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Goose, A-B deal near?

Chicago newspaper reports brewing giant to acquire large stake in smaller brewery

May 18, 2006 - The Chicago Tribune reports that the long-rumored deal between Goose Island Beer Co. and brewing giant Anheuser-Busch may close within the next month.

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The deal would have A-B purchasing up to 35% of the Chicago brewery and taking over distribution of the Chicago beer.

Neither Goose Island president and founder John Hall nor his son Greg could be reached for comment. An Anheuser-Busch spokesman declined to comment on the deal.

The partnership would benefit Goose Island on the distribution side, where it has struggled since ending a sales and marketing agreement with United States Beverage in 2004.

Industry resources report that beyond the obvious benefits of investing in a growing brand, A-B wants to strike deals with breweries such as Goose Island because its distributors want more popular products to sell. Domestic beer sales fell 1.6% in 2005, compared to 9% growth by craft beers - and 24% by Goose Island.

A-B recently added imports such as Grolsch and Tiger to its portfolio and there are rumors that the company will soon buy the iconic Rolling Rock brand from InBev.

Paul Gatza, director of the Brewers Association, told the Tribune he didn't expect Busch's purchase would hurt Goose Island sales.

"There probably will be some hard-core enthusiasts who become aware of that and make other selections," he said, but most won't even be aware of the deal.

Gatza speculated that the deal may be among the first of several that A-B announces this year.

Busch tried to buy a stake in Kansas City's Boulevard Brewing Co. last year. "They are trying to do these deals because they need to get those products to their wholesalers," said John McDonald, president of Boulevard Brewing Co.

"If you come out with a product they are trying to sell themselves, they just wouldn't sell it," he said. That's because "even it they only own 35% of your company they have total control of you."


Published : May 18, 2006
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