when it was surrounded by auto body shops and little else. Now the brewery draws more than 85,000 people a year from tours and tastings. These days, the city is focused on redeveloping the area. New apartment and office buildings, restaurants and a convention center sit nearby. Harpoon recently negotiated a 50-year lease with the city. The rent will rise over time, but generally, long leases provide protection from spikes that can happen when an area becomes so popular that property values skyrocket.

     

    On the country’s other coast, the tech boom has made one brewpub’s growth plans more complicated. The 21st Amendment brewery, in San Francisco, is two blocks from the Giants’ baseball stadium, which opened in 2000 and, along with the bustling technology sector, transformed the city’s SoMa neighborhood from abandoned warehouses to hot spot. Now the company wants to build an 80,000-square-foot brewery — but that’s not possible in SoMa.

     

    “The manufacturing element of the business has been priced out,” says 21st Amendment’s founder, Nico Freccia. The company has opened offices in the East Bay, and he’s scouting space there for the brewery, hoping to “help anchor the revitalization” of an Oakland neighborhood.

     

    Similar dreams are fueling a new beer company in New York. Bronx Brewery is setting up shop in the Mott Haven section, next to a lumberyard, a manufacturer and the plant that prints the New York Post.

     

    “We really want to be in the Bronx, be a part of a south Bronx community that’s growing like crazy,” says Chris Gallant, co-founder of the brewery, which will have a space for visitors. “We hope to get as many people there as possible — it’ll definitely serve as marketing,” he says.

     

    About 29% of Bronx residents live in poverty, compared with 15% for all of New York state, according to Census data.

     

    “I think that entire area is going to increase in value,” Gallant says. “That’s great for the south Bronx. But it could put us in a tough spot 10 years from now.”

     

    Source: http://www.usatoday.com/

  • On its 80th Birthday, Beer Can Back in Style

    can vs. bottleLooks like the beer can is once again being elevated to a higher status.

    Nearly 80 years ago Richmond revolutionized the beer world. For it was in this Southern city in 1935 that canned beer — complete with how-to instructions — was first sold.

     

    Krueger’s Cream Ale and its punch-top can became an instant hit, propelling the humble beer can to iconic status. That is, until Americans returned to bottles and the beloved craft brews they contained, a cultural turn that left canned beer looking decidedly low-brow.

     

    But more recently craft brewers rediscovered cans, realizing they weren’t just retro-cool, but with a few tweaks might even be able to kick bottles in the can.

     

    Welcome to the beer can revolution, 2013-style. Technology once again is transforming how Americans drink their beer.

     

    Today, Budweiser sells a bow tie-shaped can that mirrors its iconic logo, Miller Lite sports a punch-top can, drinkers know their Coors Light is cold when the mountains on the can turn blue, Sam Adams Boston Lager comes in cans designed to improve the taste, and now Sly Fox Brewing Co. sells beer in “topless” cans designed to turn into cups when opened.

     

    “It’s not your father’s beer can anymore,” says Jim Koch, founder and owner of the Boston Beer Co., the maker of Sam Adams.

     

    Both craft brewers and craft beer drinkers are coming around to the idea of cans. More affordable supplies and canning equipment also are helping the boom. In 2002, just one craft brewery was using cans. Now around 300 different breweries offer close to 1,000 beers in cans, according to CraftCans.com, a site that tracks the canned beer revolution.

     

    “Craft beer in cans is becoming more mainstream each and every day,” says Brian Thiel, regional sales manager with packaging firm Crown Holdings. “The stigma that has existed continues to get lifted.”

     

    Koch, a self-proclaimed purist, at first “stubbornly resisted” putting Sam Adams in cans. But after spending more than two years and $1 million developing a couple dozen prototypes, the “Sam Can” was born. Koch says that with a bigger lid and a more defined lip, the redesigned can forces your mouth open more and puts your nose closer to the opening, creating a better flavor experience.

     

    Admittedly, it’s “not going to make the angels sing when you drink it,” says Koch, who is allowing other craft breweries to use the redesigned can. “But my experience with Sam Adams since I started it in my kitchen is that slight but noticeable improvements constantly and repeated over 30 years makes a great beer.”

     

    Meanwhile, Sly Fox Brewing Co. decided to go all the way and blew the lid off with its cans — literally.

     

    In April, the Pennsylvania brewery began selling its Helles Golden Lager in cans with a peel-off top (think soup can). While litter laws prevent it from being sold in all states it distributes in, the can is getting noticed. The brewery also sells its flagship Pikeland Pils in the same cans exclusively at Citizens Bank Park, the home of the Philadelphia Phillies.

     

    “There have been a lot of different mini-innovations … but never that important to craft beer,” said Sly Fox brewmaster Brian O’Reilly. “(The new can) is different and interesting to people, but there’s a real benefit because you can smell the beer … it really allows you to appreciate the full character of the beer.”

     

    Sly Fox still cans several of its beers in traditional aluminum cans and defends the polished package as a perfect fit for craft beer.

     

    Its website even has a page that encourages beer drinkers to “respect the cans because the cans respect the beer.” The page lists the benefits of cans — portable, space-saving, faster-cooling, more light-resistant and super-recyclable — and debunks myths that the cans impart a metallic taste to beer, are unsophisticated and don’t store as well as bottles.

     

    The can now used by Sly Fox was first debuted by Crown Holdings at the FIFA World Cup soccer tournament in South Africa in 2010 as part of a partnership with SABMiller.

     

    While many of the innovations tout a better drinking experience, there is a marketing element to it, too.

     

    “What’s next may be cool, it may be setting themselves apart. But there is a point where it becomes gimmicky and it loses its functionality and its form and its integrity,” Thiel said.

