E-Malt.com News article: 1425

The Belgian brewing conglomerate, Interbrew, noted on August 8, “the decision of the US Court of Appeals for the Second Circuit, which acknowledges that FEMSA Cerveza, the minority shareholder in Labatt USA, has a veto right over certain significant related-party agreements between Labatt USA and the Interbrew Group.” Interbrew owns 70% in Labatt USA, while the Mexican company Femsa owns the rest 30%.

Last year Femsa won an order from the US District Court in New York blocking Interbrew's distribution plans to put Beck's into its Labatt USA portfolio. Femsa contended that the arrival of Beck's would reduce the attention paid to its own brands in the portfolio. Femsa said after the ruling that its priority now was "to continue with the constructive dialogue currently in process between Femsa Cerveza and Interbrew regarding Labatt USA and the strategy going forward."

Meanwhile Interbrew said: “It will not pursue any further appeal of the decision. Importantly, this decision will not affect the day-to-day management of Interbrew's American operations. The company, anticipating this possible outcome, has already restructured the channels of distribution in the USA, including those for Bass® Ale, in agreement with FEMSA Cerveza.”

As announced one month ago, Stefan Descheemaeker has been appointed Zone President for USA and Latin America, and he will continue to have three direct reporting lines: the CEO of Labatt USA, the CEO of Beck's North America and the Executive in Residence within FEMSA Cerveza. Interbrew said the decision would have no financial impact for the company.

Interbrew had hoped to make annual savings of €10m by distributing Beck's through Labatt USA rather than the existing Beck's structure.


13 August, 2003