S&N Step Changes
With the recent acquisition of Scottish & Newcastle by Carlsberg and Heineken, Chloe Gold finds out what this will mean for the travel-retail side of these businesses
SINCE the European Commission approved the Carlsberg and Heineken acquisition of Scottish & Newcastle, it has opened up fresh opportunities within travel-retail for two of the fastest growing brewers in the world. The £7.8bn deal, which was signed off on April 29 this year, has not only significantly enhanced the profile of each brand but also strengthened the global footprint through the addition of leading market positions. Under the deal, Carlsberg is taking over Scottish & Newcastle’s assets in France, Greece, China and Vietnam, and has acquired its shares in Baltic Beverages Holding (BBH).
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“The S&N transaction represented a fundamental step change for Carlsberg,” Carlsberg president and
CEO Jorgen Buhl Rasmussen reveals. “This is a transformational transaction for Carlsberg. Carlsberg owned BBH in Russia together with Scottish & Newcastle. Now, in Russia, we have full ownership of the market leader Baltika. Being the only owner, we can also accelerate the development and innovation process there. This is a market where we expect a growth in the beer consumption in the years to come. We now have full control of our destiny in Russia and other BBH territories, and I am excited about the new opportunities this will present to us, although we are still in early stages of investigating potentials.”
Undoubtedly, the move has opened up a wide spectrum of potential opportunities for Carlsberg to expand its brand portfolio through the introduction of international premium brands, which shows that Carlsberg has come a long way since its first export in 1868, when a barrel of beer was sent to Edinburgh in Scotland.
“Internationally, Carlsberg will in the future focus on our four very strong international brands: Carlsberg,
Tuborg, Baltika and 1664 from Kronenbourg,” says Rasmussen. “The acquisition of Kronenbourg has given us a market leader position in France and a number two position in Greece through Mythos. Carlsberg Pilsner is globally a very well-known and strong brand, mainly focusing on football. In Russia and Eastern Europe Tuborg is the strongest international brand. The Baltika brand has its base in Russia, but is also a very strong international brand sold in more than 60 countries.”
Commenting on whether the S&N beer ranges that Carlsberg has taken on will change or undergo any
facelifts, Carlsberg’s marketing assistant, Anders Øllgaard, notes: “Most products will probably at some point undergo a design change or facelift, but Carlsberg does not intend to change any of the products we have acquired right away. Most design changes come as a natural development of the brand and not something we force on to the brand. [...] We aim to be a key player on the duty-free market and constantly improve our business. The future will surely mean more acquisitions for Carlsberg – but for the time being, we have our hands full with integrating our new business.”
For Heineken, the S&N acquisition means it will be responsible for businesses in the UK, Ireland, Portugal, Finland, Belgium, India and the US. Heineken chairman and CEO Jean-François van Boxmeer comments: “This is a significant strategic step for Heineken. It gives us undisputed leadership in Europe and creates significant opportunities in profitable markets to grow the premium Heineken brand. Our proven ability to create value from mature markets coupled with the step-change in revenue growth will drive our future expansion. I look forward to welcoming the Scottish & Newcastle employees into our business and learning from their unique experience and skills. [...] With the recent acquisition of Scottish
& Newcastle, we will be adding a number of premium brands to our portfolio for travel-retail, allowing us to meet consumers’ desire to try different products, which will include Strongbow, the number one global cider brand; John Smith’s, the number one UK ale brand; and Newcastle Brown Ale, which is one of the fastest growing-speciality brands within the US market.”
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