ST. LOUIS -- Anheuser-Busch Cos. Inc. has purchased the Rolling Rock brands from InBev USA, the U.S. subsidiary of Belgian-based InBev. The acquisition will expand A-B's portfolio of products and leverage its sales and distribution skills to make the Rolling Rock brands available to more consumers.
A-B paid $82 million for the global brand rights and recipes for the Rolling Rock beers.
Introduced in 1939 by Latrobe Brewing Co. and acquired by InBev's Labatt USA in 1987, Rolling Rock is an iconic American lager known for its green [image-nocss] bottle.
A-B acquires the Rolling Rock brands and recipes with the transaction, and will now start to work with the existing Rolling Rock wholesaler network and A-B wholesalers to define plans. Anheuser-Busch will begin brewing Rolling Rock and Rock Green Light in August using the brands' same recipes and craftsmanship. Internationally, Rolling Rock will continue to be sold in the United Kingdom and Ireland.
We have an ideal opportunity to grow this historic brand, said August A. Busch IV, president of A-B. Acquiring Rolling Rock enables us to reach a new audience and to continue building our broad portfolio of products that meet the wide-ranging needs of consumers.
InBev plans to sell its brewery in Latrobe, Pa., separately to focus its U.S. business on imported beers. It is in discussions with potential buyers to determine the best available options for the brewery and its employees.
The decision to sell the Rolling Rock brands was based on InBev's strategic approach to the U.S. market, which is to focus on the high-growth import brands in our portfolio, said Doug Corbett, president of InBev USA. Our sales and marketing efforts will emphasize our leading imported beers, including Stella Artois, Bass Pale Ale, Beck's, Brahma and Labatt Blue.
We believe A-B could revitalize the brand by increasing marketing
spend and expanding distribution (currently 63%), though there could
be transition issues as current distributors could be reluctant to
sell their rights, Caroline Levy, analyst for UBS Investment Bank, New York, said in a research note.
Also, A-B is reportedly close to buying a significant stake in Chicago's Goose Island Beer Co., according to a report by the Chicago Tribune. If A-B is successful, it will take a 35% ownership in the company and take over distribution of the Chicago beer. Last year, sales of Goose Island grew 24%, led by its signature Honkers Ale. The deal could close within the next 30 days, said the report.
So far in 06, A-B has entered into a flurry of new agreements (e.g.,
import deals with Grolsch and Tiger, distribution agreement with
Hansen), said Levy. While we view A-B's initiatives as a step in the right direction, the near term profit impact will likely be limited given the size of its existing business.
St. Louis-based A-B brews Budweiser and Bud Light, among other brands. It also owns a 50% share in Grupo Modelo in Mexico and a 27% share in Tsingtao in China.
InBev USA offers a diverse portfolio of more than 20 international brands. Headquartered in Norwalk, Conn., it brings beers to the United States including Stella Artois from Belgian; Beck's from Germany; Bass Pale Ale from Britain; Brahma from Brazil; and Labatt Blue and Labatt Blue Light from Canada.
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