RBPMail 7.12, December 2001
Real Beer Page Mail (RBPMail) began as a modest update to craft-brew events on the WWW. It evolved into a news digest and sometimes editorial forum. We present its contents here much as they were emaaled to subscribers.
In this issue:
* Interbrew Interested in South African Breweries
* Heineken Leading Bidder for Carling
* Belgian Breweries Fined for Cartel Activities
* Australian Brewers Launch Summer Promotions
* A-B Loses Bud Battle of Britain (Again)
* 3,800-Year-Old Beer Recipe
* Another Duff Bites the Dust
* Study Finds Pub Life Reduces Stress
* ...Particularly When Somebody Else Is Buying
* Minister Takes Service to the Pub
* Web Watch
- Do Beers Mature With Age?
- Real Ale Shows Strength
- Deceptive Names, Deceptive Beers
* 'Polygamy Porter' Sparks Billboard Flap
* Guinness Buys Brewery to Produce Smirnoff Ice
* A-B Targets Upscale Market with Red Label Beer
* Miller Boosts Advertising; Bud Makes Cuts
* Heineken, Labatt Join U.S.Beer Institute
* Gaming Company Plans to Produce Budweiser Slots
* PGA Makes Amstel Light Its Official Beer
* Sam Adams Brews High-Alcohol Record Breaker
* Editorial: Porecting Our Beer Choices
INTERBREW INTERESTED IN SAB
Reports began swirling last week that Belgian brewer Interbrew was
preparing a bid to take over South African Breweries. While Interbrew
admitted an interest in SAB, it said that some documents were falsified
and then leaked to the media in an effort to scuttle the deal. The 43-
page analysis was altered to show a 600 pence a share hostile Interbrew
paper bid for SAB, and gave an unrealistic bid timetable under United
Kingdom takeover rules. The real document suggested an all-share merger
between the two valuing SAB shares at 500 pence. Banking sources said a
deal would have to be a friendly merger to succeed, and leaking of the
document appeared to be an attempt to sabotage the deal before SAB's
Chief Executive Graham Mackay had seen the proposed merger. Such a deal
would join two of the world's largest brewers, reshape the global beer
industry and perhaps spark more mergers. The combination would make
Interbrew, already the world's second largest brewer, just marginally
smaller than Anheuser-Busch.
HEINEKEN LEADING BIDDER FOR CARLING
Heineken apparently has regained top position in the £1.2 billion
auction for Carling, Britain's best-selling lager that Interbrew was
forced to put on the market after buying the Bass brewing interest.
There's talk, however, that South African Breweries may reenter the
bidding, in part to fight a possible hostile takeover attempt by
Interbrew (see above). Interbrew bought the brewing business from Bass
last year, including Carling. It was then ordered to sell Carling by
the British government on competition grounds. Constellation Brands, a
$3 billion American drinks company, was considered the leader in the
bidding for Carling before Dutch-owned Heineken increased its own bid.
A decision is expected next month.
BELGIAN BREWERS FINED FOR CARTEL ACTIVITIES
The European Union Commission has fined Interbrew and Alken-Maes, the
two largest brewers in Belgium, for cartel activities. Interbrew was
fined 46.5 millions Euros and Alken-Maes, 44.6 million Euros. Alken-
Maes was owned by Danone of France at the time of the activity. The
company is now owned by U.K. brewer Scottish & Newcastle Breweries.
"From early 1993 until the beginning of 1998, the two parties were
involved in wide-ranging cartel activities on the Belgian beer market,"
the Commission said.
AUSTRALIAN BREWERS LAUNCH SUMMER PROMOTIONS
Australia's beer drinkers can expect everything from free drinks to a
day at the cricket to entice them to drink more this summer as brewers
battle sagging sales and cooler-than-usual weather. Foster's Group
Ltd., the nation's biggest brewer, and Lion Nathan Ltd., the second
largest, are planning special promotions to attract drinkers in the
pre-Christmas and holiday selling period. The summer holiday season,
which runs from December to February, is when brewers sell about 30
percent of annual volume. Both brewers hope beer promotions will boost
sales, which have fallen because of waning consumption. Australians
bought 1.5% less beer in the year to June 30 than in the year-earlier
period, the first decrease in four years.
A-B LOSES BUD BATTLE OF BRITAIN (AGAIN)
Anheuser-Busch lost the latest skirmish in a legal battle with a Czech
brewer this week when a London court ruled that the Czechs can call
their beer "Bud" in Britain. A-B, maker of Budweiser and Bud Light,
failed to overturn an earlier court ruling allowing Czech brewer
Budejovicky Budvar to use the name. The two brewers have more than 40
lawsuits pending across Europe. Last month, the Czech state brewer won
the right to use the name Budweiser in Lithuania.
