Unibroue To Be Sold?

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SirIsm
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Unibroue To Be Sold?

Postby SirIsm » Fri Apr 16, 2004 2:05 pm

Got an email from Unibroue today:

Hello,

At the request of Market Regulation Services Inc., Andre Dion, Robert
Charlebois, Serge Racine and their respective associates confirm that they have
received a proposal with respect to the purchase of all of their shares of
Unibroue Inc. and that they are engaged in discussions in connection therewith.

To learn more : http://www.unibroue.com/brewery/040416.cfm
rabbit
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Postby rabbit » Fri Apr 16, 2004 10:15 pm

OK. let's start the pool....my bets are either Sleemans or a Belgian brewery.
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Rob Creighton
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Postby Rob Creighton » Fri Apr 16, 2004 10:30 pm

I know that Sleeman staff toured both Uni and Big Rock a few months ago but I don't know who else has. How about the possibilities of corporate and brand name combo's.

AB - La Fin du Bud (wishful thinking)
Interbrew - Stella et Maud(ite)
SABMiller - SAB U2 - and your mother!
Coors - Terrible...just terrible

okay guys ... take it from here :D
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beanmedic
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Postby beanmedic » Sat Apr 17, 2004 3:41 am

my $ is on sleemans.......and here's to Unibroue saying F*CK YOU
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Postby burgermeister » Sat Apr 17, 2004 12:20 pm

Rob Creighton wrote:I know that Sleeman staff toured both Uni and Big Rock a few months ago but I don't know who else has.


Sleeman's strategy is to buy breweries in each province it has a problem marketing to from out of province. Sleeman already has a brewery in Alberta, so I'd be surprised if they were to take on Big Rock. They have been looking at breweries in Quebec for some time and haven't purchased one yet. They've had considerable success selling into Quebec from Ontario, but I'm guessing that they would want to take a bigger plunge into that market. I wouldn't be at all surprised if Sleeman's bought them - them promptly move the brewing of Unibroue brands to the Maritimes like they did with Upper Canada.
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Postby Wheatsheaf » Sat Apr 17, 2004 1:30 pm

In an ideal world Unibroue would simply say "thanks, but no thanks" or, alternatively, pass into the benevolent hands of a larger, quality-oriented brewery like Moortgat (as Ommegang did in early 2003). If Sleemans ends up buying the company I will be seriously concerned about the high-end beers like Terrible and Quelque Chose meeting the same fate as Seigneuriale Reserve.

burgermeister wrote:Sleeman's strategy is to buy breweries in each province it has a problem marketing to from out of province....They've had considerable success selling into Quebec from Ontario, but I'm guessing that they would want to take a bigger plunge into that market.


The only rationale behind these types of deals is the ridiculous restrictiveness of inter-provincial trade. It ensures that you can buy more Unibroue beers in Buffalo than you can in Toronto, and makes it necessary for the macros to buy breweries in multiple provinces rather than just building a huge plant somewhere and leaving the little guys alone. In the US, a large regional brewery like Sierra Nevada isn't going to automatically become an acquisition target. What would be the point? AB hardly needs more access to the US market, and brews in two days what SN brews in one year. That doesn't mean that the giants aren't trying to limit distribution channels, but at least successful micro and regional breweries can remain independent and focused on producing top-quality beer.
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Postby burgermeister » Sat Apr 17, 2004 1:46 pm

Wheatsheaf wrote:The only rationale behind these types of deals is the ridiculous restrictiveness of inter-provincial trade. It ensures that you can buy more Unibroue beers in Buffalo than you can in Toronto, and makes it necessary for the macros to buy breweries in multiple provinces rather than just building a huge plant somewhere and leaving the little guys alone.


You're partially right here. In fact, the inter-provincial trade restrictions that were in place to encourage breweries to open plants in each province they wished to do business in are no longer. The effective "import taxes" have been eliminated. That's one of the reasons you see Mol/Lab consolidating operations into fewer breweries. The issues now are more cultural - the I don't wanna buy your out of province swill - which really is a very small issue except possibly in Quebec, I don't know. The cost of Distribution is really the bigger factor. The cost of transporting beer across the country is not all that appealing. That's one of the reasons for the Big Rock, Brick reciprocal marketing agreement - Brick brews Red Baron or whatever in Big Rocks facility for the Alberta Market, Big Rock brews Wort Hog in Brick's brewery for the Ontario market - quick access to local distribution (i.e. Brewers Retail Network - something worthy of a rant some other time!)

