Oct 9, 2007 11:24 pm US/Mountain
Craft Breweries Weigh In On MillerCoors Venture
by Mike Hooker
FORT COLLINS, Colo. (CBS4) ―
Two of the biggest names in the beer industry, MolsonCoors Brewing Company and SABMiller PLC, are joining forces and smaller, craft breweries weighed in on what it means for the beer business.
Craft beer makers like New Belgium Brewing Company in Fort Collins and Left Hand Brewing Company in Longmont are now serious competitors in the beer industry.
If a dollar was all the money made in the U.S. beer industry, about one nickel is the market share of the craft breweries, but it's growing much faster than the rest of the dollar. That's partly why the big brewers are teaming up as they vie for customers who have changing tastes.
"They spend millions and millions of dollars to gain one point of market share, so for us to go from four to five percent was absolutely huge," Chris Lennert with Left Hand said.
MolsonCoors and Miller announced the joint venture to help both companies compete against Anheuser-Bush, which has half the U.S. market.
"Craft beers are taking a larger share of the volume and profit pool within the beer business," MolsonCoors Chief Executive Officer Leo Kiley said. "Were seeing declining beer consumption, increasing cost pressures, consolidation of distributors and retailers, continued growth in the wine and spirits business, and in the craft and import brands."
Several craft brewers in Colorado say as the big brewers get bigger; it just helps the small ones stand out as something special.
"I think were the ones that are out there doing innovation with new beer styles, trying new things and taking chances," Doug Odell with Odell Brewing Company said.
At Left Hand, they say it's unclear how and if the new MillerCoors will affect the craft brewers who helped spark the joint venture of giants in the first place.
"I don't see any negative right now at all," Lennert said.
All the craft brewers CBS4 spoke with point out that the big beer companies are trying to get further into the craft brew market. A good example is the very popular Blue Moon beer which is made by Coors.
Coors called the deal a partnership and not a merger.
Either side can walk away after five years.
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