Last Call: President Trump Imposes Tariffs; Heineken Attempts to Acquire Majority Stake in United Breweries

Trump Imposes Tariffs on Imported Aluminum, Steel

On Thursday, President Donald Trump signed an executive order imposing tariffs of 10 percent on imported aluminum and 25 percent on foreign steel — with exemptions for Canada and Mexico, for the foreseeable future.

Jim McGreevy, CEO and president of the Beer Institute (BI), issued a statement saying the aluminum tariff would serve as a $347 million tax on American brewers and could lead to the loss of more than 20,000 jobs.

“This tariff on aluminum will hurt American breweries and beer importers that are employing Americans and producing beer, America’s most popular alcohol beverage,” McGreevy said in a press release. “This tariff will raise costs and slow the innovation that has made our nation’s beer industry more vibrant than at any point in history.”

National Beer Wholesalers Association CEO Craig Purser issued a separate statement calling the tariffs “a hidden taxes that will wind up being paid by American consumers.”

“An increase in cost of goods sold is bad news for all tiers of the beer industry in the U.S. – including brewers, distributors and retailers – and bad news for the hardworking men and women across the country whose jobs depend on a vibrant and competitive industry,” he said.

The BI said it would work with beer companies to file an exemption with the Department of Commerce for aluminum cansheet used to make beer cans.

The tariffs will go into effect in two weeks.

Heineken Seeks to Buy Seized United Breweries Shares

Heineken is attempting to purchase shares of India’s United Breweries that were seized from Vijay Mallya by the Enforcement Directorate (ED), an agency in charge of enforcing economic laws and fighting economic crime, the Economic Times reported.

Heineken, via investment bank JM Financial, submitted a share purchase proposal to the ED, which had seized Mallya’s share in connection with alleged loan diversion and default on payments to banks, the outlet reported.

If successful, the world’s second largest beer manufacturer would gain a more than 58 percent stake in the company, which makes the Kingfisher brand. Currently, Heineken owns a 44 percent stake.

Mallya is still fighting extradition from the United Kingdom to India, where he is facing charges of fraud and money laundering in excess of $1 billion.

The Economic Times reported that the articles of association between Heineken and Mallya stipulate that the billionaire mogul can remain chairman for life and a non-retiring director.

In other Heineken news, Reuters is reporting that the Dutch brewer is in talks to sell its business in China to the makers of the Snow brand, China Resources Beer, in a deal that could be worth in excess of $1 billion.

Three breweries — in the provinces of Guangdong, Hainan and Zhejiang — as well as the Heineken’s distribution business and brands in the country could be included in the deal, the outlet reported.

“CR Beer doesn’t have super-premium lagers, while Heineken has high-end brands but lacks scale in China,” a source told Reuters. “Heineken is a natural target for CR Beer.”

Beer Institute Releases January Domestic Tax Paid Estimates

U.S. brewers shipped a more than 12.1 million barrels of beer in January, down 5.6 percent from 2017 levels, according to the Beer Institute (BI), citing unofficial estimates of domestic tax paid shipments from the Alcohol and Tobacco Tax and Trade Bureau (TTB).

BI chief economist Michael Uhrich said via a press release that U.S. beer distributors reduced their inventories by 10 to 12 percent in December, which is normal. However, wholesalers didn’t restock at the levels of previous January periods, he added.

“Historically, this is normally followed by fairly dramatic restocking in January, leading to growth in distributors’ net inventories of 15 to 20 percent,” Uhrich said. “However, this January distributors increased their net inventories by only 7 to 10 percent, resulting in beer shipment softness.”

Three Floyds Receives Approval for Brewery Expansion

The city of Munster has signed off on a brewery expansion that will triple the size of Three Floyds’ existing 57,000 sq. ft. Indiana production facility, according to the Times of Northwest Indiana.

The Indiana brewery has hired Dallas-based HKS Architects, the firm responsible for the Dallas Cowboys’ AT&T Stadium and Minnesota Vikings’ U.S.Bank Stadium, for the project.

Three Floyds plans to begin construction following the annual Dark Lord Day on May 19 with construction expected to last more than a year.

Duvel Moortgat Increases Stake in Italian Brewery

After acquiring a minority stake in December 2016, Duvel Moortgat has increased its stake Italian brewery Birrificio del Ducato to 70 percent, the company announced in a press release.

“We will bring our experience built up over multiple generations to supporting Birrificio del Ducato and together we aim to ensure that these specialty beers can be enjoyed in the rest of the world as well,” CEO Michel Moortgat said via a press release. “Italy is renowned for their delicacies and we want to make our own contribution to allowing the rest of the world to discover the exceptional beers of Birrificio del Ducato.”

Duvel Moortgat also owns U.S. craft brewers Boulevard, Firestone Walker and Ommegang.

New Bud Light Commercial

Anheuser-Busch has released the latest ad in its Dilly Dilly campaign. The spot dubbed, “Tapping Ceremony,” highlights that Bud Light kegs are changed every six seconds.

Melvin Brewing Releases Trailer for 2×4 Day Film

Melvin Brewing is hyping its International 2×4 Day, which honors the Wyoming brewery’s 2×4 Double IPA on April 2, with the release of a trailer for its “full feature film” featuring WWE Hall of Famer “Hacksaw” Jim Duggan in a battle with “World Bev.” Watch the trailer above.

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