Blog: Pils, thrills and headaches
Chris Brook-Carter | 20 January 2004
All brewing eyes will be firmly fixed on Germany after today’s announcement that Carlsberg has made a takeover offer for one of the country’s leading brewers, Holsten.
It could prove to be one of the most contentious acquisitions in the brewing industry for many years.
Carlsberg was known to be on the look out for takeover targets. But the acquisition has still come as a shock, given that Holsten announced in December it had abandoned its strategic search for a buyer.
The acquisition will no doubt divide opinion among Carlsberg’s investors. Despite a reasonable price tag for a leading brewer in Europe’s largest beer market, the Danish brewer is buying into a market in decline.
To make matters worse, Germany remains extremely fragmented, even after the recent round of consolidation that has preceded this deal. There are roughly 1,660 breweries in the European Union. Nearly 1,300 of those are in Germany, and more than half of those have an annual production capacity of only 5,000 hectoliters.
To make the situation even more complicated, the structure of the deal has already come in for criticism, with one report arguing that Carlsberg’s plan to sell off around half of Holsten’s assets makes this a half-hearted effort.
In Dow Jones’s “The Sceptic” column, the author writes: “If Carlsberg ever wanted to compete head to head with rival Interbrew in Europe's biggest beer market, it probably just blew its chance.”
The purchase of Holsten could have given the Danish brewery the opportunity to take second place in Germany. But by selling two of the company’s top brands Koenig and Licher, Carlsberg has settled for 5th place.
It appears instead that Carlsberg intends to use Holsten’s distribution to grow its flagship brands Carlsberg and Tuborg organically. How the German market – notorious for its domestic loyalties - will take to these foreign brews remains to be seen.
Would the thought of working in a morgue stop you from drink driving? ...
You would be forgiven for thinking that the US cider boom is over. Sales growth of as much as 90% in the past few years has shrunk to double figures. ...
The drinks industry could do more to benefit from new technology. ...
The soft drinks world is abuzz today over what an executive shake-up at PepsiCo might mean to on-going speculation over CEO Indra Nooyi's successor....
- Paddy Irish whiskey - The Facts
- A-B InBev and its SABMiller divestments - Focus
- SABMiller in Cent'l & E Europe - What is for sale?
- Is the wine industry confusing its consumers?
- Where does AB InBev see the future of beer?
- Pernod Ricard to widen Our/Vodka sales reach
- Leonardo DiCaprio joins Runa drinks board
- Remy Cointreau names new Travel Retail exec
- Pernod in talks to sell Paddy whiskey to Sazerac
- US wholesalers point to Absolut decline - report
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Global travel retail insights - market forecasts, product innovation and consumer trends
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends
- Consumer and Market Insights: Spirits Market in the US
- Carbonates in India