Press Clips: Global Consolidation; Taxation a Costly Beer Ingredient

Sometimes, all it takes a good pie chart to really understand just how consolidated the beer industry has become.

In a note to clients, Goldman Sachs broke down beer’s merger trends over the last decade. In its analysis, the investment bank found a beer industry that, in 2003, looked very different than today.

Goldman Sachs determined while the beer industry was “highly fragmented” 10 years ago, it has since seen “a steady process of consolidation via [mergers and acquisitions]” as a way to cut costs or acquire “attractive emerging market assets,” according to an article in Business Insider,

In 2003, Anheuser-Busch held an 8.5 percent share of the global market. Ten years later (and six years after A-B merged with InBev), the brewing company now controls 20.6 percent of the world’s beer market.

“Today’s top 5 companies represent more than 50% of the global market (versus 32% for the top 5 players in 2003),” the article notes.

According to the report, SABMiller controls 9.7 percent share of the global beer market, followed by Heineken at 9.2 percent, Carlsberg and China Resources Enterprise, which own 5.7 percent and 5.6 percent, respectively.

On the subject of beer-related graphics, here’s a map from the Tax Foundation, an independent tax policy research organization, which details beer’s excise tax rates, by gallon, in all 50 U.S. states.

The takeaway? Beer drinkers in the Southeast pay the most tax on beer. Tennessee has the highest at $1.17 per gallon and surrounding states Kentucky, North Carolina, South Carolina, Georgia and Alabama are all ranked in the top 10. Other states that rank among the highest in excise taxes include Alaska (2nd at $1.07), Hawaii (5th at $.093) and Minnesota (10th at $0.47).

The Tax Foundation cites a Beer Institute report that claims, “taxes are the single most expensive ingredient in beer, costing more than labor and raw materials combined.”

The report adds, “if all the taxes levied on the production, distribution, and retailing of beer are added up, they amount to more than 40% of the retail price.”

If all those numbers gave you a headache, be sure to ingest this next story slowly to avoid a brain freeze.

After nearly 30 years, Yuengling has brought its eponymously-named ice cream brand back to the market. According to the Associated Press, Yuengling ice cream — which the company began producing during Prohibition — will be available at hundreds of stores in Pennsylvania, Virginia, Maryland, West Virginia, Delaware and New Jersey, and additional markets could be on the way.

“One of the biggest things in putting a new product on the market is getting brand-name recognition, which is a problem we don’t have,” Yuengling’s Ice Cream president, David Yuengling, told the AP. “We are really popular for not having been on the market for 30 years.”

Switching gears to a story more bitter than sweet, two residents of Texas are suing Franconia Brewing Co. of McKinney, Texas for up to $1 million, alleging that they suffered injury when a fermentation tank exploded during a brewery tour.

The explosion happened in February of 2012, notes Chron.

The following video shows the aftermath of the explosion. A word of warning, it features some profane language.

From explosive equipment to explosive growth, new details about Boston Beer Co.’s Cincinnati brewery have come out. According to the Cincinnati Business Courier, Boston Beer is investing nearly $6 million into the facility and has tapped Cincinnati-based Reece Campbell Inc. as the general contractor.

According to Reece-Campbell’s building permits, the article adds, Boston Beer is adding a beer storage building valued at $3.5 million with an additional $2.3 million worth of beer storage tanks.

The new brewery holds 14 large tanks with room for 20 total. Boston Beer is adding nine more tanks at the facility’s bottling and packaging building, the article adds.

While we know our readers understand that drinking and driving is never advisable, the folks over at Dogfish Head felt compelled to remind the general drinking public with their own message. The public service announcement features brewery owner Sam Calagione and actor Ken Marino, who recently starred in HBO’s “Eastbound & Down.”

The video is below. Share it with friends.

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