LOS ANGELES -- Anheuser-Busch Inc.'s 10-year alliance with Japanese brewer Kirin in the United States has expanded, with the American brewer assuming marketing and selling responsibility for the Kirin brands, the two companies said.
A-B has brewed and distributed Kirin Ichiban and Kirin Light for Kirin in the United States since 1996. The new agreement assigns A-B full oversight of the Kirin brands in the United States, while Kirin retains trademark responsibility for the brands.
American consumers have a great interest in high-end [image-nocss] Asian cuisine and culture, including Asian beer, said August A. Busch IV, president of A-B. We are aggressively expanding our range of high-end beers to meet the diverse needs of our consumers. The Kirin beers are of the highest quality and have enormous potential, as the Asian influence is rapidly growing. This new agreement enhances a truly global relationship between our two companies. Now, we also share a deeper commitment to each other's success.
Referring to the new agreement, Hitoshi Oshima, CEO of Kirin International, said, Kirin has been working with Anheuser-Busch in the U.S. market for almost 10 years, and we have great respect for them. Anheuser-Busch and Kirin share mutual understanding to enhance brand value through consumer focus and quality product.
A-B brews Kirin beers at its Los Angeles brewery. Kirin beers are distributed in the United States through the A-B network of 600 independent wholesalers.
The new agreement transforms the relationship from contract brewing to licensed brewing, with A-B assuming profit and loss responsibility for the business in the United States. The new marketing role for A-B succeeds Kirin Brewery of America LLC, a joint venture between the two companies formed under their 1996 agreement. The distribution network is unchanged. The two brewers have also had a relationship in the Japanese market since 1993, where Kirin brews, distributes and sells Budweiser, St. Louis-based A-B's flagship brand.
A-B also owns a 50% share in Grupo Modelo SA de CV, Mexico's leading brewer, and a 27% share in Tsingtao, the No. 1 brewer in China.
Separately, Grupo Modelo and Constellation Brands Inc. recently formed a joint venture for the purpose of importing and marketing Modelo's Mexican beer portfolio in the United States and Guam for a 10-year period, effective Jan. 2, 2007.
The joint venture offers Modelo brands excellent long-term growth opportunities in the United States with the establishment of a unified import system, said Grupo Modelo Chairman and CEO Carlos Fern andez. Constellation Brands has demonstrated its commitment to our brands for more than a quarter-of-a-century, and we could not ask for a better partner to work with us in the U.S. This agreement allows Grupo Modelo to move to a single importer, which will create strategic alignment across the nation and the ability to create even more growth in one of the world's most dynamic beer markets. The joint venture will benefit from the existing momentum and popularity of our brands with consumers, add value to our business and expand our mutual relationship, which dates from 1978.
Constellation Brands' Chicago-based Barton Beers subsidiary began importing Modelo brands to the United States in 1978, serving 25 mostly western states.
This is a unique opportunity for Grupo Modelo and Constellation Brands to build a business alliance that was never before possible, and to build it in such a way that the joint venture will seek to maximize the future growth potential for the top Mexican beer portfolio. We believe the JV will have unsurpassed people, processes, expertise and retailer and consumer insights that will enable us to effectively and creatively expand the business, said Constellation Brands Chairman and CEO Richard Sands.
The joint venture agreement runs through Dec. 31, 2016. The contract renews in 10-year periods unless Modelo gives notice prior to the end of year seven of any term. Subject to the brand owners' approval, Constellation's national rights to import St. Pauli Girl and Tsingtao into the U.S. will be part of the joint venture.
Grupo Modelo currently brews and distributes 12 brands; Corona Extra, Corona Light, Modelo Especial, Victoria, Pacifico, Negra Modelo among others. The company exports five brands with a presence in more than 150 countries, and it is the exclusive importer of Anheuser-Busch products in Mexico.
Constellation Brands include Almaden, Arbor Mist, Vendange, Woodbridge by Robert Mondavi, Hardys, Nobilo, Kim Crawford, Alice White, Ruffino, Kumala, Robert Mondavi Private Selection, Rex Goliath, Toasted Head, Blackstone, Ravenswood, Estancia, Franciscan Oakville Estate, Inniskillin, Jackson-Triggs, Simi, Robert Mondavi Winery, Stowells, Blackthorn, Black Velvet, Mr. Boston, Fleischmann's, Paul Masson Grande Amber Brandy, Chi-Chi's, 99 Schnapps, Ridgemont Reserve 1792, Effen Vodka, Corona Extra, Corona Light, Pacifico, Modelo Especial, Negra Modelo, St. Pauli Girl and Tsingtao.
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