E-Malt.com News article: 1581

Canada's largest brewery, Molson Inc., said on September 18 it wants to make at least C$1 billion ($730 million) in profit before interest and taxes by fiscal 2009, or twice the amount it made in fiscal 2003, but does not plan any acquisitions in the short term to help it meet that target, under the Reuters report.

In fiscal 2003, which ended on March 31, the company's operating profit reached C$516 million. Molson president and chief executive Daniel O'Neill told a webcast briefing for investors and shareholders that worldwide consolidation in the beer business does not necessarily generate value for shareholders.

Last year Montreal-based Molson acquired Brazilian brewer Kaiser, making it a major force in the industry in the South American country. Kaiser is Brazil's No. 2 brewer and competes against AmBev.

"Participating in consolidation for the sake of participating would not lead to value creation," O'Neill said, adding this was the conclusion of a recent international study done by Molson. "Molson's international strategy will start with strong execution in current markets - Canada, the U.S. and Brazil with future mergers and acquisitions activity not being a requirement in the short term," O'Neill said. "M&A activity could take place in the mid term and would be undertaken if it could incrementally enhance shareholder value," he added.

Molson, which is the world's 15th largest brewer in terms of volume, said the advantages of delaying further international expansion far outweighed the risks of not moving aggressively in its key markets. It said that to meet its C$1 billion profit target by 2009, gains in market share will be its top priority in Canada, where it holds a 45-% market share and competes head to head with Labatt, owned by Belgium's Interbrew.

Molson said Kaiser should deliver strong results thanks to opportunities in the large Brazilian market. "In the U.S., the largest imported beer market in the world, success will mean doubling volume levels and establishing Molson as one of the top three import brands," O'Neill said.

The brewer's portfolio of beers includes Molson Canadian, Molson Export, Molson Dry, Rickard's, Bavaria and Kaiser.


19 September, 2003