May 30, when SAB releases annual results. "The company is understood to have scheduled a formal announcement" then about deal with PM to "gain control" of Miller, wrote UK paper Sunday Telegraph May 19. That?s pretty specific, even if "wait-and-see" still seems to be best approach. PM would keep about 20% stake and cost savings from deal expected to be about $66 mil a yr, wrote Telegraph. "The two sides have been locked in talks for more than two months and both have consistently played down the likelihood" of a deal. "But people close to the talks say they are optimistic," the paper added. Stay tuned. Meanwhile, SAB ceo Graham Mackay did give keynote address at a European brewing conference held last week. Tho CFSB analysts had expected "clarity" on Miller deal then, instead Graham "made a number of points about consolidation in the brewing industry which we think underpin the likelihood" of deal, they subsequently wrote. Regulatory issues "key barrier" to global consolidation, Graham had said, according to Credit Suisse First Boston, which leaves only 2 or 3 large deals "left to be done." SAB would only be interested in a deal at right price. And Miller at $5 bil is the "most obvious," according to CFSB.

Apr domestic taxpaid shipments up half-mil bbls, 3.4%, estimates Matt Hein of Beer Inst. Yr-to-date, shipments up 1.3 mil bbls, 2.2% and 6-mo gain is 1.85 mil bbls, 2.2%. Shipments up 6 straight mos too, Matt notes. Last time that happened: 1986. Twelve-mo domestic shipments picture still not so hot, +0.7%, but with imports up high single-digits, looks like US malt bev biz up about 2.6 mil bbls, 1.3% last 12 mos.

Turns out 2001 was best growth year for the beer biz in Mid-Atlantic region in over a decade.  NY posted a 540,000-bbl, 5.3% increase.  In NJ, shipments were up 3.4%, and Pennsy’s growth rate doubled in 2001 to 1.7%.  Yet even with gains in 2000-2001, Mid-Atlantic shipments still down 1.5 mil bbls, 6% for 10 years.  Likewise, shipments to New Eng increased 2%+ for the 1st time in over 10 yrs.  Each state up 1% or more: up 3%+ in ME and RI, and the growth pace in Mass just below 2%.  Conn up in 2001, but just made up 2000 loss.  Long-term, New Eng shipments in 2001 still just even with 91.   

“We’re going after the big fish,” Gambrinus director Don Mann told Ad Age.  “Corona Light can have the same appeal [for] domestic light beer drinkers that Corona has had versus regular beer drinkers."  In Gambrinus territory, Corona Light 7% of volume but will get 20% of this yr’s mktg.   Barton is not doing separate Corona Light campaign.  Corona Light shipped 420,000 bbls in US in 2001.  

Imports up just 67,000 bbls, 3.5% in Mar. On up-and-down path: up huge in Dec, flat in Jan, up 16% in Feb, up slightly in Mar. Imports up 297,000 bbls, 6% in 1st qtr. But Mexican and Dutch shipments up 19.5% and 9% respectively, so each gained share. Shipments from several other large importing countries down: Canadian ?21.6%, UK -13.9%, German shipments -3.5%. Canadian shipments clearly affected by Diageo shifting Smirnoff production to its US plants.

New info shows Miller biz had clearly not yet turned in 1st qtr. Tho Miller shipments up 1.6%, sales-to-retailers down 2.6%, PM reported. Shipments up because of "higher shipments for core brands" and "introduction of SKYY Blue," wrote PM. Retail sales down "reflecting lower retail sales" of Lite, MGD, others. Miller?s mktg, gen and admin costs up $30 mil in 1st qtr.

To get preliminary injunction against Labatt USA, FEMSA had to meet tuff standard of  “irreparable harm,” harm that could not just be compensated by money damages.   US judge ruled FEMSA entitled to its injunction because “there has been a breach of the agreement” by Interbrew against FEMSA in their Labatt USA arm (70% owned by Interbrew, 30% by FEMSA).  He relied on recent case that said “denial of bargained-for minority rights” in and of itself constitutes “irreparable harm.”  Judge ruled there had to be some agreement between Beck’s and LUSA to combine bizzes (Interbrew denied there was agreement), and that triggered clause that apparently gives FEMSA veto power.  At Apr 25 LUSA board meeting, Interbrew decided to proceed with integration tho FEMSA execs on board voted against. 

Interestingly, judge anticipated appeal and said that if “mere denial” of FEMSA's minority rights weren’t enuf,  he would have ruled against injunction because FEMSA didn’t prove “irreparable harm” to its biz going forward.  Perhaps that’s why Interbrew spokesman referred to decision as “wisdom of Solomon,” even tho it lost.  “We will promptly appeal,” Interbrew ceo Hugo Powell said.  “We won’t get all the synergies we were looking forward to” said yet another Interbrew exec.  Interbrew said it "would likely have to wait about 3 months to resolve the dispute," reported Reuters.  Lots more in Beer Marketer’s INSIGHTS.  

Wow!!!  This afternoon, US Dist Ct Judge Martin granted FEMSA tuff-to-get preliminary injunction in its lawsuit to stop Beck’s integration into Labatt USA.  LUSA had already started putting the companies together.  “We’re disappointed and we’re looking at our options,” Labatt USA prexy Steve Cahillane told INSIGHTS at hearing.   Right now, no further steps can be taken to integrate Beck’s into Labatt USA for 30 days.  Expect appeal.  That ain’t best way to start peak-selling season.  More details tomorrow.

 

Consumers in 8 of the top-10 beer drinking countries drank less beer per capita in 2000 (latest yr available). Total alcohol consumption however was up in 9 of those countries because of wine and spirits growth. Wine drinking grew per capita in 7 of the same countries while spirits grew in 6. For example, in Ireland (#2 per capita beer consuming country in 2000) beer consumption down 1.2% while wine consumption shot up 15.7% and spirits up 6.7%. Same story in UK: beer down 3.6% while wine up 8.3% and spirits up 6.7%. In Czech Republic, top beer consuming country per cap, beer grew 0.4% but was outpaced by 3% gain for spirits and 0.6% gain for wine. All figures reported in World Drink Trends 2002.

Fed court’s decision to put on hold Labatt USA’s integration of Beck’s is “major positive” for FEMSA, wrote longtime Bear Stearns Latin American bev analyst Carlos Laboy.  Why’s that? FEMSA got “vital leverage for regaining some control” over its US biz, he sez.  Ain’t over yet, and Interbrew could win on appeal, but Carlos thinks with new leverage FEMSA might be able to buy back Interbrew’s 30% share of FEMSA, end the relationship in US, get more control over ad spending, promos etc, a separate sales force for its brands and/or better profit split. As result of any/all of these, FEMSA’s US volume could grow faster, he added.  If FEMSA shakes free of LUSA, where may it go?  Coors is “best candidate,” in Carlos’ eyes, but Heineken a possibility too.