Breweries

City Brewing took a giant step toward acquiring the Latrobe Brewing facility as union workers approved a new contract.

The basics:

The union voted 113-9 on Sunday to accept a two-year contract with the La Crosse company, said George Sharkey, a union business agent for about 120 of the employees.

“There were concessions, but in the light of things … I didn’t leave the employees much of a choice,” Sharkey said. Members accepted some wage concessions, he said.

Latrobe, owned by Belgium-based InBev SA, has been the brewer of Rolling Rock since 1939, but the brand was bought in May by Anheuser-Busch Cos. Inc., which plans to brew and distribute the beer out of New Jersey next month. InBev SA, the world’s largest brewer by volume, has been negotiating with City Brewing over the sale of Latrobe Brewing.

City Brewing now will inspect the Latrobe brewery as part of the due diligence process, City Brewing President Randy Smith said Monday. Completing the due diligence process could take as long as 60 days but more likely will take 30 days, he said.

While much of the attention has turned to the fact that Rolling Rock is new being brewed in New Jersey (though Anheuser-Busch’s labels claim a link to Latrobe).

But let’s not forget it was InBev that decided to sell the Rolling Rock brand and that was ready to shut down the brewery. Yet InBev benefits from the deal, because instead of just shuttering the brewery it will make a little extra money from the deal.

The Pittsburgh Tribune-Review reports that union workers at Latrobe Brewing Co. are expecting to have a tentative contract with City Brewing Co. ready for a vote on Sunday, a deal that could keep the plant open.

On the beer business front:

– Drinks Americas announced that it has selected package designs submitted by Beacon Branding for the upcoming re-launch of Rheingold Beer. Drinks Americas plans to re-launch Rheingold in Metro New York this coming October. Rheingold Beer has been sold and marketed in New York since 1883 and was acquired by Drinks Americas last October.

In addition to 6, 12 and 24 pack bottles and 6, 12 and 30 pack cans, Rheingold will go to market in a “modern, ultra-chilled designer metallic bottle” and also is looking to reestablish the “Rheingold Chug-a-Mug,” an integral part of the brand’s history.

– Heineken proved that $50 million will still buy you something. The Dutch brewer lifted its profit outlook for 2006 after sales of its new Premium Light beer fared better than it originally forecast. The company now expects comparable growth of 10% or better.

It said the successful launch in the U.S. of Heineken Premium Light, with volumes expected above the target of 400,000 hectoliters (84.5 million pints) for the year, was a strong growth driver. Premium Light has been on the market since March, supported by a $50 million marketing budget.

– Mexican brewer Grupo Modelo, maker of top U.S. import Corona, has made Constellation Brands its distributor for the United States and Guam.Constellation now imports Modelo’s Mexican beer portfolio in the U.S. West Coast, and will take over from Modelo’s East Cost distributor Gambrinus.

The Miller-supported Brew Blog notes that although Anheuser-Busch owns half of Modelo it was something of a loser in negotiations since it was reported to be in the running but didn’t close the deal:

. . . rumors swirled that A-B was seeking distribution rights for Corona Extra as part of its “funnel” strategy to bring imports to its restricted wholesalers who have not participated in the import surge.

Brew Blog also reports: “As noted by Beer Marketer’s Insights, the deal will make Barton a much bigger player in the U.S. beer indsutry. Based on 2005 shipments, Barton will be at 10.5 million barrels, compared to 5.1 million barrels before the deal. It will be ‘close to 12 [million] barrels in 2006 at current growth rates. That’s nearly 6 share, [two times] Pabst and vaults Barton to #4 distributor in the U.S. ahead of Heineken USA.’”

The loser, of course, was Gambrinus.

Another week of negotiations between Latrobe Brewing’s union employees and LaCrosse, Wis.-based City Brewing began yesterday in Greensburg, Pa.

Although progress has been reported a July 31 deadline looms, when the plant where Rolling Rock was brewed (remember, Anheuser-Busch bought the brand and is moving production to New Jersey) will close.

As detailed in many blogs (including here) Anheuser-Busch continues to experiment with new products and to take new approaches to marketing (it’s Here’s to Beer campaign) BUT that doesn’t mean the brewing company hasn’t given up it’s biggest-kid-on-the-block ways.

A-B has wrapped up the exclusive alcohol sponsorship for the Super Bowl through 2012, and is adding other sports to its long list of sponsorships.

Anheuser-Busch wont’ say how much it spends on sports advertising, but the figure has been estimated at $300 million.

The fifth-generation president and owner of Pottsville-based Yuengling & Son Brewery president Dick Yuengling, 63, says that looks forward to handing the nation’s sixth-largest brewery over to his four daughters, each of whom works for the 177-year-old company.

Speaking at a Lancaster Chamber of Commerce & Industry meeting, Yuengling said he has no reservations about making such an unprecedented move.

“It could work very well. You might see a major brewery with four women owning it. I think that would be kind of neat.”

Boston Beer Company’s plan to build a brewery in Freetown, Mass., has run into opposition. Voters will decide the issue Monday at the special town meeting.

Boston Beer still hasn’t decided if it would develop a brewery in Freetown, but if the measure is approved and the company goes ahead a brewery could be producing Samuel Adams beers in 2008.

“We feel as if in this point in time we do not have the infrastructure. We do not have available water and sewer,” said David Theriault, chairman of the town’s finance committee. Theriault, emphasizing that the town should have a water usage and sewer line plan before finalizing plans or negotiating TIFs. “There could be problems with Fall River with only allowing a certain amount of water.”

It is interesting that residents of one town aren’t sure they want a brewery, while those in another – Latrobe – are fighting to keep their brewery (and the jobs it provides).