Blog: Chris Brook-CarterCall my bluff

Chris Brook-Carter | 27 July 2004

Ian Molson, an ex-board member of Molson, is apparently in talks with other international brewers, according to press reports, as part of his plan to deliver a competing C$4 bln buyout plan for the company.

Both Heineken and SABMiller have been linked to these talks.

But how seriously these rumours should be taken is debatable. "Don't believe everything you read in the press," one contact close to the situation told just-drinks today. "It is a hard sell to get anyone to buy Molson at the moment because its a huge turnaround project."

This corporate battle is fast becoming characterised by bluff and brinkmanship.

The tone has been set by claims by Coors CEO Leo Kiely that he would pull out of the current distribution deal with Molson should the Canadian brewer fall into other hands. An existing joint-venture marketing deal allows Molson to brew and sell Coors Light in Canada. Losing that deal would cost the Canadian brewer millions.

A number of analysts already believe Kiely is bluffing and his comments have sparked some great reactions in the Canadian press, particularly one article in the Globe and Mail.

Bluffing, bluffing, bluffing," said David Hartley, an analyst at First Associates Investments in Toronto.

"It's despicable," one anonymous Molson shareholder was quoted as saying. The two CEOs "are just trying to blow smoke to get it out there in the press . . . I think it's ridiculous."

They may have a point. After all, the deal has become almost as important to Coors. Coors Light holds around 8.5% of the market in Canada and the alternatives to the Molson distribution deal do not add up. The US brewer could export to Canada - an expensive option. Or, it could set up its own breweries in the country - again expensive. Or it could find another distributor - but who?


BLOG

US beer called "filthy water" as Czech president gets patriotic

The long-running spat between US and Czech brewers stepped up a notch this week after the Czech president described American beer as “filthy water”....

BLOG

Has beer gone to the dogs? Will it make you feel ruff? Has it got... OH, FORGET IT!

I've stopped short of covering it as a product launch story on just-drinks, but take a look at this. Released this month in the UK, Snuffle Dog Beer is already available in 25 markets....

BLOG

PepsiCo caught in Amazon attack

PepsiCo received high praise when it announced it was to launch its stevia-based Pepsi extension True exclusively on Amazon in the US....

BLOG

Diddy shows he's a Diageo man with prod at Patron

Sean 'Diddy' Combs, the US rapper and entrepreneur, has publicly turned against his apparent former favourite Tequlia brand, Patron, now that he is joint-owner of DeLeón Tequila....

just-drinks homepage



Forgot your password?