Around the World – July 2006

23 June 2006 By db staff writer

“standfirst”>This month’s roundup of news from Europe, Asia, and America

AMERICA

US
Cristal’s association with the hip-hop music scene looks set to diminish after comments from Louis Roederer’s managing director Frédéric Rouzaud. When asked by The Economist about Cristal’s popularity in the hip-hop community, he said, “What can we do? We can’t forbid people from buying it. I’m sure Dom Pérignon or Krug would be delighted to have their business.“And these are now the brands that hip-hop MC Jay-Z will be stocking at his chain of 40/40 nightclubs, where he has initiated a boycott of Cristal. The fizz previously sold in his clubs for US$450-600.The association between Cristal and hip-hop began in the 1990s, with a number of artists mentioning it in their songs.

US
Miller has launched new beer cans that literally talk to consumers, as part of its promotional summer activity in the US. The special cans, when opened, tell consumers whether or not they’ve won a prize. The Miller Lite and Miller Genuine Draft promotion, entitled Open Up: The Great Taste of Summer, is supported by an array of other material, such as large interactive talking cans, and is targeted at men aged between 21 and 27. Prizes are all music and sport-related, and include access to the pits at Nascar, or backstage passes to music festivals.

EUROPE

Poland
In a story worthy of Biblical miracles, a lake in Poland has been turned into 30% vodka after a technical malfunction at a nearby distillery. Chemists verified the high level of alcohol in the Bracholinskie lake in the Wielkopolska region of Poland. According to the Warsaw Business Journal, news of the vodka spread quickly, as farmers from local villages rushed to the lake to collect their share. The journal also reported that local women were “in despair”, calling vodka a “demon drink”. One was quoted saying, “If God does not help us, everyone in the neighbourhood will be stinky drunkards.”

Portugal

A hail storm has caused considerable damage to vines in the Douro with the Pinhão and Rio Torto valleys the worst affected. Initial reports in the Portuguese press reported very high losses of the year’s crop. Some farmers in high areas reported a total loss of their crop, and appealed for financial help from the government. In other areas, such as parts of the Quinta da Cavadinha vineyard, some grapes were saved by excess leaf and shoot growth that had yet to be cut back. Joint managing director of Symington Family Estates, Paul Symington, said that the storm would not result in a major shortfall in production. But his “deepest concern is for those Douro farmers who have lost all or part of their crop on which they depend for their annual income”. 

UK
UK brewer and pub operator Greene King acquired rival company Hardys & Hansons for £271 million last month. The deal adds 268 new pubs to Greene King’s current 2,400. The bid was not the highest, but Rooney Anand, the chief executive of Greene King, spoke of the good cultural fit between the two companies. Hardys & Hansons has a history dating back to 1832. One of its pubs is Ye Olde Trip to Jerusalem under Nottingham castle, reportedly the oldest in the UK. Other bidders for the company apparently included Wolverhampton & Dudley, as well as Robert Tchenguiz. The acquisition has drawn criticism from the Campaign for Real Ale, which believes the move will limit consumer freedom of choice. Greene King looks set to continue to brew Hardys & Hansons’ key brands.

ASIA

Uzbekistan

Baltic Beverages Holding (BBH) is entering the emerging beer market in Uzbekistan, with a new brewery planned for Tashkent. The investment, worth £34m, is being made in partnership with Sarbast Plus. BBH is equally owned by Scottish & Newcastle and Carlsberg. It currently operates 18 breweries in six countries in Eastern Europe. It is also the market leader in Russia, with 35% of the market there. The new Tashkent brewery will be operational next year, and will have a capacity of 1m hectolitres per annum. The market for beer in Uzbekistan has been consistently increasing over recent years, as has its economic prosperity. The average annual consumption of beer in Uzbekistan is 10 litres per capita, and BBH believes that this has the potential to grow even further.

China
InBev has completed its acquisition of the Fujian Sedrin Brewery in China. The sale was expected to be completed by the end of the year, but all necessary regulatory approvals have now been obtained ahead of schedule. This means InBev should begin benefiting from the transaction sooner than was originally expected. In particular the acquisition will give InBev a greater presence in affluent southeast China. InBev already has operations in eight provinces and the addition of the Fujian Sedrin Brewery will secure its position as one of the largest brewers in China. The new foreign-owned company will be known as InBev Sedrin, and represents an investment equivalent to ?614m.The Sedrin brand, now part of InBev’s portfolio, has become its fifth largest brand globally by volume. InBev sold 36m hectolitres in China last year. However InBev’s competitor Foster’s has had less luck in China and recently made the decision to exit from Chinese brewing altogether after 13 years in the market.The company is selling both its Chinese brands and Shanghai operations to Japan’s Suntory, but will retain its own brands and distribution rights in China.

© db July 2006