Five years ago - MillerCoors

Five years ago - MillerCoors

On 8 April 2008, SABMiller and Molson Coors cleared a major hurdle as they moved to set up MillerCoors, their beer joint venture in the US and Puerto Rico. As the European Commission gave the proposal its blessing, MillerCoors took a large stride towards reality.

Having announced their intentions in late-2007, SABMiller and Molson Coors finally opened MillerCoors' doors in July 2008.

First up: Portfolio consolidation. Within a month, the new entity pulled the planned roll-out for Miller Lite Brewer's Collection as test markets gave the extension the thumbs-down. Then, in September 2008, it withdrew the caffeinated alcoholic drink Sparks Red after a group of attorneys general complained. October saw another move to tidy the stable, when MillerCoors said it would discontinue its Zima malt beverage portfolio.

The alliance's first set of results, released in November 2008, showed a 15% increase in net profits on a 2% lift in sales in the third quarter of 2008. In 2010, full-year profits leapt on the back of synergies from the two parent companies in the US, although sales were flat. Then, in 2011, profits slipped slightly, by 5.6% in the year, with sales remaining stagnant. Last year saw growth return, with both 2012 net profits (up by 18.6%) and sales (up by 2.8%) turning black again.

The boom in craft beer in the US since its inception has not been wasted on MillerCoors. In 2010, the unit set up Tenth and Blake, a craft and import beer business created to surf the rising wave of craft brewing. A year later, Tenth and Blake took a minority stake Georgia-based Terrapin Beer Co and, in 2012, ventured into the American cider category when it bought Crispin Cider Co in Minneapolis.

As MillerCoors' fifth anniversary approaches, however, its longer term future is unclear. A legal row between the partners broke out in Canada earlier this year as SABMiller moved to terminate its distribution agreement in the country with Molson Coors. As we considered last month, could this tussle carry repercussions for MillerCoors, going forward?

SABMiller's next quarterly divisional seminar, to be held in June, will focus on MillerCoors. And, with the two brewers' five-year agreement not to transfer voting or economic interests in MillerCoors due to end on July 1, we could be in for a colourful summer.