European News (Issue 25)

by Max Bahnson

Divestive Aids

In order to get the EU anti-trust authorities approve their merger, AB-InBev and SAB-Miller have committed to divest a bundle of SAB-Miller owned breweries in Eastern Europe, including Plzeňský Prazdroj, Czech Republic's largest brewing company and makers of Pilsner Urquell. With Heineken, Carlsber and Molson-Coors out of the game due to their respective market weights in the region, eyes have turned towards Asahi, who have already agreed to buy two of SAB-Miller's brands, Peroni and Grolsch.

Analysts, however, appear to believe that an investment is more likely to be for  the Czech Republic's flagship beer, and one of the world's most iconic. Once these sales comes through, and regardless of who will be the buyer, it will be analogous to what AB-InBev did in 2009, when they got rid of a bunch of Eastern European breweries that included Pivovary Staropramen. After being acquired by a Belgian investment fund, those breweries were consolidated into a concern called StarBev that a few years later would be sold to Molson-Coors. This should be no surprise, Eastern Europe has an aging population, sales that are stagnant at best and hardly any brands of value outside their own backyards. 

Photos Courtesy Dojima, Belgian Brewer's Association,  Pilsner Urquell