This kind of thing happens in the States all the time by the way. The bigger "Micro" buying up the smaller guy. I was just in Portland Oregon this past week for a brew festival (among other things). The Portland Brewing company which was the first Brew Pub to open up on Oregon back in the early 80's grew itself into a pretty good sized regional brewery. Along the way they purchased Saxer and Nor'Wester breweries. Portland just got purchased by Pyramid Ales of Washington - a bigger "Micro". Consolidated distribution, access to out of State markets, and regionalized capacity growth are all contributing factors.
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Postby Hop Invasion » Sat Apr 17, 2004 2:01 pm

It would be interesting to see who buys Unibroue in the near future. After reading the Toronto Star, you can't count Molson out as well. This could potentially have Blanche versus Hoegaarden match up in Ontario. The other aspect is that Sleeman does need a brewery outside of Ontario. The Molson aspect seems a little out there since Molson has had tremendous success in recent purchases. Molson has also stated they will be focusing on their core brands.

If Sleeman does purchase Unibroue they would be getting Canada's most obscure and Unique products.
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Postby rabbit » Sat Apr 17, 2004 2:17 pm

Obscure? How is what is possibly the country's best known and most widely distributed micro obscure?
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Postby Wheatsheaf » Sat Apr 17, 2004 2:19 pm

burgermeister wrote:This kind of thing happens in the States all the time by the way. The bigger "Micro" buying up the smaller guy.


Sure, that's just the way business works. But I don't think that it's inevitable--or automatic--that all successful regional breweries in the US become acquisition targets. In Canada, however, it seems that you can only grow so big and grab so much market share before you cease to be seen as a simple craft brewery and begin to be noticed as a worthwhile business transaction to further the expansionist aims of a big macro.
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Wheatsheaf
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Postby Wheatsheaf » Sat Apr 17, 2004 3:31 pm

burgermeister wrote:You're partially right here. In fact, the inter-provincial trade restrictions that were in place to encourage breweries to open plants in each province they wished to do business in are no longer. The effective "import taxes" have been eliminated.


Hmm, I wasn't aware that the laws had changed (perhaps because the effects haven't exactly been obvious). The trickle of out-of-province beers coming into Ontario has hardly become a flood.

As you mention, however, there are still a number of advantages that come with owning plants across the country, such as access to restricted distribution networks (the LCBO and BS, for example) and transportation costs. So some of the inter-provincial barriers may have fallen, but others remain, and the appeal of buying regional breweries remains as strong as ever. How does that saying go? Plus ca change, plus ca la meme chose?
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Postby burgermeister » Sat Apr 17, 2004 3:40 pm

Wheatsheaf wrote:Sure, that's just the way business works. But I don't think that it's inevitable--or automatic--that all successful regional breweries in the US become acquisition targets. In Canada, however, it seems that you can only grow so big and grab so much market share before you cease to be seen as a simple craft brewery and begin to be noticed as a worthwhile business transaction to further the expansionist aims of a big macro.


Agreed. However, I think your first sentence is the most correct. Mol/Lab are more concerned with (domestic) market retention than expansionism (international markets are another story). Their combined domestic market share continues to be eroded by both imports and the bigger "Micros". Still, Mol/Lab have something like 85-90% of the domestic market. Sleeman's now has between 5 and 10%. The remaining 5 to 10% is imports and small micros of which the Micro has the smaller share. Mol/Lab doesn't consider the "Craft" brewer any kind of threat so they've not been really active buying small breweries. Sleeman's strategy is to buy to further erode the Mol/lab market share and to gain market share across all regions in Canada (consistant with your comments above). I wouldn't be at all surprised to see either Molson or Labatt/Interbrew try to take over Sleeman in the not to distant future as Sleeman is the only credible threat to their domestic market share. I rather imagine they regret not having done so years ago.

Kinda long winded agreement, but I couldn't figure out where to finish the thought - sorry. :wink:
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Wheatsheaf
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Postby Wheatsheaf » Sat Apr 17, 2004 5:14 pm

burgermeister wrote:Kinda long winded agreement, but I couldn't figure out where to finish the thought - sorry. :wink:


We're both guilty of this. :wink: I think that what we're both driving at is that if Unibroue is sold, it ain't gonna be due to Sleeman's desire to brew great beer.
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Postby burgermeister » Sat Apr 17, 2004 6:15 pm

Wheatsheaf wrote:We're both guilty of this. :wink: I think that what we're both driving at is that if Unibroue is sold, it ain't gonna be due to Sleeman's desire to brew great beer.


Right on.
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Rob Creighton
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The Molson option may make sense

Postby Rob Creighton » Sat Apr 17, 2004 11:33 pm

Molson making a play for Unibroue has some merit.
Molson has been getting their butt kicked in the high margin premium sector and has zero to compete with the Oland juggernaut except for the lame Rickards line.
This could be an attempt to correct that but I'm not holding my breath that they won't screw it up.

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