3,800-YEAR-OLD BEER RECIPE
Archaeologists have unearthed 3,800-year-old Babylonian beer-making
instructions on cuneiform tablets at a dig in northern Syria. Abdel-
Massih Baghdo, director of the Hassakeh Archaeological Department, told
The Associated Press that the 92 tablets were found in the 14th layer
of Tell Shagher, a site just north of Hassakeh. He said the tablets
showed beer-making methods and tallied quantities of beer produced and
distributed in the region." Hassakeh, 400 miles northeast of Damascus,
is known these days for its wheat production.
ANOTHER DUFF BITES THE DUST
The producers of the animated television series the Simpsons have
forced a New Zealand brewery to stop using the name "Duff" for the
beers it sells. 20th Century Fox threatened Duffs Brewery in Dunedin
with legal action unless it changed its name. The company changed its
name to McDuffs. Brewery owner Gavin Duff told the Otago Daily Times:
"I always thought the letter might come one day. What it boiled down to
was small guys like us don't have enough money to fight big guys like
them." In 1996, the South Australian Brewing Co. was banned from
selling "Duff Beer" after 20th Century Fox took it to court.
STUDY FINDS PUB LIFE REDUCES STRESS
A British researcher funded by a drinks company has found that visiting
the local pub helps men reduce stress. "Pub time allows men to bond
with friends and colleagues," said Dr. Colin Gill of Leeds University,
author of the study. "Men need break-out time as much as women and are
mentally healthier for it." He said that men may feel "unfulfilled or
empty" if they haven't been to the pub for a week. The report was
commissioned by Kaliber nonalcoholic beer. More than 40% of those
surveyed said they went for conversation. Relaxation and friendly
atmosphere were the other most common reasons given. Only 10% listed
alcohol as their main reason.
...PARTICULARLY WHEN SOMEBODY ELSE IS BUYING
A businessman who bought a round of drinks for 200 strangers in a
London nightclub received a bill that would buy an entire pub in some
parts of Britain. He signed 11 credit card slips to pay for the round
of drinks, which, with a healthy tip, came to £42,608.25. The man began
his spending spree at Browns nightclub in Covent Garden after offering
to buy a birthday drink for the club's owner, Richard Traviss. When
Traviss asked for a glass of champagne, he responded by buying nine
bottles of Cristal Champagne at £250 each. The man then offered to buy
everybody in the pub a drink. Champagne, bourbon and brandy started
flowing. Three hours later he topped the party off with a tip of
MINISTER TAKES SERVICE TO THE PUB
The Rev. Robin Spittle, vicar of Suffolk, England, recently held his
Sunday morning service in the local pub. "When the church makes the
effort to go where the people are, they welcome it and listen to it,"
he said. "We think the Christian message is extremely relevant in the
21st century. By bringing that message to a local pub we are asking
people to meet us half way."
DO BEERS MATURE WITH AGE?
Michael Jackson notes, "It is important to stress that 99.9 per cent of
beers worldwide are made to be consumed immediately after they leave
the brewery." He examines the exceptions, notes the pitfalls of laying
down beer and offers advice for those who want to cellar their own. The story.
REAL ALE SHOWS STRENGTH
Roger Protz reports that craft brewers in Britain have been given a
major boost by a report that challenges the belief that real ale is in
terminal decline. The report, researched by Martyn Cornell for Martin
Information, says the real ale sector of the British beer market had
been seriously under-estimated and is in fact buoyant and dynamic. The story.
DECEPTIVE NAMES, DECEPTIVE DRINKS
Stephen Beaumont offers examples of the food and drink duplicity that
attend our daily lives, then asks, "Why do we stand for it?" The story.
'POLYGAMY PORTER' SPARKS BILLBOARD FLAP
An outdoor advertising agency has expressed its opinion of Wasatch
Beer's latest advertising campaign for its Polygamy Porter by refusing
to erect a highway billboard for the beer despite a contract between
the agency and Schirf Brewing Co. Reagan Outdoor Advertising maintains
the planned billboard -- which features a picture of a scantily clad
man, cherubs and a six-pack of wives -- is in bad taste and exercised a
"censorship" clause in its contract with Schirf. "We've exhibited much
worse taste than this," brewery owner Greg Schirf told The Salt Lake
Tribune. Among other things, the billboard would suggest, "when
enjoying our flavorful beverages please procreate responsibly." Wasatch
Beer has long satirized the Mormon (Church of Jesus Christ of Latter-
day Saints) culture with its advertising. Previous Reagan billboards
for Wasatch featured the buxom blond namesake for St. Provo Girl
Pilsner and catchphrases "Baptize your taste buds," "Serving the local
faithful" and "Oh, my heck."
