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Guinness PLC acquires All Brand Importing for $21M.

Guinness PLC acquires All Brand Importing for $21M

In a well-telegraphed move, Guinness PLC announced the acquisition of All Brand Importers at a press conference January 30th. Speculation about the possibility of an acquisition had been rampant in the industry for some time. Guinness Importing Company president Mike Hughes announced the $21 million purchase, noting. "For once the rumors were right."

The All Brand acquisition makes Guinness Importing Company (GIC) a significant force in the import category, placing it third behind Van Munching and Barton/ Gambrinus, and significantly enlarging the company's portfolio. The purchase brings a number of new brands to GIC, including Moosehead, Dos Equis, Sol, Superior, Clausthaler and Pilsener Urquell.

The purchase further expands Guinness' interests in the U.S., following on the heels of the December acquisition of the Sundance soft drink line from Stroh. "The purchase of All Brand reflects our committment to developing our interests in the U.S. beverage market," Hughes said, "and I'd be very surprised if it's our last move."

There has been recent speculation that Guinness might step even further into the U.S. beverage market with a bid for Heileman or Stroh. In answer to questions, however, Hughes said Guinness has no plans for such a move into the U.S. brewing industry anytime soon. "Although we think we're smart at Guinness," he said, "I don't think we could do any better than anyone else."

Commenting on the All Brand acquisition, Hughes said, "We think this is a significant development, and a harbinger of things to come. A broad perspective on this industry shows every category changing through consolidation," he observed, "leaving a smaller number of stronger, smarter players. This trend has reached the import category, which has been hitting negative numbers lately and facing more aggressive domestic competition. The result will be greater consolidation among importers, and we wanted to lead that consolidation.

"We have high ambitions for this market place," Hughes stated, "and we had a vision of what these two companies could do together. All Brand Importers possesses both excellent brands and smart people," he said, "making it a compliment to Guinness Importing. This changes GIC from a small importer to a major player."

Hughes noted that attention would be paid to brand positioning for GIC's newly-expanded portfolio, which now includes two non-alcoholic malt beverages. There was some question whether GIC would take over Foster's Lager as part of the deal, and Hughes stated the company is involved in discussions with the brand owner.

Brian Baldock, chairman and managing director of Guinness worldwide, was on hand to emphasize the significance of the acquisition announcement. "I felt it was an important enough issue for me to fly to New York," he said, "to impress upon people that this is important news for Guinness PLC.

"To put on my brewing hat for a moment," Baldock said, "I'm keen on emphasizing the large size of the beer market, and its importance to the world economy. The conventional wisdom is that it's a mature, dull market, but people overlook the fact it's growing one to one-and-a-half percent a year. That growth translates to four million pints a year," he noted, "which is nothing to sneeze at. I feel the beer market is widely misunderstood," he continued, "and underestimated. Expenditure on beer is equal to the amount spent on clothing and twice that on soft drinks."

Most of them are dominated by domestic interests. In contrast, Guinness is now brewed under license in 36 countries, from Ruanda to Finland, and is even available on draft in Moscow. In terms of profit per hectoliter," he said, "only Kirin and Labatt now surpass Guinness. My friend August Busch used to send me profitability charts every year. When we drew even with Anheuser-Busch this year," he noted, "I sent August a few charts of my own tucked in with my Christmas card."
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Publication:Modern Brewery Age
Date:Feb 5, 1990
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