AB InBev ‘first truly global brewer’

November 11th, 2015 | Posted by Real Beer

As expected, AB InBev announced that as part of the final agreement to buy SABMiller for $107 billion that SABMiller will sell its 58% share of its venture with Molson Coors to that company for $12 billion.

That deal includes rights to the Miller brand name and gives Molson Coors full control of operations.

The combined company will still need to address regulatory issues in other countries, particularly in China, where SABMiller has a 49% stake in Snow, the world’s biggest selling beer.

“This combination would create the first truly global brewer,” AB InBev CEO Carlos Brito said after the final agreement was announced.

“The transaction would strengthen AB InBev’s position in key emerging regions with strong growth prospects such as Asia, Central and South America, and Africa,” AB InBev said in a statement. “These regions have hugely attractive markets and will be critically important to the future success of the Combined Group.”

The new company will be listed in Belgium, with secondary listings in Johannesburg, Mexico and New York.

Although selling its stake in MillerCoors was seen as vital to clearing the way for the takover, it will also undergo regulatory scrutiny in the U.S. After the announcement, Brewers Association CEO Bob Pease released this statement:

“The Brewers Association, the national trade association for America’s more than 4,000 small and independent breweries, is carefully reviewing the terms of the acquisition announced today by AB InBev and SABMiller, and, in the days ahead, we would urge the Congress and the Department of Justice to closely examine the potential effects on the U.S. marketplace and American consumers of this proposed deal.

“The size and scope of the ABInBev business has many ramifications for the U.S. beer industry, even with the divestiture of the MillerCoors joint venture. The most obvious is that AB InBev is still by far the largest brewer and beer distributor in the United States. It is vital for the continued success of small brewers that we have access to market with an independent and competitive middle distribution tier.

“Over time, ABInBev will have significant new global revenues to invest in the United States if it chooses to do so as a result of this acquisition. The MillerCoors operation will undergo significant changes. AB InBev’s new international footprint and scale give the company greater influence over commodities used in brewing and many other facets of the beer industry that could affect competition in the U.S. market.

“All of these issues – and their potential effect on small brewers, the broader industry and U.S. beer drinkers – must be carefully weighed and scrutinized by antitrust authorities.”

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The giant gets bigger – AB InBev buys SABMiller

October 13th, 2015 | Posted by Real Beer

Anheuser-Busch InBev announced it has struck a deal with SABMiller to take over the brewer at £44 ($67.63) a share, about 14% higher than its initial offer last month. Reuters puts the value of the takeover proposal at $104.48 billion.

The combined company would have 31% of the global beer market. Heineken, the next biggest player, has 9% of the market.

Crucially for AB InBev, a deal would enable it to venture out more into the African and Australian markets where its might has yet to be felt in the way it is in Europe, North Africa and Asia.

The deal must still be approved by government regulators around the world and certain parts of the SABMiller operation will need to be sold in order to satisfy antitrust concerns. For instance, in the United States the new company would have 70% of the beer market. So it seems likely that Molson Coors will acquire SABMiller’s 58% stake in MillerCoors, their U.S. joint venture.

Although the scrutiny related to this deal is separate, that the U.S. Justice Department is probing allegations that Anheuser-Busch InBev is seeking to curb competition in the beer market by buying distributors is certainly relevant.

In recent months, the company has purchased five distributors in three states. Many states require brewers to use distributors to sell their product, and once A-B InBev buys a distributor, craft companies say they find that they can’t distribute their beer as easily and sales growth stalls. Antitrust regulators are also reviewing craft brewers’ claims that A-B InBev pushes some independent distributors to only carry the company’s products and end their ties with the craft industry, two of the sources said, noting that the investigation was in its early stages.

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Dogfish Head sells stake to private equity firm

September 29th, 2015 | Posted by Real Beer

Dogfish Head Craft Brewery announced today it has sold a 15 percent stake in the company to a New York-based private equity firm, LNK Partners.

In announcing the deal, Dogfish Head co-founder Sam Calagione said his company plans to eventually repurchase LNK’s share. The cash infusion now will allow Dogfish Head to continue growing. The company recently completed a $50 million expansion, financed primarily through bank debt.