     

    Sam Adams’ Koch agrees: “If it doesn’t make the beer taste better, then don’t do it just to get noticed,” he said. “The customer will reward you with more of their business if you give them a better tasting product than their alternatives.”

     

    Source: http://www.usatoday.com/

  • U.S. Challenges Busch-Modelo Beer Merger

    No Anheuser-Busch

     

    When the big get too big there is only one entity that can stop them, the government.  It seems the US government may think InBev Anheuser-Busch may be getting just a little too big.

    The U.S. Justice Department is trying to keep Budweiser and Corona apart.

     

    Justice is challenging the proposed $20.1 billion buyout of Mexico’s Grupo Modelo, brewer of Corona beer, by Anheuser-Busch InBev, brewer of Budweiser.

     

    Anheuser-Busch inBev owns 49% of Grupo Modelo, this deal would give it the rest.

     

    The government, though, says the merger would put too many top beer brands in the hands of a single company, limiting competition. The concern is especially high in 26 U.S. cities. The suit has been filed in federal court in Washington D.C.

     

    Investors reacted negatively to the news. Industry consolidation has been rampant in the beer and spirits industry and is viewed as a way for companies to boost profit by cutting costs.

     

    Shares of Anheuser-Busch InBev were down $5.58, or almost 6%, to $88.56 Thursday.

     

    Budweiser and Corona are among the most dominant beer brands in the country. Bud Light is the best-selling U.S. brew, while Corona Extra is the No. 1 selling import.

     

    Shares of Constellation Brands, a top spirits maker with brands like Robert Mondavi, fell $6.77, or 17%, to $32.40. Constellation is the U.S. top beer importer through its distribution joint venture with Grupo Modelo.

     

    Constellation stood to benefit from the proposed merger of Grupo Modelo, though, with Anheuser-Busch InBev and potentially suffers if it falls through, says Ken Perkins, analyst at Morningstar.

     

    Back in June 2012, when Anheuser-Busch InBev proposed the buyout of Grupo Modelo, it created a deal with Constellation to manage anti-trust concerns, Perkins says. As part of the deal, Anheuser-Busch offered to give Constellation a long-term deal to control the joint venture with Grupo Modelo, replacing the current deal that expires at the end of 2016, Perkins says. That would have given Constellation a long-term deal giving it the rights to distribute Grupo Modelo products in the U.S.

     

    Now, with the Anheuser-Busch buyout of Grupo Modelo in question, investors, too, worry that constellation could lose those distribution rights at the end of 2016.

     

    Regulators are apparently worried that even if Constellation has U.S. distribution rights for Grupo Modelo products, it will still be Anheuser-Busch InBev calling the shots when it comes to pricing.

     

    Lacking that competition, Anheuser-Busch would be able to boost beer prices, says Bill Baer, assistant attorney general for the department’s antitrust division.

    Source: http://www.usatoday.com/

  • Bud Dud: Big Beer Isn’t Recession-Proof

    No Anheuser-Busch

     

    I reported two days ago about how craft beer seems to be recession proof.  Well, the same doesn’t seem to hold true for big beer.

    The thing you pick up pretty quickly in just about any discussion of craft beer is that beer people are geeks: obsessive, opinionated, passionate, pedantic human beings who spend hours mulling every drop of their industry.

     

    We discovered this firsthand last week when some folks at the Beer Institute, a beer industry organization based in Washington, pointed out an alternative theory behind our post about how craft beer beat the recession. The Beer Institute found that craft’s gains came at the cost of overall industry losses. As Beer Institute spokesman Chris Thorne put it, “Beer isn’t recession proof.”

     

    “What you had was guys who build roads, hang drywall and deliver appliances out of work. These are guys who drink premium and premium light brands, because it’s affordable and that’s what middle class Americans drink,” Thorne says. “Meanwhile, Wall Street bankers, lobbyists and other well-paid professionals survived the Great Recession just fine, and continued to plunk down big bucks for high-end beer, thereby growing their share of market.”

     

    To illustrate that point, the Beer Institute provided a chart of average unemployment rates compared to average monthly beer shipments during the same period. Overall shipments began decreasing steadily in 2009 and continued through June of last year in direct correspondence with job numbers.

     

     

    In 2011, the last full year for which numbers were available, the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau indicated that overall U.S. beer shipments decreased 1.4% after dropping 0.7% in 2010 and 1.9% in 2009. Anheuser-Busch InBev (BUD 0.00%) and MolsonCoors (TAP 0.00%), the nation’s two largest brewers, each saw shipments slip 3%. Heineken shipments also fell 4%.

     

    It’s part of the reason Anheuser-Busch InBev pushed its premium Bud Light Platinum brand at the Super Bowl last year and is throwing weight behind its Budweiser Black Crown during the big game this year. It’s also why A-B acquired craft label Goose Island last year and MolsonCoors continues to push premium brands like Blue Moon and Leinenkugel’s.

     

    Results have been mixed. Early indications from industry trade publication Beer Marketer’s Insights show A-B with a 0.6% gain in 2012, thanks to both premium beers and a dwindling unemployment rate. Improved jobless numbers helped boost U.S. shipments 1.5% in 2012, based on preliminary figures, but it hasn’t been an even recovery. Higher-paid college graduates have seen most of the benefits, while those with a high school education or less continue to lose ground. As a result, MolsonCoors’ MillerCoors U.S. division saw shipments drop 1.8% last year as drinkers unsure about buying 30-packs of Miller or Coors in an unstable economy cut back.

     

    Though the Beer Institute asserts that dividing brewers up into different categories only detracts from a thriving industry that boasts more brewers than at any time in U.S. history, beer spending patterns indicate that those fractures have already formed. Beer geeks can use whatever labels they want to describe it, but the only labels that matter are the ones on the beer cans and bottles each side of the unemployment divide can afford.

    Source: http://money.msn.com/