Cobra up for sale

The Indian entrepreneur, Karan Bilimoria, owned Cobra beer is up for sale for an estimated GBP 200 million. Cobra beer is looking for a strategic partner to unwind its full potential. Investment bank Rothschild and City Capital Corporation have been appointed for contacting potential buyers like Carlsberg, Heineken, Inbev and Molson Coors. Earlier Cobra had been approached by Diageo, the world’s largest spirits producer, for a possible stake but the talks failed.

Recently Cobra had raise GBP 15 million through a private placement for expansion projects. The company's revenue grew 34% last year. This year it expects 44.4 million pounds in sales and is aiming to touch 100 million pounds by 2009.

Mr Bilimora ruled out the sale as the only option of raising equity, he is also contemplating a strategic tie-up with an international beverage company or a listing in the LSE or the BSE.

SAB, UB file lawsuit against AP Govt

SABMiller India and United Breweries (UB) have jointly filed a lawsuit against the Andhra Pradesh government for not revising the beer procurement price since 1997. This is despite the fact that the retail price has seen a 300-400 % jump in the same duration. The two brewers in a joint petition filed with AP high court argued on the ground that such policies were adversely hurting the companies as the cost of the raw materials and the logistic costs have gone up dramatically and the 1997 procurement price of Rs 200 per case is not at all justified.

AP is the largest beer market of the country with SAB deriving 30% and UB deriving close to 18% of their annual beer revenue from the state. The recent hikes in the price of malt, sugar and the increasing oil prices are having a drastic effect on the bottomline of the two companies. Earlier this year SAB was forced to close its brewery in AP for about a month as it was not able to cope up with the increased costs. Only after a dialogue with the government that the brewer decided to continue its operations in the state.

Foster's voted as the "Best Mild Beer"

The recently concluded INDSPIRIT awards 2008 saw Foster’s being voted as the “Best Mild / Premium Beer” in India with the award for the “Best Strong Beer” going to Kingfisher. In a hotly competitive segment Foster’s outplayed the likes of Kingfisher, Budweiser, Carlsberg, Tiger, Stella, Beck’s and many others to be crowned as the best mild beer. The mild beer segment is witnessing a surge in competition with major global players like Inbev, Carlsberg, APB making a foray into the Indian beer market. Kingfisher Strong won the award in the strong category.

The results of the awards are as follows:

WHISKY CATEGORY
Best Bottled in Origin Whisky :Johnnie Walker Black Label
Best Bottled in India Scotch Whisky :Teacher’s Highland Cream GO
Best Super Premium Whisky : Antiquity Blue Ultra Premium
Best Premium Whisky : Blenders Pride
Best Semi Premium/Deluxe Whisky: Royal Stag
Best Regular Whisky: Bagpiper
Best Indian Single Malt: Peter Scot

RUM CATEGORYBest Premium Rum : Bacardi Superior
Best Regular Rum: Old Monk
Vodka Category
Best Premium Vodka Smirnoff
Best Semi-Premium Vodka: White Mischief

BRANDY CATEGORY
Best Regular Brandy: McDowell No. 1

BEER CATEGORY
Best Strong Beer: Kingfisher
Best Mild/Premium Beer: Foster’s

WINE CATEGORY
Best Wine Producer Chateau Indage
Best Wine Marketer Sula Vineyards
Best Exported Wine Omar Khayyam, Chateau Indage

CATEGORIES FOR INDIVIDUAL EXCELLENCE
Top Entrepreneur of the year Abhishek Khaitan (Radico Khaitan Ltd.)
Top Executive of the Year Raju Vaziraney (Radico Khaitan Ltd.)
Top Marketer of the Year Shekhar Ramamurthy (United Breweries Ltd.)
Man of the Decade Vijay Rekhi (United Spirits Ltd.)
Top Marketing Initiative of the Year Magic Moments
Fastest Growing Brand Budweiser
Best Innovation at INDSPIRIT 2008 UB Beer
Best Promotion at INDSPIRIT 2008 Beam Global Spirits & Wine
Best Stall at INDSPIRIT 2008 Mohan Meakins (Tilaknagar Industries Ltd.)

Source: www.indspirit.in

Beck's Sell Off

The market is abuzz with the speculation that Inbev might sell off its Beck’s brand and its local unit to the German market leader Dr. August Oetker KG. The division is stated to be worth close to $2.6 billion. The sell off would include the Diebels brand and is intended to raise capital for the recent acquisition of Anheuser Busch for $52 billion. Inbev plans to sell five of its units lying outside the main division. The sell-off is aimed to expedite its debt repayment. Dr. August Oetker KG currently holds close to 15% of the German beer industry and is looking to consolidate its position further with the Beck’s acquisition. InBev sold about 7.5 million hectoliters (6.3 million barrels) of Beck's in 2007.

Inbev completes Anheuser Busch acquisition

The acquisition of Anheuser Busch by the Belgian brewing giant, Inbev has finally happened. The new $100 billion conglomerate has been named as Anheuser Busch Inbev and has become the largest producer and seller of beer, brewing one-fourth of the world's beer and one of the top 5 consumer goods group of the world. The merger totaling $52 billion is the largest ever acquisition in the brewing world with Inbev shelling out dollar 70 per share of Anheuser Busch.

