UPDATE: DENMARK: Hunt for capacity spurs Royal Unibrew Latvia buy
Royal Unibrew is looking to use the purchase of Livu Alus in Latvia to help alleviate capacity concerns in the Baltic region.
The Danish company confirmed yesterday (15 August) that it has bought the brewer from Grigis and Co. for EUR17.5m (US$23.4m). The purchase sees Unibrew strengthen its position as the third largest brewer in the country, upping its market share of between 9% and 10% to around 18%-20%.
Speaking exclusively to just-drinks, company CEO Poul Moller highlighted the need to increase available production in the region, hence the acquisition.
"The annual production capacity of Livu Alus is around 500,000 hectolitres," he said. "At the moment, it is only running at roughly 200,000 hectolitres. We need additional capacity, not only in Latvia, but also in Lithuania."
Unibrew already owns the Lacplesa Alus brewery and soft drinks producer Cido in the country.
"Currently, Lacplesa's products are being sold through Cido," Moller continued. "We will move the administration and management of Livu to Cido as well - then we will sell Livu like we sell Lacplesa."
Moller declined to give specific details about any job cuts or synergy savings, but said that the company would spend "unitl Christmas" on the integration.
"Livu's brands are sold in the mainstream, while Lacpleca is more of a premium product, so the two brands are not going to be competing with each other," he added.
Established in 2000, Livu Alus employs 125 people. Last year, net turnover at the brewer reached EUR9m.
The head of Danish brewer Royal Unibrew has warned that rising commodity costs will continue to be a major issue for brewers around the world going forward....
Carlsberg is revamping its Ramlosa mineral water portfolio in Denmark, on the back of a disappointing 2007 for the brand....
Royal Unibrew is considering the closure of one of its breweries in Denmark....
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