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

Pernod Ricard's Havanista remains poised to capitalise post-embargo

Spotted in Havana this week – a healthy stock of Pernod Ricard's Havanista rum. ...

BLOG

Does Oscar glory beckon for 'Mr Heineken'?

Alcohol always has a big presence at the Oscars, albeit mostly in a supporting role....

BLOG

Is pisco preparing to make some noise?

Business is booming at copper pot still makers Chalvignac - you can tell from the loud noise coming from its factory floor in the French town of Jarnac-Champagne. ...

BLOG

Heineken has eye on the (soccer) ball in US

Heineken is betting big on the long-term opportunity around soccer in the US. ...

just-drinks homepage



Forgot your password?