GUINNESS BUYS BREWERY TO MAKE SMIRNOFF ICE
Guinness North America has purchased a major Pennsylvania brewery last
operated by Pabst Brewing in order to expand production of Smirnoff Ice
malt beverage. Guinness NA, a subsidiary of Diageo of Great Britain,
paid $29.8 million to buy the Fogelsville brewery in the Lehigh Valley
and will spend another $15 million to prepare the facility for Smirnoff
Ice production. "Smirnoff Ice has been a stunning success," said Paul
Clinton, president and chief executive of Guinness North America. "This
plant will help Guinness meet the ever-rising consumer demand and will
expand our ability to deliver Smirnoff Ice more efficiently and
conveniently to our customers across North America." Since its launch
in the United States in January, Smirnoff Ice has captured 1.8% of the
200 million barrel annual beer market, said Benj Steinman of Beer
Marketer Insights, an industry newsletter. It's the leading drink in a
category called "malternatives" -- alternatives to malt drinks such as
A-B TARGETS UPSCALE MARKET WITH NEW BEER
Anheuser-Busch is marketing a beer called Red Label for the high-end
market. For instance, a glossy four-page ad in Vanity Fair magazine
depicts sexy models in provocative scenes: One shows a group sitting in
a sidewalk cafe getting a full-body drenching in a rainstorm; in
another, a woman perches seductively on the edge of a bathtub exposing
her nude back to chic party-goers. Red Label is being sold in select
clubs and restaurants at "premium-plus" price levels, according to
Anheuser-Busch's Vice President of Brand Management and Director of
Global Brand Creative, Bob Lachky. The company declined to provide a
specific price for the drink, and no descriptions of what the beer
tastes like have been offered. It comes in a bottle emblazoned with a
gold "r" and the names of those glamorous world capitals. Launching a
drink with a more premium image "would be consistent with Bud's
strategy," said Morgan Stanley beverage analyst Bill Pecoriello. "The
one segment where you've had tremendous growth and where they haven't
fully participated is really the high-end segment."
MILLER BOOSTS ADVERTISING; BUD MAKES CUTS
Miller Brewing Co. increased its overall advertising spending for its
Miller beer brands by 60% for the first six months of this year, while
rival Anheuser-Busch cut spending for Budweiser and Bud Light brands,
according to a report in Advertising Age magazine. Meanwhile, No. 3
brewer Adolph Coors Co. increased ad spending for its Coors brands by
nearly 6%, Ad Age said. Miller spent $147.1 million on so-called
measured advertising -- print and television ads -- for the first six
months of 2001, compared with $91.9 million for the same period last
year. Anheuser-Busch cut its overall ad spending by 6.2 percent to
$126.6 million, the magazine said.
HEINEKEN, LABATT JOIN U.S.BEER INSTITUTE
The Beer Institute announced that Heineken USA and Labatt USA have
joined the association in its international category. Heineken USA is a
subsidiary of Dutch Heineken, the world's second-largest brewer, and
Labatt USA is wholly owned by Interbrew of Belgium. "We are extremely
pleased to welcome Heineken USA and Labatt USA to Beer Institute," said
Jeff Becker, president of Beer Institute. "These international leaders
will contribute many good ideas as well as resources to aid the
industry in our efforts to make us successful, responsible corporate
GAMING COMPANY PLANS TO PRODUCE BUD SLOTS
Shuffle Master of Las Vegas and Anheuser-Busch have signed a licensing
deal for slot machines based on A-B's Budweiser beer. The slots will
incorporate the Budweiser logo and promotional images. The company said
it will work closely with Anheuser-Busch on the development of the
slots, but did not indicate in its announcement when or where it
planned to introduce Budweiser-themed machines. The machines will
present new issues in Nevada if Shuffle Master plans to put them in
casinos there. The use of an alcoholic beverage as a theme for a slot,
and the use of advertising as the central focus of a slot machine will
both come under scrutiny, said Dennis Neilander, chairman of the Nevada
Gaming Control Board.
