Beverage Dynamics

Beverage Dynamics May-June 2013

Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.

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Brewer consolidation is shrinking the beer world, but more import brands in fewer hands is a mixed blessing for retailers and consumers. By Michael Sherer I Modelo it didn't already own. That handful of deals has changed the brewing landscape in the U.S., as well as the picture for imports. Indeed, even the definition of an imported beer may be changing (more on that in a bit). In 1971, for example, four brewers controlled nearly 70% of the U.S. beer market by volume. Three of them—Schlitz, Falstaff and Schaefer—have been out of business for decades. In 2010, according to data compiled by the Beer Handbook and Beer Marketer's Insights, A-B InBev and MillerCoors controlled almost 80% of the U.S. market by volume. Crown Imports, Heineken USA and Diageo/Guinness accounted for another 10.5%, with the remainder coming from all others. Globally, A-B InBev and SAB/Miller continue to snatch up small breweries, adding new brands and local brewing capacity to their portfolios. On one hand, the proliferation of brands is good news for consumers. In theory, globalization of the industry means that consumers, whether they live in Peoria or Poughkeepsie, can get brews from all over the world that were formerly out of reach. In theory… f the beer industry was a Disneyland attraction, you might hear "It's a Small World After All" playing at the entrance, but the ride would be more like "Pirates of the Caribbean," big, fast ships full of rapacious pirates sailing the Seven Seas, plundering and pillaging as they go. With all of Captain Jack Sparrow's charm, of course. But it isn't. This is business, big business. The past decade has seen beer companies brew up a half-dozen of the largest industry deals in history. Following South Africa brewery SAB's purchase of Miller in 2002, Molson and Coors merged in 2003; SAB/Miller then put together a deal with Molson Coors to form MillerCoors, a conglomeration of their U.S. business; and a joint venture of Carlsberg and Heineken purchased Scottish & Newcastle in 2007. The biggest deal so far, in 2008, was Belgian brewer InBev's $52 billion hostile takeover of Anheuser-Busch (and InBev itself was a merger of Brazilian brewer AmBev with the Belgian Interbrew). In 2010, Heineken Leading import brand Corona purchased Femsa in a bid to ward Extra, and its sibling Corona Light, off the competition from the latest feature an extensive marketing deal, AB InBev's recently approved program for Cinco de Mayo and the purchase of the 50% of Grupo summer selling season. 42 • Beverage Dynamics • www.beveragedynamics.com • May/June 2013 Ups And Downs P roliferation, while great from the standpoint of offering consumers more choices, also

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