Comment - Grupo Modelo and Anheuser-Busch InBev: Love or Hate in the UK?
We fully intend to keep an eye on how things develop here in the UK with Grupo Modelo's Corona Extra bottled beer brand.
Earlier today, we reported that the brand's distributor, seller and marketer in the UK, Wells & Young's, has been advised by Modelo that it would not be renewing the agreement between the two in the country. Speaking exclusively to just-drinks, the chairman of the UK company, Paul Wells, said he felt that the brand would be handled in the UK by “a global brewer” when the deal comes to an end in January.
Corona is without doubt a very attractive brand. The beer has a young, hip following here in the UK, with consumers linking the brand to surfing, clubbing and generally ''avin' it large' (ask your kids).
So, we'll understand if the Carslbergs, SABMillers and Heinekens of this world are this evening pondering what – if anything – they could do to get the brand.
I say 'if anything' because, if Anheuser-Busch InBev has anything to do with it, then no-one else is going to get a look-in. Since InBev's purchase of A-B, though, Modelo has made its opinion of the brewing behemoth pretty clear. In June 2008, Modelo's chairman and CEO, Carlos Fernandez, quit his post on A-B's board, a post he held as a result of A-B's 50% non-controlling stake in Modelo.
Then, last year, Modelo took A-B to an arbitration panel in the US, claiming that an agreement between itself and A-B prohibits the automatic transfer of A-B's stake in the company to "a competitor in the beer business". Earlier this year, the panel found in A-B's favour on the matter.
And now, the Mexican brewer will spend the next three months sorting out a suitable home for Corona in the UK, where the brand sells around 5m cases. It will be most interesting to see who Modelo chooses as Corona's new distributor. If it's A-B, then it could be the start of a beautiful relationship. If it's not, then that sends a pretty clear message to Belgium.
SABMiller's CEO, Graham Mackay, has stoked the fire of speculation by forecasting more consolidation in the beer sector, but has he also hinted that Foster's Group is asking for too much money?...
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