The St. Louis Business Journal is reporting that Anheuser-Busch InBev is negotiating with Heineken to sell its Czech brands to the Dutch brewer. The paper places Staropramen’s valuation between $255 million and $306 million.
We’ve seen this before. Almost exactly a year ago, Heineken’s takeover of the Czech Drinks Union brands was given the green light. That move pushed Heineken into third place on the Czech market, just ahead of the legendary Budweiser Budvar, but still lower than Heineken’s traditional market share. At the time, Ron Pattinson sagely noted that Heineken doesn’t enter a market to take third place.
By purchasing Staropramen — and thus the group’s other brands Braník, Měšťan, Ostravar, Kelt, Velvet and Vratislav — Heineken would move to a very solid second place behind SAB Miller’s Pilsner Urquell group, standing roughly three times larger than still-state-owned Budweiser Budvar in third place (with around 30% of the Czech market vs. about 10%). It would combine the above-mentioned Staropramen brands with its current Czech portfolio of Krušovice, Hostan, Starobrno, Zlatopramen, Velké Březno, Louny and Kutná Hora.
Interestingly, the exit of Anheuser-Busch InBev from the Czech market might finally put an end to the idea of American Budweiser ever buying Czech Budweiser. However, Budweiser Budvar is still on schedule to be privatized in the next year or two. With its expanding presence here, Heineken would be a natural suitor. That would move it to around 40% market share, right behind SAB Miller’s approximate 49%.
What remains to be seen with the current takeover is if the Czech anti-monopoly office will rise from its slumber (prediction: not freakin’ likely). So assuming the takeover of Staropramen by Heineken goes forward, it might be time to name your Czech Beer Brand Dead Pool.
In Slovakia, for example, Heineken has shuttered many of the breweries they’ve purchased (such as Martiner and Corgoň), keeping the brands alive but moving production to the massive Hurbanovo brewery. And many of Staropramen’s brands here are similar zombies: Braník is no longer brewed at Braník; Měšťan is no longer brewed in Holešovice.
So make your predictions now. What Staropramen or Heineken breweries will be closed? How many more zombie beers will we see here? And will Heineken really end up buying Budvar Budvar?
NB: of the Czech brands that Heineken already owns, Hostan is pretty much over: it’s been partly brewed at Starobrno for ages. And over at Pivní deník, Honza Kočka jokingly predicts that it is the Staropramen brewery — located in prime real estate overlooking the Vltava river — that will end up being sold and turned into upscale loft apartments, just like what happened to the Holešovice brewery after Staropramen sold it. As always, “irony follows hubris” seems like a fairly safe bet.