Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Not Made in the USA: Miller Beer

By

If you've got the time, Britain's got the beer.

PrintPRINT
The sun never sets on the company that added "Miller time" to its worldwide beer lineup.

That's not deft marketing from Milwaukee, but the inexorable force of globalization. Miller Beer, once an American icon, is now owned by SABMiller -- the world's second-largest brewer.

The company's stock trades on the London Stock Exchange. Shockingly, a "tall, cold one" means nothing in Britain, where the former imperialists drink beer warm. It's enough to make company founder Frederick Miller sip white wine in heaven, pinky aloft.

Miller Beer's corporate takeover underscores three basic points: First, beer is pretty much beer and therefore little more than a commodity product. Second, economies of scale allow an efficient company to clobber its competition, selling more of whatever it's peddling. Third, this tends to favor one-size-fits-all products.

Frederick Miller took over Plank Road Brewery in 1855 and slapped his name on it, a move that eventually led to a string of ads proclaiming "If you've got the time, we've got the beer." In 1966, W.R. Grace & Co. agreed to buy 53% of the company from Miller's granddaughter, who objected to alcohol. In 1969, Phillip Morris, now Altria (MO), bought Miller from W.R. Grace for $130 million, outbidding Pepsico (PEP). In 2002, South African Breweries bought the company for $3.6 billion in stock and assumed $2 billion in debt.

Before you get too deep in your cups, understand that Miller's fate isn't punishment for its controversial ad campaign that featured two voluptuous women in a catfight in wet cement. In 2007, SABMiller and Molson Coors (TAP) agreed to combine operations in the good ol' USA in a joint venture ingeniously named Miller Coors. Molson is a Canadian company. The joint venture operates in the US and Puerto Rico, but not Canada, where beer and hockey are more popular than sex.

Worldwide, SAB Miller makes about 200 brands in about 100 breweries, including Miller, Grolsch, Peroni, Castle Lager, and China Resources Snow Breweries Shenyang. Call it niche marketing for the international masses.

In May, SABMiller wrapped up the acquisition of its Polish subsidiary, Kompania Piwowarska. This suggests that there will soon be a capitalist behind every glass of beer, if there isn't already.

Foreign companies have snapped up other American names as the consolidation of the beer industry continues. In 2008, Belgian brewer InBev bought Anheuser-Busch for about $52 billion. In addition to the Clydesdales, the deal included Budweiser -- the world's largest selling beer -- as well as Bud Light, Busch, and Michelob. InBev is now the world's largest brewer.

The folks who own Miller are clever and pitch the brew to American tastes, emphasizing thirsty suburbanites who admire a lawn as big as Kansas, those who bemoan the hapless French for losing two world wars in the twentieth century but had the moxie to come up with mayonnaise, and the glories of a white-bread and bacon sandwich washed down with -- you guessed it -- a Miller Beer.

In the future, maybe Miller Beer will adopt this advertising slogan in an effort to expand sales of its weasel water beyond the US:

Good for man,
Good for beast,
Good for bread instead of yeast.
Hooray for Miller Beer!


Nah. It doesn't rhyme. Better leave the selling of an overseas-owned American icon to the foreigners.

Click Here For Next Article Click Here For More
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE