Tennent's sold to makers of Magners
Just heard that AB InBev has, as predicted, sold off Tennent's to C&C, the makers of Magners carbonated apple-waste drink. C&C will also take over InBev's distribution business in Scotland and Ireland. This is more of a partnership deal than a takeover, based on my brief glance at it. That's good for Tennent's as it protects it from what I thought might happen, i.e. InBev throwing its massive marketing budget into competing against it once they no longer own it.Is it me, or is the price of £180m stupid cheap? I know InBev really needs the cash, but still.
Also interesting is that InBev apparently wants to keep the prestigious Tennent's Super brand for itself.
It's a partnership as regards the main InBev brands: so the warehouse near Dublin airport from which the Staro, Leffe and Beck's Vier kegs are distributed will now be run by C&C under licence.
ReplyDeleteBut A-B InBev no longer have any interest in Tennent's. What's to stop them from running their brands in direct competition?
It's more complicated than I thought. Having sold their on-trade distribution business might be a slight obstacle at first. And yet somewhere in the article it says "non-exclusive distribution rights" in the on-trade. Looks like InBev is planning to rebuild a distribution network to replace the one they've just sold.
ReplyDelete"The Business Purchaser will enter into distribution arrangements with members of ABI for the distribution of certain ABI beer products, including Stella Artois, Beck's, Budweiser, Hoegaarden and Leffe. The Business Purchaser will obtain exclusive distribution rights in respect of Ireland and Northern Ireland (subject to certain carve outs) and non-exclusive distribution rights for certain ABI beer products in the on-trade in Scotland (again, subject to certain carve outs)."
So InBev is keeping the high-volume trade with the pubcos and the supermarkets, and C&C is getting the rest.
I wonder if there are any agreements in this contract not to compete against each other's brands directly (supposing such agreements were legal, I don't know)? You may be right about InBev pushing Stella head to head against Tennent's.
Counter-Q: What's to stop C&C finding a defunct abbey in Ireland and plastering its name on bottles of low-quality dubbel to flog to Tennent's pubs cheaper than Leffe?
A: Lack of imagination, I should think.
Imagination me hole: there's no money in doing that. There's barely any money in selling Leffe in Ireland to begin with and it's just as well the production costs are negligible.
ReplyDeleteWhat really interests me is the rights to distribute Budweiser, since that beer has been brewed and distributed by Diageo and its predecessors in Ireland since 1987. Surely the new guy is going to want a bite of that cherry.