Good and bad of takeovers

BY GEOFF GRIGGS

Call me a cynic if you will, but having grown up in England during the 1970s and 80s, and witnessed the closure of many great breweries and the demise of some great beers, experience has taught me to view the takeover of any brewery with a dose of scepticism.

Too often, brewery acquisitions have little to do with maintaining and promoting the beers, but are more about increasing market share and profitability. The result is often that the original brewery is closed, its site sold off, and production of the beers transferred elsewhere.

The quality and character of the beers changes, usually for the worse, eventually to a point where all that remains is the brand name.

Sometimes, the beers linger on as an emasculated reminder of a once-great brewery, but in many cases, they lose popularity and fade away. From a beer lover's perspective, it's a tragedy.

However, brewery acquisitions aren't always a bad thing. Sometimes great breweries and beers have been saved as a result of a takeover. In such cases, the brewery doing the taking over is committed to developing and promoting its acquisitions, and its own beers are something to write home about.

Take Belgium's Duvel Moortgat. Dating back to 1871, Duvel Moortgat has grown from a small regional producer in the Flemish north to one of Belgium's largest brewing groups.

Apart from its status as brewer of Belgium's most admired and copied strong golden ale (Duvel), in recent years, the Mechelen-based, family-owned company has enhanced its reputation further as a result of its purchase of two of Belgium's most admired specialist breweries.

Its first acquisition was in September 2006, when it bought Brasserie d'Achouffe, the Ardennes-based brewer of the coriander-spiced speciality beers La Chouffe and McChouffe.

In June 2008, it came to the rescue of Liefmans, the producer of East Flanders' renowned sour brown ales. Then, last week, it announced the purchase of its latest acquisition, Antwerp's De Koninck brewery.

Announcing the acquisition and its intention "to reinvigorate the De Koninck beer brand", Duvel Moortgat suggested negotiations between the two breweries were quick and cordial.

"It did not take us long to reach agreement: family values and traditions are concepts that both breweries feel strongly about."

If you're dubious that such traditional concepts are relevant in a modern business environment, you may want to think again. Duvel Moortgat says it "has grown to become not only the fourth-largest brewery in Belgium, but also the market leader in terms of operational profitability".

Founded in 1827 and located in the heart of Antwerp, the family-owned De Koninck brewery has a unique bond with the city. However, although De Koninck's spicy, yeasty pale ales are very popular in Antwerp and well respected in Belgium and the Netherlands, its greatest success was during the 90s. Since then, demand for its fine ales has halved.

Nevertheless, Duvel Moortgat recognises the quality and potential of the Antwerp brewer. Announcing the takeover, chief executive Michel Moortgat said: "De Koninck is not only a strong brand, but also a quality specialty beer that fits perfectly into Duvel Moortgat's range."

And what a range it is. Apart from Achouffe and Liefmans, the company brews the legendary Duvel, the tasty Maredsous range of abbey-style beers and Bel-Pils – for my money, Belgium's finest pilsener-style lager.

The takeover of De Koninck could be good news for Kiwis. With most of Duvel Moortgat's beers already being imported into New Zealand, we may soon have access to a regular supply of Antwerp's finest. I'll drink to that!

Cheers!

- The Marlborough Express