“We lived through the first great shakeout of the craft era in the late 90s as brewers, beer geeks and mom-and-pop entrepreneurs,” Calagione told Brewbound. “Now as we go into the next most highly competitive moment in our industry, I see that it is not just home brewers and mom-and-pop entrepreneurs navigating this moment next to us.”

LNK will have one of five voting seats on the Dogfish Head board.

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Green Flash brewmaster leaves to start on brewery

September 28th, 2015 | Posted by Real Beer

Chuck Silva his resigned his post as brewmaster and vice president of brewing operations at Green Flash Brewing Co.

Here are the details from a press release:

Effective immediately, (Silva) will be funneling his energies into the establishment of his very own craft brewing operation at a yet-to-be-determined location in California’s San Luis Obispo County.

“Words cannot express my deep level of appreciation for the opportunities that Green Flash Founders Mike and Lisa Hinkley have provided me over the past decade-plus,” says Silva. “Together, we pooled our shared passion and determination to accomplish great things and introduce drinkers across the country to innovative, largely hop-forward beers that I was proud to help craft along with Green Flash’s passionate brewing staff. I will miss them all, but feel now is the time to focus on this next chapter.”

Adding to Silva’s enthusiasm is the chance to build his brewing company in the region where he grew up. The brewmaster hails from the Central Coast, and many of his longtime friends and family still live there. Silva is particularly excited about brewing up a business working side-by-side with the newest family member, wife Mary Jo.

When Silva joined Green Flash in 2004, the employee base totaled less than a dozen and the business was struggling to find an identity and market share in San Diego’s rapidly growing brewing industry. Thanks in large part to poignant beers tackling a wide range of styles—from hoppy beers to Belgian-inspired ales to barrel-aged sours and stouts, and more—Green Flash evolved into one of the nation’s premier brewing operations, currently employing more than 200 with nationwide and international distribution, and plans to open a second full-scale brewery in Virginia Beach, Va. in 2016.

“It’s been so fulfilling to play such a major role in the accomplishment of so many goals at Green Flash. Together, we’ve come further and grown larger than I could have ever foreseen. I couldn’t have done it alone and I thank every member of the craft community that helped me along the way,” says Silva. “But it’s always been my dream and personal long-term goal to brew on my own terms. Now is the time to go for it and I’m looking forward to working on smaller projects.”

No word on what the brewery will be called or when it open.

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Great American Beer Festival winners announced

September 26th, 2015 | Posted by Real Beer

Two hundred and forty-seven judges from 15 countries evaluated a mind-boggling 6,647 beers during the course of three days of judging at the Great American Beer Festival in Denver.

A few other numbers illustrate just how big the event has grown:

– 750 breweries were represented in the festival hall
– 3,800 beers served at the festival
– 60,000 attendees for four sessions
– 3,400 volunteers (festival and competition combined)
– 1,552 breweries in the competition from 50 states plus Washington, D.C.

The most-entered categories were dominated by hop-forward beers. There were: American-Style India Pale Ale (336 entries), Imperial India Pale Ale (208 entries), Wood- and Barrel-Aged Strong Beer (179 entries), Session India Pale Ale (161 entries), American-Style Pale Ale (160 entries).

Seven breweries won Brewery of the Year awards:
– Very Small Brewing Company – Rip Current Brewery (San Marcos, Calif.)
– Small Brewing Company – Port City Brewing Co. (Alexandria, Va.)
– Mid-Size Brewing Company – Firestone Walker Brewing Co. (Paso Robles, Calif.)
– Large Brewing Company – Pabst Brewing Co. (Los Angeles, Calif.)
– Small Brewpub – Melvin Brewing (Jackson, Wyo.)
– Mid-Size Brewpub – TAPS Fish House & Brewery (Corona, Calif.)
– Large Brewpub – Titletown Brewing Co. (Green Bay, Wis.)

Download a complete list of the winners here.

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A-B buys Golden Road Brewing

September 23rd, 2015 | Posted by Real Beer

Anheuser-Busch announced today it is acquiring Golden Road Brewing, the largest craft brewery in Los Angeles County.

It is the fourth smaller brewery A-B has purchased since it first bought Goose Island Beer Co. In 2014 it acquired Blue Point Brewing, 10 Barrel Brewing and Elysian Brewing. In addition,s last month Goose Island subsidiary bought a majority stake in Michigan-based Virtue Cider.

