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Tuesday, November 20, 2007

SAB Miller to buy Grolsch

Saw this news and couldn't help thinking (amid the screaming madness of finishing this damnable book) about how frenzied and almost silly all this looks. A-B just took over the importation of Grolsch last year, and now SABMiller is buying it out from under them, which is going to set off another small wave of wholesaler realignments, and chagrin at A-B over the money they spent on some very slick ads on the brand. Did SABMiller do it just to screw them? Probably not, but it must have made it tastier.

SABMiller has been calling the A-B strategy of getting more upscale brands to their wholesalers through strategic alliances a "funnel" strategy; that's what the whole business is starting to look like at the macro level. All the brands and brewers that make mainstream pilsneroid beer are being pushed and herded and squeezed into the ever-tighter neck of the funnel... No, wait. It's not a funnel, it's a horn. A sausage-stuffing horn. Yeah. It's all getting chopped and blended and made into one thing. I like sausage, but I don't think I like this.


Stonch said...

Is the US a big market for Grolsch currently?

Alan said...

More like a hot dog horn.

Anonymous said...

All of these buy-outs and joint ventures are escalating, along with marketing blitzes, partly because I'm sure A-B's North American arm feels threatened by MillerCoors here (and now elsewhere). And, other European companies are attempting similar moves (i.e. Heineken/Carlsberg going for Scottish & Newcastle). Also, the state of the US (and therefore global) economy is not as healthy as it once was.

So, I feel as though they're hedging their bets and trying to secure more markets to stay profitable. However, tying into that, could the hop and malt availability scare have something to do with it?

I know A-B has one of the largest hop fields in the world, but is it possible that their competitors and themselves are worried that, even in three years, yields may not bounce back?

Regardless, it has all the markings of a war. I'm interested to see what happens to the little guys.

Lew Bryson said...

No, not really huge.

Sir Mentho,
I don't really think the hops and malt thing is driving anything. This kind of M&A activity has been going on for 20 years, it's just coming to its inevitable peak as the big'uns are all that's left, and they start to eat each other. We see much the same thing in pharmaceuticals -- a lot of hyphenated names there -- saw it earlier in automobiles.

A war? Maybe, but it won't last long. We're in the end stages. I actually think it's only going to be good for the little guys.