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Thursday 2 October 2014

Craft breweries ‘overvalued’ says Molson CEO

27th June, 2014 by Rupert Millar

The CEO of Molson Coors, Peter Swinburn, has said that craft breweries are “massively overvalued” which prevents their acquisition by larger breweries.

Top 10 craft beers in the USIn an interview with Bloomberg, Swinburn said: “I’m just saying we have to generate value from any purchase we make, and we find it difficult to get the returns we want.”

The continuing boom in craft beer across North America has yet to make serious inroads into the market which is dominated by the big brands of Molson Coors, AB-InBev and SABMiller.

Nonetheless, its popularity has forced the likes of Molson Coors to create craft-style beers such as Blue Moon.

Craft breweries make attractive propositions but tax breaks in Canada preclude much buying opportunities there and the market is so “hot” for craft beer in the US that it makes even very small brewers far more expensive concerns than they would otherwise be.

Swinburn told Bloomerg that he expects to see more consolidation across the beer industry in the near future – though perhaps not on the scale of the AB-InBev or SABMiller mergers – and a cooling off in the craft market could open doors.

“But we’re not running around Canada or the U.S. or Europe trying to get people to sell their business to us,” he said.

The Brewers’ Association recently changed the definitions of craft beer, saying that any brewery producing up to six million barrels a year can call itself “craft” as of 2015.

2 Responses to “Craft breweries ‘overvalued’ says Molson CEO”

  1. Liam Young says:

    Awesome. What’s the beer equivalent of ‘sour grapes’? ‘Hopping mad’?
    I’m glad to see that the big beer conglomerates will stay away from Canadian craft brewers. This means decent beer will remain out of the hands of big companies. That’s the whole point of ‘craft’, correct?

  2. Let’s hope that they will stay away from gobbling up the Craft Brewers, but they have already made inroads with buying Creemore, Granville Island and Sapporo’s take over of Unibroue and Upper Canada to name just a few.

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