The new company will have net sales of about 36 billion dollars a year, offering consumers about 300 brands, including Anheuser's Budweiser and Bud Light, and InBev's Stella Artois, Beck's, Leffe and Hoegadden.

Carlos Brito would be the new CEO and Anheuser-Busch CEO August Busch IV will take a seat on the new brewer's board. Anheuser-Busch InBev will have its global headquarters in Leuven, Belgium, but will also retain A-B's traditional HQ in St Louis.
The deal is to be financed partly through debt and partly through a short-term equity bridge loan. Inbev has taken up a loan of $45 billion, however the $9.8 billion rights offering has been deferred by 6 months owing to the global financial crisis. Inbev plans to sell off some of its assets as well as the Anheuser’s entertainment and other assets to raise close to $7 billion.

Diageo planning to take a 15% stake in USL

Finally the news of Diageo planning to take a 15% stake in the Vijay Mallya owned United Spirits (USL) has been confirmed. The deal is expected to be to the tune of 450- 500 million USD valuing USL at around 3.5 billion. The USL deal is expected to be pegged at double the current USL’s price of Rs 771. Diageo had earlier entered into a JV with Radico Khaitan to gain a foothold in the Indian Spirits market. The JV seems to be running into doldrums if Diageo goes ahead with the proposed stake. USL currently enjoys a 55% market share in the Indian Spirits market.

Diageo tight lipped on the Khaitan Split

Diageo seems to be tight lipped on the speculations of its planning to exit its joint venture with Radico Khaitan in India. Diageo had entered into a tie-up with Radico Khaitan in 2006 to gain a foothold into the Indian Spirits market. However the market is abuzz with the news that the multinational is looking to pick a stake in the Indian Billionaire owned United Spirits. Diageo’s stake in United Spirits would mean curtains down to the Khaitan-Diageo pact. The Group's brands include 8PM Royale, 8PM Bermuda XXX, Contessa, Old Admiral VSOP, Black Cat and Whitefield and Magic Moments. Analyst believe that the company has a 10% stake in the Indian Spirits market.

APB to come up with a new brewery

Asia Pacific brewery (APB), a long-standing joint-venture between Heineken and the Fraser and Neave group is planning to come up with a new brewery in Goa. This is in lines with the plan of the company to consolidate its presence in India. Apart from the new brewery coming up in Goa, APB is looking for a location for another plant in the country.

The Goa brewery is to have a production capacity of around 350,000 cases. The company seems to be looking at consolidating its presence in the south with this brewery. Recently the Indian market has seen a flurry of activity with many global players vying the Indian market. The annual alcohol consumption in India is at a dismal 1 liter/annum and with a population base of over 1.1 billion; India definitely seems to be a lucrative market.

APB has in its portfolio brands like Baron’s Strong Brew, Tiger and Cannon. Currently APB has a brewery in Aurangabad and has a partnership with the Andhra brewer Mr. C K Jaipuria. Sources close to APB have hinted at the possibility of brewing ‘Arlem’ lager in the Goa brewery

Types of Beer

Lager:The term ‘lager’ in German means ‘storage’. Lagers are normally pale to golden colored beers, rich in carbonation and generally have less alcohol content compared to their ale counterparts. Beers are normally classified on the basis of the fermentation technique employed. There are some varieties of yeast which do top fermentation and some which do bottom fermentation. Lager is a bottom fermented beer and are best served chill (2-5 degree Celsius). Typical examples are Foster’s, Royal Challenge, Haywards 5000, and Kingfisher.

Ale:Ale is the other type of beer which is brewed by the top fermenting yeast. It is normally fermented at 15-24 degree Celsius. At these temperatures, yeast produces significant amounts of esters and other secondary flavor and aroma products, and the result is often a beer with slightly "fruity" compounds. Real ale is produced using traditional techniques and without pasteurization. They have lower carbonation, higher alcohol content and should be served at a higher temperature (10-15 degree Celsius) compared to lager.

Pilsner, sometimes pilsener or simply pils, is a pale lager, developed in the 19th century in the city of Pilsen, Bohemia (Plzeň in the Czech Republic). A modern Pilsner has a very light, clear color from pale, really pale up to a golden yellow, and a distinct hop aroma and flavor. Czech Pilsners tend toward a lighter flavor with good examples being Pilsner Urquell and Staropramen, while those in a German style can be more bitter (particularly in the north, e.g. Jever) or even "earthy" in flavor. On the other hand, Dutch (Heineken, Amstel) and Belgian Pilsners (Jupiler, Stella Artois) have a slight sweet taste.

Stout and porter are dark beers made using roasted malts or roast barley. Served at cool temperatures. Examples are Haywards Black and Guinness. Various types of stouts are: Dry or Irish stout, Imperial tout, Porter, Baltic porter, Milk stout, Oatmeal stout, Chocolate Stout, Oyster stout, Coffee stout.

Weizen: Wheat beer is a beer that is brewed with a significant proportion of wheat. Wheat beers often also contain a significant proportion of malted barley. Wheat beers are usually top-fermented (in Germany they have to be by law).The flavour of wheat beers varies considerably, depending upon the specific style.

India Pale Ale, abbreviated IPA, is an ale that is light amber to copper in color, medium to medium-high alcohol by volume, with hoppy, bitter and sometimes malty flavor. IPA is a style of beer that is usually included in the broader category of pale ale. It was first brewed in England in the 18th century. Today, IPA is a popular style of beer among American craft brewers.