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Miller buys 5% of Milwaukee distrib.

Miller Brewing Co of Milwaukee, WI, has bought a 5% stake in its Milwaukee County wholesale distributor. Miller Brewing reported last week that the acquisition of a minority stake in Miller Brands-Milwaukee LLC will help the company better recognize wholesaler needs.

"This encourages even stronger relationships with our distributors," Jim Mortensen, senior vice president-sales and distribution, Miller Brewing, told the Milwaukee Journal-Sentinel.

Miller spokesperson Scott Bussen said that this deal marks the first time Miller Brewing has owned a stake in a wholesaler since the early '80s, when the company sold off its few remaining wholesale operations.

Bussen downplayed talk of a "grand plan" for Miller to return to the beer distribution tier.

However, beer industry consultant Mark Rodman said that the purchase deal was noteworthy. He pointed out that Anheuser-Busch has been pushing for changes in state laws to allow the company to acquire stakes in its wholesalers around the country.

Miller Brewing's stake in Miller Brands "looks like it's in lockstep with the Anheuser-Busch program," Rodman told the Journal-Sentinel.

"This is a glimpse of the new paradigm for funding rich consolidations and gaining more than a modicum of greater control," Rodman said. "My suspicion is the Miller Milwaukee distributorship ultimately will have a common footprint as Jerry Sheehan's AB-GBIC Beachwood operation there. Recalling the Heineken-Miller coalition to negotiate and fund the acquisition of Oak and Boening, this model looks a little bit familiar. Imitation by Miller is the greatest form of flattery for A-B."

Miller's Mortensen has noted that A-B's #1 market share has given its distributors advantages in the marketplace. At the April sales meeting, he said it would be necessary for more Miller and Coors wholesalers to consolidate. Such consolidations, which have accelerated, give the wholesalers more resources to compete with A-B wholesalers, he said.

An equity investment by Miller could give a wholesaler additional financial resources to do a consolidation, Rodman observed.
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Title Annotation:acquires minority stake in Miller Brands-Milwaukee LLC
Publication:Modern Brewery Age
Article Type:Brief Article
Date:Jul 2, 2001
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