Brewing alliances shuffled
Foster's, Miller, Molson redo various deals
Oct 12, 2000 - Foster's Brewing Co. of Australia, Miller Brewing Co. of Milwaukee and Molson Inc. of Canada all pronounced themselves pleased after Foster's renegotiated its brewing, marketing and distribution accords with both North American companies and they redid contracts with each other.
As a result of the deals:
- Miller agreed to an early termination of a 1997 agreement that gave Miller the right to sell Molson brands in the U.S. Montreal-based Molson Inc. agreed to pay $133 million to regain total control over its brands in the U.S.
- Molson agreed to strengthen its commitment to marketing and distributing Miller brands in Canada.
- Miller will continue to market and distribute Foster's brands in the United States through a joint venture with Foster's Brewing Group Ltd.
- Molson will make all Foster's beer -- 10 million cases worth -- that is sold in the U.S. Molson also agreed to boost marketing of Foster's beer in Canada.
"The restructuring is a real win for all parties," said Richard Strup, Miller senior vice president-corporate strategy, in a written statement. "This enables us to focus more directly on Foster's and the rest of our core brands, which is a key business strategy for Miller. In addition, we benefit from a stepped-up commitment from Molson to Miller brands in Canada."
The deal allows Molson to take control of the U.S. market, said Daniel O'Neill, president and chief executive officer.
"Regaining our strong position in the United States market is the required first step to future profitable growth outside of Canada," O'Neill said in a written statement.
Meanwhile, Richard Scully, managing director of Foster's Brewing International, said his company anticipates booming growth. "We certainly expect to get better than a 60% increase on current volumes over the next five years," he said.
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