Craft Brew Alliance and AB Extends Agreement

Discussion in 'Beer News' started by Ranbot, Aug 24, 2016.

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  1. Ranbot

    Ranbot Pooh-Bah (2,463) Nov 27, 2006 Pennsylvania
    Pooh-Bah

    The CBA and AB-InBev extended their distribution agreement for another 10 years. No big surprise there. However there are a few other interesting points in the agreement.

    - The agreement includes a AB-InBev contract brewing for CBA and transitioning production of up to 300,000 barrels to AB-InBev facilties over the next 18 months. The CBA's current contract with City Brewing in Memphis will cease.
    - The CBA will get broader international distribution access on AB-InBev's global distribution network (through subsidiary Ambev) for all of its brands, although initially international expansion will focus on only the Kona brands. (I read elsewhere that they previously tested selling Kona beer internationally in Brazil and Mexico. It must have been successful enough to expand further.)
    - A buyout of CBA was discussed, but decided it was better to stay separate, but obviously closely connected. There was no change to AB-InBev's 31.6% minority ownership of CBA.

    The full article is here: http://www.brewbound.com/news/cba-e...istribution-contract-brewing-components-added
     
    #1 Ranbot, Aug 24, 2016
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  2. jesskidden

    jesskidden Grand Pooh-Bah (3,145) Aug 10, 2005 New Jersey
    Society Pooh-Bah Trader

    Thought this was the most interesting aspect of the renewed AB/CBA deal - first time they've done this for the CBA brands IIRC and it always seemed odd that they went with City when they needed more capacity.

    It might also affect the previous deal CBA made with Pabst giving the latter the option to buy CBA's Redhook brewery in Washington state. If AB is going to brew some of their brands (I assume Kona Longboard Lager is CBA's best selling beer* and the most likely to be done at AB) they'd have even less need for the Woodinville brewery.

    *Hmmm... maybe not as much as I thought. Looks like Widmer Bros. Hefeweizen and Redhook Long Hammer are still selling in the same range for CBA - probably just see Kona more on the east coast.
     
    #2 jesskidden, Aug 24, 2016
    Last edited: Aug 24, 2016
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  3. jesskidden

    jesskidden Grand Pooh-Bah (3,145) Aug 10, 2005 New Jersey
    Society Pooh-Bah Trader

    Apparently there's a bit more to this aspect of the AB-CBA deal, with "guardrails" set up which would allow AB to buy CBA, discussed in the Investors Webcast and explained in a recent "free" Beer Business Daily entry:
     
    #3 jesskidden, Aug 26, 2016
  4. Ranbot

    Ranbot Pooh-Bah (2,463) Nov 27, 2006 Pennsylvania
    Pooh-Bah

    #4 Ranbot, Aug 26, 2016
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