The deal comes on the heals of news of other acquisitions. Most recently, MillerCoors acquired a majority stake in San Diego’s St. Archer Brewing Co. Not long before, Lagunitas Brewing announced a partnership with Heineken that traded 50% of the company for an undisclosed sum and unequaled access to the international marketplace.

Founded in 2011, Golden Road produced 30,000 barrels last year.

Golden Road plans to remain focused on its current distribution in California, Arizona and Las Vegas, but could expand to other states under A-B’s ownership. “As demand grows, hopefully we’ll look at what other states and countries look like,” company co-founder and president Meg Gill told the St. Louis Post-Dispatch.

St. Louis-based A-B, the U.S. subsidiary of Anheuser-Busch InBev, said the sale includes Golden Road’s brewery, a pub in Los Angeles and a tasting room. Golden Road is adding a new tasting room this year, and a second production brewery and pub in Anaheim in late 2016.

Andy Goeler, A-B’s CEO of craft division, said Golden Road has created a passionate beer culture in its four years in operation. A-B continues to evaluate other craft brewery acquisition opportunities, he said.

“In addition to Budweiser and Bud Light, there’s a lot of demand for local beers and varieties of styles within those local beers,” said Andy Goeler, A-B’s CEO of craft division. “We’re always looking for other phenomenal companies to partner with to add to the portfolio.”

More from a press release; “A press release from A-B included As the largest craft brewery in Los Angeles County, Golden Road expects to sell approximately 45,000 barrels of beer in 2015 and can be found in more than 4,000 retail locations. With a brewery focused on draft and can production, a pub in Los Angeles and a new tasting room downtown. Additionally a new tasting room, opening in 2015, second production brewery and pub in Anaheim will be operational by the forth quarter of 2016. Its core brands – Point the Way IPA, Wolf Among Weeds IPA, Golden Road Hefeweizen and 329 Days of Sun Lager – represent 95 percent of volume. Along with the core beers, Golden Road brewers are constantly experimenting with the freshest ingredients through a collection of rotating, seasonal and limited-edition brews, most notably the Custom IPA Series, a line-up of diverse, hop-forward IPAs.”

In addition, A-B released this video.

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A-B InBev makes offer to buy SABMiller

September 16th, 2015 | Posted by Real Beer

Anheuser-Busch InBev revealed today it has made an offer to SABMiller to unite the world’s largest beer makers. The combined company would have a market capitalization of some $275 billion and be by far the largest brewer in the world, controlling about one third of the world market.

Any such deal would be carefully scrutinized by regulators and require that the companies involved sell off parts of their current operations.

“AB InBev’s intention is to work with SABMiller’s Board toward a recommended transaction,” AB InBev said in a statement. “There can be no certainty that this approach will result in an offer or agreement, or as to the terms of any such agreement.”

SABMiller is London based, and under U.K. takeover rules, AB InBev has until 5 p.m. on Oct. 14 to make an offer for SABMiller or walk away. SABMiller can then extend the negotiation process.

Buying SABMiller would strengthen AB InBev’s position in fast-growing economies in Africa and Asia. SAB Miller employs about 69,000 people in more than 80 countries, including Australia, Zambia, Colombia and the Czech Republic.

AB InBev was created in 2008 when Brazilian-Belgian brewer InBev bought Anheuser Busch. The company has operations in 25 countries and makes more than 200 beers, including Stella Artois and Beck’s.

There are significant antitrust hurdles to the deal, particularly in the United States, where the companies would have about 70 percent of the beer market, and parts of some of the companies likely will have to be sold. There was immediate conjecture about how a deal might affect the overall market in the United States, and the impact on distribution and sales of smaller breweries.

Brewers Association director Paul Gatza offered some thoughts on the BA website:

“In terms of impact on craft, my first thought is that most craft brewers operate in a different sphere—their communities and regions primarily. … Many craft brewers would look at a potential deal of Anheuser Busch-InBev and SABMiller as not relevant to their businesses and will keep on doing what they do—make flavorful and high quality beer, engage beer drinkers and serve the community through jobs, involvement and serving as a place for people to gather and discuss the events of the day.”

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