By Ian Neubauer

A spate of new acquisitions in the US and European liquor industry are bolstering a theory that foresees the emergence of three or four global brewing juggernauts.

In the US, the world’s largest liquor company Diageo announced it had agreed to buy premium US wine maker Rosenblum Cellars for $118 million. The deal comes in the wake of Diageo’s 2005 acquisition of the Chalone Wine Group and the company’s goal of becoming the leading premium wine maker in the US.

Also in the US, SabMiller, the world’s largest brewer, has acquired 94.7 per cent of Grolsh shares, securing a $1.79 million takeover of the premium Dutch brewer.

In Europe, a deal worth $17.45 billion was made by brewing giants Carlsberg and Heineken to cut UK market leader Scottish & Newcastle (S&N) in half. The deal includes brewing operations in France, Greece, China, the US, India and the UK, and the distribution of top-ten global brands like Strongbow Cider, Kingfisher and Foster’s. (The Foster’s Group sold S&N the rights to produce Foster’s beer in Europe for $750 million in 2006.)

A report in The Australian Financial Review today said acquisitions of this kind lend credibility to the “global giants theory”. The report suggested the Foster’s Group and Lion Nathan—Australia’s two largest brewers—were prime candidates for takeovers. Both Foster’s and Lion Nathan refused to speculate on the theory.

But DVA investment analyst, Casey McLean, said the Australian Competition and Consumer Commission (ACCC) would prohibit the companies from being snapped up.

“The revenue and cost synergies from the creation of global brewing giants would be enormous,” he said. “However, in practice this theory would be hamstrung by competition restrictions. The ACCC is highly unlikely to allow one company to control the assets of both Foster’s and Lion Nathan.”

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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