Global Forces and European Brewing Industry

VARGEES LOUIS

INTRODUCTION
A company that makes beer is called either a brewery or a Brewing Company. The oldest brewery in the world is believed to be the German state-owned brewery in the city of Bavaria. we can trace its history back to 1040 AD

Work in the brewery is typically divided into 9 steps: Malting, Milling, Mashing, Lautering, Boiling, Fermenting, Conditioning, Filtering, and Filling. Few Brewing Companies are: 1. Microbrewery 2. brewpub 3. craft Brewer

In mid of 2000s the major center for production of Beer in the world was Europe. Its production was twice the production of USA. In 2003 Data monitor report says that the their was a slight fall in beer in most of Europe

REASONS FOR FALL IN SALES:

1. Rapid growth in leisure, and traveling to other country.

2. People (consumers) becoming more aware of Health and fitness. 3. Increase in demand for flavored alcoholic beverage. Increase in consumption of Wine by 26% in 2002

RESTRUCTURING

Acquisition

The purchase of one firm by another

Merger

The combination of two firms into a new legal entity A new company is created Both sets of shareholders have to approve the transaction.

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Amalgamation

A genuine merger in which both sets of shareholders must approve the transaction Requires a fairness opinion by an independent expert on the true value of the firms shares when a public minority exists

Sales

its the process of selling of the existing shares of the company to increase the companies finance.

http://www.caclubindia.com/articles/types-of-corporate-restructuring-

WHY CORPORATE RESTRUCTURING..??

Sales enhancement and operating economies Improved management Information effect Wealth transfers Tax reasons Leverage gains Managements personal agenda

In 2002 5 largest global brewers accounted for only 30 % of production volume, where in the cigarette industry, the five leading players had a 60 percent market share.

So Brewer companies started merging and amalgamating with cigarette industry.

In 2005 scottish and newcatle had acquired the danone French brewing operations as well as Bulmer cider.

In 2003 Eatern Europe and China, acquired finlands biggest brewery.

Coors, another large American brewer, had gained European market entry by purchase from interbrew in 2002.

Southafrican breweries has also been extremely active. In early 2002 they merged with Interbrew.

CHANGE IN WORLD MARKET.

Position 1 2 3 4 5 6 7 Company Anheuser Busch South African Breweries Heineken InterBrew Carlsberg Am Bev Scottich and new Castel Country of Origin USA South Africa Netherlands Belgium Denmark Brazil UK

8 9
10

Coors Modelo
Kirin

USA Mexico
Japan

The fastest growing Niche in 2003 was within the youth market. Sales of Flavored beer mixed with either lemon, soda or cola has increased market share up to 30 % in 2002. This accounted for 3 % of the annual beer consumption.

MARKET SHARE IN 2003

Market Share in 2003

34% Interbrew, Coors & Carlsberg Scottish & Newcastle 66%

HEINEKEN (NETHERLAND)

In 2004 Heineken was biggest and most global of the European brewery business. its Brand is available in more than 170 countries. In UK it owns more than 110 breweries in over 50 countries and export all over the world.

STRATEGIC OBJECTIVE FOR HEINEKEN

To remain one of the top global brewers To be more profitable per hectoliter than other international brewers. To build good brand portfolio To remain Independent.

FUTURE OF BREWING INDUSTRY

From 2002 to 2007 world market for Brewing Industry will increase by 35% in Eastern Europe and 28% in Asian Pacific region.

Annual global beer report forecasts sales of 1.5bn hectoliters in 2005

THANK YOU!!