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Former G. Heileman Brewing Co. chief is discouraged by company woes.

Former G. Heileman Brewing Co. chief is discouraged by company woes

The former head of G. Heileman Brewing Co. recently said he is discouraged by the company's troubles since it was bought by Australian Alan Bond.

"It's unfortunate," Russell Cleary said in a telephone interview from La Crosse, WI, where Heileman is based. "I certainly hope they get their act straightened out for the sake of the employees."

Cleary said he would not speculate on whether Heileman might be sold. A spokesman for Heileman referred calls to Bond's headquarters in Australia, but officials there could not be reached for comment.

"It's a tough business and he has an enormous amount of debt," Cleary said, referring to Bond.

Through a series of acquisitions, Cleary built Heileman into a national power before it was bought by Bond in 1987 for $1.3 billion.

However, the purchase of Heileman has contributed to Bond's mounting debts which are reported to exceed $4 billion. Consequently, last week Bond announced he was selling half of his brewery empire to New Zealand's Lion Nathan Ltd., for more than $760 million.

Under the transaction, Lion Nathan will buy a 50-percent interest in and management of Bond Corp.'s Swan, Tooheys and Castlemaine breweries in Australia, and the group's hotel and associated liquor interests.

Bond said in a statement that the brewery deal was another "positive step in the restructuring and strategic refocussing" of his group. He added it would create a "formidable brewing alliance" region, aimed at the Pacific and Asia.

The proposal, as reported on earlier, calls for brewing assets to be folded into a new joint venture company, Australian Breweries Pty. Ltd., equally owned by Bond Corp. and Lion Nathan.

Analysts say, however, Bond is bound to lose money whether he sells Heileman or decides to keep it, as he has done, at least for the next 12 months.

"Heileman today is to some extent painted in a corner," said Robert Weinberg, professor of marketing management, Washington University in St. Louis.

"The question is whether you operate it and bleed a little or take a big hit and move on," added John Collopy, an industry analyst and chairman of the Milwaukee investment firm Cleary, Gull, Reiland, McDevitt & Collopy Inc.

While the overall beer market has stagnated, Heileman's share has eroded, falling from a high of 9.4 percent in 1983 to a current level of about seven percent. Industry observers say Heileman was worth far below $1.3 billion when it was sold, and Bond would have a hard time finding a bidder.

"His helmsmanship helped hold it together better than anyone could," Collopy said.
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Title Annotation:Russell Cleary
Publication:Modern Brewery Age
Article Type:Interview
Date:Oct 9, 1989
Words:439
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