AROUND THE WORLD

Canada – Labatt, the Canadian arm of brewing giant InBev, has pleaded guilty to a charge of illegally influencing discounted beer prices…USA – Constellation Brands has laid out its best and final offer of C$33 cash per share for all common shares of Vincor International Inc…

Americas

Canada

Labatt, the Canadian arm of brewing giant InBev, has pleaded guilty to a charge of illegally influencing discounted beer prices in Quebec.

The brewer, which will be fined C$250,000 (E181,938), announced that it regretted actions cited in the case, a spokesperson for the Competition Bureau said. Labatt commented, “Labatt respects and abides by the provisions of the Competition Act and will comply fully with the Quebec Court order to inform our independent retailers in Quebec, in writing, of the provisions. The court acknowledged that the actions which led to the charge did not reflect Labatt corporate policy and that Labatt has never previously been found guilty of any criminal offence.”

USA

Constellation Brands has laid out its best and final offer of C$33 cash per share for all common shares of Vincor International Inc.

This enhanced offer provides shareholders with a 48% premium above the Toronto Stock Exchange closing price on 8.9.05, the day before Constellation first made a bid. Constellation has communicated that it would be prepared to offer shareholders C$35 per share in a board-supported transaction, but it has so far been unable to negotiate with the Vincor board. The enhanced offer extends the expiration date for selling shares until midnight on 8.12.05.

For further details of this bid see Business News page 74.

India

India has decided not to sign a multi-lateral wines and spirits registry, which has been proposed by the EU, claiming that the country would not benefit from the treaty. The proposal, which was negotiated at the last WTO summit in Cancun in 2003, is designed to legally bind all WTO members on the issue of protecting Geographical Indications (GI).

The US and Australia have already opposed such a system.

EUROPE

France

French wine producer Les Grands Chais de France has acquired leading Loire Valley producer LaCheteau for an undisclosed sum. The owner of the JP Chenet brand has bought LaCheteau’s stocks and brands as well as a 130-hectare property, Château Mongueret. A specialist in sparkling Loire brands, LaCheteau also owns the Kiwi Cuvée brand.

As France’s biggest wine exporter, Les Grands Chais de France sells 17% of all French bottled wine exports.

Meanwhile, a report on alcoholism commissioned by France’s Ministry of Health has outraged winemakers by recommending that  mandatory health warnings should be placed on wine and spirit bottles similar to those displayed on cigarette packets.

The report also calls for the introduction of alcohol awareness classes in schools and the tougher enforcement of existing laws that ban alcohol sales to under-16s, as well as suggesting that alcohol should be banned from company canteens.

UK

Danish brewer Carlsberg is set to axe 70 jobs in the UK in an attempt to stay competitive in the stagnant conditions in the beer market.

Brewers in the UK are suffering from a shift in beer sales from the on- to the off-trade, where margins are tighter.

Carlsberg runs two breweries in the UK, and jobs are expected to be lost at both sites, as well as at distribution depots across the country; however it is not thought that either of the UK operations will be closed.

For the year to October 29.10.05, the Carlsberg brand has seen off-trade volumes rise 23.9% with sales by value up 24.3%. Carlsberg is the fourth-largest brewer in the UK with a 13% share of the market.

In wine news, Constellation Europe is celebrating the news that its best-selling wine brand, Hardys, which includes such labels as Nottage Hill, Varietal Range and Stamp, has become the first wine in the UK to sell 5 million 9-litre cases in a year (MAT to WE 03.09.05, total on- and off-trade). At the same time it was announced that the brand owner’s second largest label, Stowells, has recently broken through the 4 million case barrier.

Spain

The Spanish Wine Federation (FEV) has reported that wine exports from Spain for the first nine months of this year have remained static. Exports for the period were up by 0.5% on the corresponding period in 2004, reaching E1.1bn. Exports have in fact dropped in volume terms, down by 4.5% to 1.06bn litres. The fall in volumes has been attributed to a decline in bulk table wine exports, which had dropped by 13% in volume, and as much as 17% in value, partially due to large harvests in France, Italy and Portugal.

However the average export price per litre was up by 5% as exports of bottled table wine were up 11% to E123m, and exports of Cava and other sparkling wines were up by a steady 5%, reaching E174m.

Asia

China

Japanese brewer Kirin is extending its presence in China, the world’s largest beer market, by buying out its brewing partner, Zhuhai Kirin Brewery. Japan’s second-largest brewer will take full control of Zhuhai, buying the remaining 40% stake for around Y4.8bn (E34m). Kirin will also be investing over Y10bn (E71m) in the new venture.

Kirin additionally plans to invest in the construction of a new brewing plant in China’s southern Guangdong province, which will double its brewing capacity in China. The brewer has announced that it will be concentrating on three key areas in China – the northeast, the central coastal area and southern China.

Japan

In other brewing news, the holdings unit of Japanese Brewer Sapporo Breweries is said to be poised to buy Kikkoman Corp.’s spirits sales and distillation operations.

The purchase of Kikkoman’s distilled spirit and other alcoholic beverage businesses would include production facilities for refined sake and other liquors.

A report suggested that Sapporo plans to complete the acquisition by 1 April 2006, but the planned purchase is not expected to affect Sapporo’s earnings outlook for this year.

© db December 2005