PGA MAKES AMSTEL LIGHT ITS OFFICIAL BEER
Amstel Light and PGA of America have cut a deal to make Amstel Light
the official beer of the PGA. As part of the three-year pact, Amstel
Light gains exclusive rights to the PGA of America name, logo and
official designation in advertising and promotional efforts, and will
have a "prominent presence" at such events as the Ryder Cup Matches,
the PGA Championship, the Senior PGA Championship and the Grand Slam of
SAM ADAMS BREWS HIGH-ALCOHOL RECORD SETTER
Boston Beer Co., which set a record for producing the world's strongest
commercially brewed beer when it released its Millennium in 1999, has
moved the record higher. The new high-alcohol beer will be available in
limited markets in the United States starting in February 2002. Called
Utopias MMII, the beer has an alcohol content of 24%. The beer will
come in its own unique packaging. Each 24-ounce bottle is shaped like a
brew kettle, complete with access hatches, and finished in copper tone.
The brewery expects Utopias MMII to sell at retail for $100 a bottle,
though the limited supply of 3,000 bottles may have an effect on the
price. Millennium had a suggested retail price of $200, but bottles
sold for as much at $1,000 in online auctions before dropping back to
or slightly above the suggested retail.
EDITORIAL: PROTECTING OUR BEER CHOICES
The British press devoted considerable coverage the last two weeks to
reports that Interbrew is considering a bid for South African
Breweries. Interbrew said its proposal to take over SAB was "only a
preliminary working document," but such a merger would leave the new
company only slightly smaller than Anheuser-Busch, and that alone makes
it a big deal.
But why should you care if a Belgian brewery, already No. 2 on earth,
adds a few breweries in South Africa and China? For one thing, SAB
isn't exactly chump change, but instead the fifth largest brewing
company in the world. Last year it bought Pilsner Urquell, maker of the
classic Czech golden lager. Graham Mackay, its chief executive,
recently said he sees a future where his company could become the Coca-
Cola of the beer world. SAB sells 98% of all the beer consumed in South
Africa and is a market leader in China, Poland, the Czech Republic,
Honduras and El Salvador.
In the four years after it acquired Canada's Labatt Brewing in 1995,
Interbrew's production doubled. The company stayed busy since, most
recently buying the Bass brewing interest in England and Beck's,
Germany's top-selling export.
Interbrew has copyrighted the phrase, "World's Local Brewer." Just a
few of its brands include Stella Artois, Hoegaarden, Leffe, Labatt's,
Bass, Boddington, Tennent's, Worthington, Beck's, Staropramen, Ozujsko
Pivo and Rolling Rock.
You have to respect the philosophy put forward in communications in
print and at Interbrew's Internet website: "We see beer as a local
business, with the main volumes coming from domestic brands. The brands
that find a way to be local, in the community, part of people“s life,
and something they relate to, are the ones that are chosen --
accounting for 90% of all sales around the world today. That is why
Interbrew has elected to be the World“s Local Brewer."
Smaller American breweries have taken much the same approach in
advancing the beer renaissance in this country. That doesn't exactly
make them allies with Interbrew.
"Our main marketing objectives are to promote a domestic lager brand to
be our primary brand in each market, to support this primary brand with
at least one other brand in our portfolio, and to enhance Stella
Artois' status as an international brand," Interbrew reveals. "Brand
cycles are very long with beer brands being built over the course of
many years and brand strength often lasting for decades. We intend to
continue to invest heavily to maintain and enhance our brands."
Bottom line: Whether Interbrew is selling specialty beer or mainstream
beer, its goal is to sell more beer. It has the resources to both buy
breweries and to promote the brands its buys, targeting market share
that might go to your favorite beer. During the first American Beer
Month (July 2000), Stella Artois was advertised on a giant billboard in
New York's Times Square. That cost more than the entire ABM budget.
SAB has already indicated it has similar plans for Pilsner Urquell, and
if Interbrew acquires SAB the brand is guaranteed still more support.
This is a terrific beer and we'll be excited to find it more places and
in fresher condition. We'll buy our share, but it won't be because of a
billboard in Times Square. We still think of a trip to New York City as
a chance to track down great local beers like those from Brooklyn
Brewery and Southampton Publick House.
The point is we have choices, and mega-mergers may even expand those
choices by offering beers in markets where they were previously
unavailable. We'll never fault you for choosing a good beer, no matter
the size of the company that owns the brewery, but we remind you that
if you want to continue to have that wide range of choices, you better
support the breweries that make the beer you like -- no matter the size
billboards they can afford.