Blog: Olly WehringKaiser is dead - long live Kaiser

Olly Wehring | 17 January 2006

The news this week that Molson Coors has finally exorcised its Brazilian demon will come as sharp relief to the North American company’s shareholders. Executives at the brewer have hardly had it their own way since the ink dried on the merger between Molson and Coors early last year. The struggling Kaiser business, though not alone among the brewer’s woes, has been one of its biggest headaches.

Molson bought Kaiser in 2002 for US$765m and saw the Brazilian brewer’s performance deteriorate at quite a pace. Distribution and marketing problems contributed to Kaiser slipping from Brazil’s number two brewer, with about 15% of the local beer market, to third place and only 8.5% market share.

And with Mexican drinks group FEMSA taking 68% of Kaiser for only US$68m, as well as assuming US$60m of debt, it would look like Molson’s South American gamble has been an unmitigated failure.

Molson Coors now plans to “focus on our biggest markets and to continue to deliver the cost synergies and other benefits related to the Molson Coors merger,” according to president and CEO Leo Kiely. Considering the company also said that it expects to report lower group sales volume and earnings per share, excluding items, for the fourth quarter, that’s exactly what the company needs to do, unencumbered by the Kaiser millstone.

So what of Kaiser? Is the brewer a poisoned chalice? Heineken, after all, appears to have shied away from the chance to up its stake in the company. Given that FEMSA is the largest distributor of Kaiser products in Brazil, however, one could conclude that Kaiser has found the best home it could hope for.


BLOG

The brutal truth behind India's temperance movement

Some people in India believe alcohol should be more difficult to purchase. Last month, the state of Bihar halted all alcohol sales as its chief minister made good on an election promise. ...

BLOG

How to test Heineken's sense of humour

Greetings from Zurich. Here as a guest of Heineken's Amstel brand, I'm due to sit down later today with the group's senior global director for international brands, Walter Drenth....

BLOG

Which spirits category is the next big thing?

Drinks companies spend a lot of money on trying to predict trends. At last night's Worshipful Company of Distillers City debate, any strategists in the audience got a bit of forecasting for free....

BLOG

Aperol Spritz - Just the one. A large one?

I'll admit to being partial to an Aperol Spritz now and again, more usually in the summer months, sitting outside, shades on, slowly turning more golden/rusty....

just-drinks homepage



Forgot your password?