News U.S. Challenges AB-InBev's Purchase of Grupo Modelo

Discussion in 'Beer News & Releases' started by jesskidden, Jan 31, 2013.

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  1. Blueribbon666

    Blueribbon666 Zealot (596) Jul 4, 2008 Ohio

    Interestingly, a couple summers ago I was in a bar in Columbus, Ohio w/a friend and we both spied the return of Schlitz and feeling nostalgic & 1/2 price off domestic happy hour, we ordered a couple..."Sorry fellas, the Schlitz isn't part of the special." To which I replied, "It's a domestic bottle, right? Or is it suddenly imported from Canada?" Bartender says, "No it's domestic, but they are trying to market & price it like a craft, sorry" We settled on Pabst & it's pseudo Canadian cousin Black Label...which as we all know is like apples to apples w/Schlitz...honestly, if this is true how freaking brain dead of the marketing department. I would have liked to have been witness to that meeting of ex New Coke/Crystal Pepsi marketeers.
  2. jesskidden

    jesskidden Meyvn (1,294) Aug 10, 2005 New Jersey

    I thought the Rainier/Mondavi situation was the reverse - Rainier (still under partial Molson ownership) had a share of the winery, until Heileman bought Rainier in the '70's. Rainier history is always confusing to me - since it straddled the US-Canadian border AND two different US brewing companies used the "Rainier" brand name after Repeal- the Seattle/Sicks one and one in SF, CA.

    But, otherwise, I can't think of a lot of cross-alcoholic beverage segment ownership in the US. Schlitz owned a bunch of wineries by the '70's (here and in Europe) but most were sold off as they collapsed, and more after Stroh took ownership of the company. Blatz (once a top 20 US brewery) was under Schenley ownership from the '40's to the '50's until being bought (temporarily) by Pabst. And Pabst had some sort of financial "ties" (with hints of underworld involvement) with Seagrams in the '50's as well. Hamm's was owned by Heublein before being purchased by Olympia (altho' there was some interim local ownership in between IIRC).

    Probably a few other cases I'm forgetting.

    To me, it seems like Constellation is being sort of backed into this deal by AB-InBev- sure, they don't want to lose the Corona and Modelo money but do they really want to become manufacturers? In a stagnant US beer market -even if their facility will be in Mexico and in a beer market segment - imports - that isn't quite as lifeless as US brewed light lagers.

    Still amazes me that the Modelo brands sell at over 10m bbl/yr (probably reach 12 million soon- that DoJ lawsuit put their dollar share of the US market at 7%- more than all the 2000+ craft breweries put together). Only 7 US breweries ever sold over 10 million barrels in the US (AB, Schiltz, Pabst, Coors, Miller, Stroh, Heileman - in that order I think) and it took the first, AB, until the 1960's to do it. It's just sad that Americans will pay "above premium" prices for those sorts of beers that are essentially the same as the adjunct lager beers that all those disappeared also-ran US brewers once brewed, and sold (or tried to) at LESS than premium prices.
  3. dennis3951

    dennis3951 Champion (840) Mar 6, 2008 New Jersey
    Beer Trader

    In the book "American Vintage" Paul Lukacs wrote about it. Soon after Robert Mondavi opened his winery he was so deep in debt that he had to take Rainier in as a partner. Mondavi was able to buy them out 8 years later.
  4. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    That parenthetical is weirdly written, so Im not sure exactly what you meant, but the 7% dollar sure is not greater than all the craft breweries combined. It was 9.1% in 2011. And by volume, craft was over 11MM bbls in 2011, and with growth over 10% again in 2012, I dont think that 12MM will exceed the craft volume total, even if they get to it.

    And looking at some other numbers, Crown Imports was 11.9MM bbls in 2011, which was slightly higher than crafts 11.5MM. So if that is what you meant, yeah that is accurate.
  5. jesskidden

    jesskidden Meyvn (1,294) Aug 10, 2005 New Jersey

  6. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    Still not true though, right? Im pretty sure the 2k+ breweries put out over 12MM bbls in 2012. I guess we are going to have to wait until May to find out for sure.
  7. jesskidden

    jesskidden Meyvn (1,294) Aug 10, 2005 New Jersey

    Well, yeah, until the 2012 totals for all concerned come out, I'm using 2011 figures but (and I agree, it's likely) should the 2000+ craft breweries outsell the Modelo brands, is that really something they should brag about? :grinning: Especially considering that craft had about a decade head-start on Corona.

    Still a pretty sad development that in the last three decades or so of the "craft era" Mexican breweries have captured such a large share of the US market.
  8. michbuggie

    michbuggie Initiate (0) Oct 2, 2009 District of Columbia

    ABI isn't giving up *all* Modelo brands, or am I wrong? I mean, the ones that are not brewed at the Piedras Negras breweries, e.g. Pacifico, would still be owned and distributed by ABI under this revised agreement, right?
  9. jesskidden

    jesskidden Meyvn (1,294) Aug 10, 2005 New Jersey

    According to the revised agreement posted on Constellation's website they would get the "...rights in perpetuity to the Grupo Modelo brands distributed by Crown in the U.S," which currently includes Pacifico.
  10. FunkyMacGroovin

    FunkyMacGroovin Initiate (0) Sep 22, 2009 California

    Here's an article published in the NYT Magazine yesterday focusing on the possible international concerns behind the deal:

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