Constellation Brands to Acquire Ballast Point Brewing & Spirits

It should be pretty clear. AB-Inbev owns the Modelo group. So for every case of their beer that is sold, they benefit from that, as its their company.

Constellation just owns the production facility in Piedras Negras and the importation rights into the US through Crown Imports.

So as the Modelo Brands (Corona, Modelo, Victoria, etc.) increase their sales in the United States, AB-Inbev makes more money (they own the brands) and so does Constellation (they own the facility and the import rights).

 

Haha maybe sculpin will carry a reasonable price tag now.

 

Does Constellation have any shady business practices we should know about?

 

Quick, everyone mark-up the price of your 6-packs! Premium prices = premium valuation!!

 

The only reason Constellation has the scale and finances to execute this deal is because of the assets it scooped up from the ABI-Modelo deal. Basically, Corona sales just paid for Ballast Point.

 

Hm I wasn't aware that money was passing between the 2 companies for beer sold from the Nava facility. I thought the deal stipulated that Constellation would get the production/distribution rights to the US, but didn't know they were paying InBev ongoing for the beer sold
Note: I just found an article which referenced the licensing of the rights to the US, so yes there is money changing hands

 

As long as the beers and their recipes stay the same the owner shouldn't matter... right? It could mean more money for resources to make those beers, hopefully more often and in larger quantities... Though you never know what a corporation is going to do when it takes over a smaller business.

 

Saw my first Sculpin billboard (a big, one, too) in Hollywood the other day, in between the IPO announcement and this one. Been seeing Sculpin on draft at all sorts of places I wouldn't normally see it. Just visited the giant Stone-shaming new Miramar BP location recently.

I guess I could kinda smell a change in the air, but I didn't realize it would be this.

Will cautiously keep my eye on them, but I'm a little leery of this. At least it isn't BMC?

 

If Bud made Bourbon County Stout a year-round beer that wasn't rare as hens' teeth, I'd side with you on this one.

 

It will be just a matter of time till they destroy this brand! They ship all they're bottled beer in non climate controlled rail cars from Mexico, and company that does that does not care about it's product.

 

These "all the craft breweries will be bought up by Big Beer!" threads are getting better than the "when will the craft beer bubble burst?" threads.

 

I'll quibble with this a bit. It always seemed to me the efforts of the last 30+ years were focused first on producing a high quality/high character product that was markedly different from BMC. The fact that it could be done independently was indeed a point of pride, and carried symbolic, as well as practical, significance, but it was secondary to making good beer. Again, IMO. And, again, I'm sure motives varied from brewer to brewer.

 

Hardly. Monopolies generally continue only when protected by the government. Otherwise, they collapse in relative short order. Look at all of the wasted money by European governments in fighting Microsoft! What did the market do all by itself? No one would consider MS Windows a dominate force in the market anymore. This was due to market changes, not government lawsuits.

If there are alternatives for a product, that means there is competition in the market. Competition means there cannot be a monopoly by definition. With over 4,000 brewers in the USA alone, that is pretty far from being a monopoly.

 

Also not hard for me to see this as further legitimization of the power of craft in the marketplace. Constellation/ABInBev/Heineken/et al aren't morons, and they sure as hell aren't morons with their money -- if they're doling out big cash, it's because they've researched the sh-t out of the market and believe these craft brands have a real possibility of making them a lot of friggin' money.

It's funny, we hoot and holler over wanting craft to be acknowledged and respected. Then, when brands get bought out -- an ostensible acknowledgement and show of respect -- we hoot and holler over being bought out. Just find it kind of ironic.

 

It's as simple as this: I support the small craft beer brewer and will not give my hard earned money to a huge corporate brewer and their billion dollar profits.

 

Did anyone look at the original SEC IPO filing?
http://www.sec.gov/Archives/edgar/data/1648798/000119312515346618/d87353ds1.htm
Our annual net revenue increased from $14.0 million in 2012 to $48.9 million in 2014, representing a CAGR of 86.6%.
Some nice insights on their growth, and I guess, what Constellation Brands saw intrigued them. I think that's a big one above. I'm sure they see growth and revenue reaching $200 million in just three more years. And 10 years past that, pure profits.

It also says a lot about selling yourself and just saying stuff to say stuff. When the money comes calling, you can't say NO. Is that hypocrisy? That whole SEC filing says so much about home grown roots etc...

I've always felt these deals only help a select few. The owners, founders, and possibly the early investors. I doubt the grunt workers get a raise (now that they are owned by another brand, why would they allow that?). They may get a decent one time bonus of some sort.. Now instead of working for an end goal as a small knit team, you are working for the BIG BOYS. They sold you on a vision, and said SCREW you.

BP just hit the NM distribution channels this past May. I was in heaven for awhile. Then it felt like distributors were giving us back dated cache of GF sculpin.. How is what is on the shelf just two weeks ago fresher than the stuff currently on the shelf? Add in a price point some $3-5 higher, and this is all too easy to pass on them in the future.

 

Not going to happen. The high price point has a lot to do with why Constellation paid a billion for it. The last thing they would want to do is drop the price.

 

Holy balls; 1BIL. They were expecting to raise $172.5M with their IPO.

 

And maybe stuff like Grapefruit Sculpin will start appearing on more taps? If they brew the same beer, but can make it more affordable and put it on more taps, I can get behind that.

I'm just bummed this didn't happen after the IPO because I wanted some shares with the thought that a buyout was coming at some point. Had no idea they'd pre-empt the IPO but it makes a lot of sense.