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Molson U.S.A. moves to consolidate Martlet/Century brands in Miller houses.

Molson U.S.A., a subsidiary of the Miller Brewing Co., is beginning an effort to consolidate the Martlet and Century brands, in most cases by shifting them into Miller houses.

After Miller bought Molson U.S.A. in January, analysts speculated that a reshuffling might be in the cards.

In a letter from Molson U.S.A. president John Barnett to wholesalers, he spoke of a "substantial realignment of Martlet and Century brands in selected states, in an effort to strengthen our long-term viability as an importer."

Barnett says that the changes are being made after a review had been conducted to determine the most effective integration of the distribution network, and noted that "changes in distributor assignments do not reflect poorly on wholesalers who will no longer carry the Martlet and Century brands."

Barnett promised that Molson will "arrange purchase of inventory and provide distributors with compensation for the loss of Martlet and/or Century brands. We believe these arrangements are not only unique but fair and equitable as well."

According to industry sources, the deal will offer wholesalers compensation based on their one-year gross margin for the brands, minus the cost of goods sold (and including spoilage, rebates, deposits, taxes, credits and discounts) for the fiscal year ending August 31, 1993.

Currently the move affects wholesalers in "select states," including some houses in New York and Connecticut. Wholesalers affected were given ten days to reply.

Earlier in the year, Miller Chairman (then president) Jack MacDonough told Modern Brewery Age, "Franchise laws are such that it's really up to the people who have those brands now, as to what they wish to do. If a Miller wholesaler wants to buy a Molson brand from another distributor, that's their prerogative. We are not making distribution changes."

There were reports do some of the affected wholesalers are considering legal action, as they consider the action "unwarranted" and the compensation "inadequate."
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Title Annotation:Miller Breweries USA Inc.
Publication:Modern Brewery Age
Date:Sep 20, 1993
Words:320
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