United Kingdom: S&N and SABMiller sign new beer agreement
Scottish & Newcastle and its rival SABMiller announced on July 21 a new agreement on the brewing, sales and distribution of two of SAB's key brands
, Miller Genuine Draft and Peroni Nastro Azzurro.
SABMiller plc announced on the same day the launch of MILLER BRANDS (UK) Limited, a new operating company which will manage the sales, marketing and distribution of Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Castle Lager in the UK. For the first time, MILLER BRANDS will drive the strategic direction and investment for all four of SABMiller’s premium brands in the UK. An initial investment of £30 million (US$52 million) over the next two years signals the company’s determination to increase its share of the premium beer market.
As part of this move, SABMiller has reached a new agreement with Scottish & Newcastle plc to transfer the marketing and distribution rights for Miller Genuine Draft to MILLER BRANDS from January 2006. At the same time Scottish & Newcastle will transfer back the distribution rights for Peroni Nastro Azzurro in the off-trade. Scottish & Newcastle will continue to contract brew Miller Genuine Draft and manage the ‘Miller Beer’ brand under licence in the UK.
Gary Whitlie, Managing Director of MILLER BRANDS, commented: “We have an exciting portfolio of well known international brands that we believe has strong growth potential in the UK.
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USA: Miller Brewing maintains USA market share
SABMiller Plc's subsidiary, Miller Brewing, announced on July 20 it was able to maintain its share of the United States beer market
over the American beer industry’s important 4th of July sales period despite raising prices by 1.2 % compared to last year, according to Reuters.
Miller's performance over the 4th of July, traditionally the busiest selling period for beer in the United States, stands in contrast to Memorial Day, when brewers kicked off the summer with sharp discounts to spur beer sales. Rival Anheuser-Busch Cos. Inc. continued this discounting during the most recent holiday.
"Price discounting is not an effective growth lever for the industry, unless you want to rent volume in the economy segment," Miller Brewing Chief Marketing Officer Tom Long said in a statement. Volume and share movement did not correlate with discounting. Miller Brewing Co.’s share of total beer sales remained flat versus the prior year, while increasing prices by 1.2%1.
In contrast, Anheuser-Busch lost 0.5 share points despite lowering prices versus the prior year by 0.5%1. An Anheuser spokesman declined to comment on its growth over the key holiday.Brands with established momentum continued to show strength. Miller Lite’s share grew 0.6 share points, while the import category grew by 0.9 share points1.
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