Tuesday, November 04, 2003

Oligopoly brief: Interbrew After twelve years of almost frantic acquisitions, Belgium-based Interbrew is now the third largest brewer in the world. It's not a company many have head about, partly because its products still retain their local brand names. In fact, the company terms itself "the World's Local Brewer." But it has become a global power. Interbrew was formed in 1987 by the merger of Brasseries Piedboeuf (Jupiler), then the #1 Belgian brewer and #2 Brasseries Artois, the brewer of Stella Artois. The company has a foothold in the US, having purchased in 1995 the #2 Canadian brewer Labatt and its Rolling Rock US subsidiary, It also sells widely in the US its global Bass, Beck's, and Lowenbrau brands. Interbrew will be the number #1 beer company in Germany, on the completion of its recently announced acquisition of Spaten, the company that brews Lowenbrau, along with previous holdings like Dinkelacker, Beck's, and St. Pauli Girl. Stella Artois, the company's flagship general-purpose lager, is very popular through Europe. And the company has moved aggressively into markets in Eastern Europe and East Asia, snapping up smaller local breweries. It's #1 in Hungary, Ukraine and Croatia, and #2 in Russia, Bulgaria, the Czech Republic, and South Korea. It is interesting how the beer industry produces friendly enemies. Interbrew brews Budweiser in Canada and South Korea, even though the world's #1 brewer, Budweiser, is a major rival. Interbrew also brews Danish rival Carlsberg's brand for the US and Canada. The rapid growth through acquisitions of Interbrew, along with SAB Miller, Heineken, Carlsberg, and others is a phenomenon that is rapidly changing the beer world, as we've pointed out before, swallowing up small independsnt brewers. Here's an analysis from renowned beer expert Michael Jackson who sees the homogenization and standardization of beer that happened in the US, now happening world wide "With the exception of Guinness (a stout) and Bass (an ale), all the widely known international beers are of the same type (very distant, dumbed down, derivatives of Pilsner lager, with little to distinguish one from another." The cause, he thinks, is the acquisitions fever of global beer companies. As one of our principles has it, oligopolies tend to converge, in their strategies and in their products. This is a new round of takeovers, on an unprecedented scale. The big brewers all now see their market as being the world. They will continue to present their international-style beers as super-premiums, somehow superior to national or local brews, but how can this be? A beer that sells to everyone must offend no one, and therefore can hardly delight anyone. International beers can sell only if they appeal to the lowest common denominator of taste. They are the beer world's answer to McDonald's.                   Interbrew brands by country Country Brands Global Brands Bass,  Beck's, Lowenbrau, Stella Artois Australia Castlemaine Belgium Belle-Vue, Hoegaarden White, Hougaerdse Das, Julius, Jupiter, Leffe, Piedboufe, Safir, Vieux Temps Bosnia Ozujsko Bulgaria Antika, Burgasko, Kamenitza, Pleven Canada Alexander Keith, Kokanee, Labatt China Jingling, Yali, Zhujiang* Croatia Bozicno, Izzy, Ozujsko, Tomislav Cuba # Kristal, Bucanero* Czech Republic Branik, Ostravar, Klet, Mestan, Staropramen, Velvet France La Becasse Germany Diebels, DIMIX, Dinkelacker, Franziskaner, Gilde, Haake-Beck, Hasseroeder, Spaten, St. Pauli Girl Hungary Borsodi Sor Italy Tennent's Luxemburg Diekrich, Mousel Mexico * Bohemia*, Carta Blanca*, Dos Equis*, Sol*, Tecate* Montenegro Niksicko Namibia # Windhoek* Netherlands Dommelsch, Hertog Jan, Oranhjeboom Romania Bergenbier, Hopfenkonig, Noroc Russia Kinskoye. Sibirskaya Korona, Tolstiak, Volzhanin Serbia # Jelen Slovenia # Fructal*, Union Spain Dimm* UK Boddington', Murphy's, Tennent's, Wadworth 6X, Whitbread Ukraine Chernigivskoye, Rogan, Taller, Yanten USA Rolling Rock # minority stake * by license 4:48:42 PM

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