News

Flying Dog Brewery will close its Denver brewery and move all production to Maryland, where it has operated a brewery since 2006.

Eric Warner, president and CEO of Flying Dog, announced that the company is concentrating its brewing operations at the state-of-the-art facility in Frederick that it acquired from Frederick Brewing. Warner also announced that the company recently raised $3 million in capital to fund continued development of its brands.

Flying Dog Brewery in Denver will produce its last beer in January 2008. The company will maintain its corporate headquarters in Lower Downtown Denver, and Flying Dog’s 13 craft beers will continue to be distributed throughout Colorado.

Increased costs of raw materials, including hops and malt, combined with the loss of contracts from smaller craft brewers were a significant factor in the decision, Warner said.

“By concentrating the brewing operations in Maryland, we will become a more efficient business, which is very important given the extremely competitive conditions in the craft beer industry,” he said.

“Aside from the concentration of production, we’re proud to say that our customers won’t notice a difference,” Warner said. “We are committed to providing our customers in Colorado and throughout the country with the highest-quality craft beers that they’ve come to know and love.”

The Maryland facility, where 70% of Flying Dog’s beers are already being brewed, has more modern brewhouse equipment and a more spacious warehouse and cooler.

“The building our Denver brewery is in is old and needs a minimum of $1 million in infrastructure improvements to keep up with our increasing production levels and product quality standards,” Warner said. “This year alone, we saw a 20 percent unit growth – our strongest yet. Concentrating our operations at the Maryland facility will allow us to the meet the growing demand by surpassing current production levels.”

There will be no layoffs as Flying Dog Brewery’s Denver production team will all be offered jobs at the Maryland brewery including relocation packages.

Boston Beer Co. has made it official that it will not build a new brewery in Free Town, Mass.

The brewer of Samuel Adams beers sent a letter to officially end its relationship with Freetown, eight months after the brewer accepted tax incentives from the town and announced plans to invest about $200 million to build the brewery.

Instead of building a new facility in Freetown, Boston Beer bought Diageo North America, an existing brewery in Lehigh Valley, Penn., for $55 million. The brewer plans to spend another $50 million to renovate the plant, and will start operations there next summer.

Boston Beer will write off $3.4 million in capital investments, including engineering, for development of the Freetown property.

Oops. Might the resurrection of Primo beer hit a snag? Or is Primo Water an interloper?

Primo Water Corp., headquartered in Winston-Salem, N.C., is defending its rights to the Primo name, which it has used since 2005, against Pabst Brewing Co., which owns Honolulu’s Primo Brewing & Malting Co., the maker of Primo beer.

The legal essentials:

Last month, Pabst announced plans to reintroduce the beer next week in up to 40 Oahu restaurants and bars, and in bottles this spring.

Primo Water requested that the U.S. District Court in North Carolina order the cancellation of Primo beer trademark registrations and rule that Primo Water’s use of the name does not infringe on Pabst’s claims to the Primo beer trademarks or weaken the beer’s brand.

Pabst asked in a Sept. 7 cease-and-desist letter to Primo Water that the company stop using the Primo trademark on bottled water, according to a filing submitted Thursday by Primo Water. Pabst warned in an Oct. 31 letter to Primo Water that it “is prepared to litigate” before federal courts.

Jack Curtin has more interesting details about Primo beer.

Bell’s Brewery, which pulled its beers from the Illinois market last year after a dispute with distributor National Wine & Spirits Inc., once again is pouring beer in Chicago.

The new brands are called Kalamazoo Amber, Kalamazoo IPA and Kalamazoo Porter and are brewed with different recipes than the Bell’s brands sold around the country.

It can be confusing but Chicagoist has an interview with Bell’s founder Larry Bell (thanks to Steve H for the link).

Bell expects NWS to sue to halt sales, so stay tuned.

Heineken and Carlsberg boost their offer for Scottish & Newcastle.

S&N says no.

“The board, having consulted its advisers, has no hesitation in rejecting this wholly inadequate proposal as it substantially undervalues the unique strengths and market position of S&N,” the UK brewer, led by chairman Sir Brian Stewart, said in a statement.

Danish firm Carlsberg and Dutch brewer Heineken plan to carve up S&N if they come up with a successful bid.

No surprise that American brewers aren’t the only ones feeling the pinch of price spikes for hops and malt.

– Gerhard Ilgenfritz, president of Germany’s private brewer’s federation, said the brewery-gate price of a 24-bottle crate was likely to rise 1.00 to 1.10 euros ($1.46 to $1.60) at the start of 2008.

He said the world price of aromatic hops had doubled in the past two years and the price of brewers’ barley had tripled.

– In the U.K., the Society of Independent Brewers warned the price of a pint might increase 10p to 15p (which amounts to 20 to 30 cents). British brewers are looking at increases of nearly 40% for barley compared to last year and 100% for some hop varieties.

“After wages, raw materials represent the biggest single expenditure by small brewers who now face the dilemma of whether to put up their prices and lose trade or absorb the higher costs and take the risk of their businesses becoming economically unsound,” said Peter Amor, SIBA chairman.