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January 2003 update table of contents
The onward march of Interbrew through Dutch beer culture continues apace. Their planned closure of Oranjeboom will end four centuries of beer-making and a couple of decades of lager excretion in Breda.
The ales of the Hertog Jan brewery in Arcen remain conspicuous by their absence from the Interbrew website's map of the future. As the Arcener Bierbrouwerij, this was one of the flagships of the Dutch brewing revival back in the Eighties.
The brewery is the last of the great escapologists. Founded during World War One in the neutral Netherlands a kilometre or two from the border with Germany, it jumped ship from the Skol disaster in 1981 via an innovative management buy-out, then ducked and dived its way through the many rationalisations of the Nineties almost unscathed. Will it manage to escape the will of the new Emperor somehow? Watch this space.
Interbrew has also bought up Astein, a formerly family-owned distributor of "special beers" in the Netherlands, plus the hitherto family-owned Bruges drinks wholesaler Van Maele. The latter is the biggest beer wholesaler in West Flanders and one of Belgium's ten largest. Revolutionary theorists please note: in the post-Marxist world of empire-building, you first dominate the production, then strangle the means by which others can produce (e.g. by closing their specialist maltings), then cut off their means of distributing their products.
Sadly they had to part company with their British-born CEO, Hugo Powell, a year ahead of time and somewhat swiftly, just before Christmas. This was despite continued growth in global sales of 16.8% in the first nine months of 2002, to 65.1 million hectolitres per annum. Hopefully he will not have had to halt the building of his Tudor-style mansion on the outskirts of Toronto, said to be the largest single house in Canada.
Hugo's replacement is American John Brock, who has headed up Cadbury-Schweppes for the best part of two decades. Both Cadbury and Schweppes were companies founded on Quaker ideals by far-sighted business families who wanted to offer the wretched masses alternative pleasures to strong drink. Hence mineral waters and chocolate. Are we to prepare for Leffe Tripel NA and powdered Hoegaarden (just add milk)? Or is this just another step on the road to the slow annihilation of beer brewing worldwide?
Meanwhile there are fascinating rumours about the future of Heineken in the Netherlands.
The third (1998) edition of the Guide predicted the closure of one or both of Big H's regional Dutch breweries - Ridder and Brand. In practice, neither closure occurred and the Guide was fairly nice to Heineken in its 2002 edition. We should have known that this would lead to an immediate change of plan. In October, Heineken announced the virtually immediate closure of Ridder, which had graced the banks of the Maas river near the Wyck bridge in Maastricht since 1857. Since then a flurry of rumours have suggested that Brand may be for the chop also, though the amount of investment that went in there in the Nineties suggests this would be a bit of a lush decision.
Production of Ridder's main product, the wheat beer Wieckse Witte, will be taken on by the Heineken brewery in 's Hertogenbosch - provided it does not close too. Which we say because ...
More intriguing is the flurry of rumours about the rationalisation or closure of the two Heineken mega-breweries at 's Hertogenbosch and Zouterwoude. The purpose of these plants is to produce beer cheaply. If the same beer is cheaper to produce in another country, say in the old Eastern bloc, then who cares if the family that gave the stuff its brand name was Dutch. This is business. And besides the old boy's been dead a year now.
It is clear that Heineken HQ is re-organising itself and will lose the eccentric Freddyisms that had made it the acceptable face of big business in the Netherlands. Whether the men in dark Mercs will remove production to countries with lower wages and less workforce protection remains to be seen.
If they do downsize their Dutch production facilities, the big question will be whether they then import "foreign made" Heineken. And if they do, whether anyone will mind. A generation capable of considering alcoholic lemon squash and soda to be an exotic drink may have lost its faculty of discernment altogether, so nobody holds out much hope or consumer resistance. Maybe they could call it Heineken Import?
Meanwhile Big H has bought up large chunks of the beer markets in Egypt, Lebanon, Costa Rica, Nicaragua, Panama and Kazakhstan - and that was just October.
After that they snuggled up close to Germany's fifth largest brewer, Brauergilde Hanover AG, only to find that the little tart ran off with Belgian lothario Interbrew for a cool 500 million Euros. This adds to Beck's of Bremen and Diebels of Düsseldorf to give the Belgian group nearly 4% of the massive German market.
Interbrew, having had their fingers burnt by Russia's floundering rouble, has decided to concentrate on China. The World's Local Brewerİ, has been active in China since 1984, "assisting" the Zhujiang Brewery in Guangzhou and the Five Star Brewery in Beijing. In 1997, it bought up the Nanjing and Jinling Breweries. In October they bought K.K. Brewery of Zheijang and Yunan provinces, which came with three breweries and a bottling line, plus shared control of the Lion brewery. KK's yearly volume is just under 3 million hectolitres. It cost $ 42 million, which is not that much more than poor old Hugo's house. They have since added about a quarter of Zhujiang.
We have yet to see how Belle Vue's industrial gueuze will go down with beer-lovers in the local bars of the Yangtze Delta.
S&N (Alken-Maes) have not been inactive. They took over Finland's Hartwall brewing group in November.
January 2003 update table of contents
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