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

Scotch is great, says Scotch Whisky Association

To support the release of its latest report, entitled ‘The Economic Impact of Scotch Whisky Production in the UK’, trade body The Scotch Whisky Association has released this video, highlighting the si...

BLOG

At Coca-Cola Co, it's not just the head count that's getting smaller

The Coca-Cola Co is in the middle of a major restructuring plan, affecting jobs around the world. The company is also downsizing its packaging....

BLOG

Polish vodkas prove their worth in Ukraine

One, perhaps minor, consequence of the conflict in Ukraine appears to be a fall in sales of Russian vodka in the country....

BLOG

Diageo distilleries welcome you to their virtual world

Diageo has jumped onboard Google's latest interactive maps and is opening up the virtual doors to four of its distilleries. ...

just-drinks homepage



Forgot your password?