What next for Miller Brands?

Claire Dodd

Claire Dodd

23 May 2016

It's been eight months since news first emerged of AB InBev's intent to create a global brewing powerhouse by swallowing up rival SABMiller.

To satisfy competition rules, the deal – costing a staggering £70bn – has since seen the systematic selling off of major brands and business interests across the globe. Or at least binding agreements to, should the deal go through.

It won’t have escaped beer drinkers’ notice that the deal came just months after Miller acquired London brewer Meantime Brewing Co in a strategic move to enter the UK craft beer market.

But in April, AB InBev accepted Japanese brewer Asahi’s binding offer to acquire Peroni, Grolsch and Meantime, pending completion of the SABMiller deal. And with them will go Miller Brands, SABMiller’s UK subsidiary. It’s a complicated business indeed.

Following the announcement of their annual results Imbibe caught up with Gary Haigh (pictured, right), Miller Brands’ managing director to ask, what next for the company that’s helped grow brands including Peroni, Kozel and Pilsner Urquell? And in the age of brewer consolidation, what’s next for ‘craft’ beer?

Q: It is estimated the sale of SABMiller will complete in the second half of this year. Where will that leave Miller Brands?

'Asahi have made a binding offer to AB InBev, conditional upon the bigger deal completing. They have bought the trademarks for Peroni, Grolsch and Meantime, and alongside that they have bought the operating business units in the UK; that’s my team, the Meantime team, the business unit in the Netherlands, and also in Italy.

'If the deal goes ahead with all the binding offers that are currently standing, Miller Brands will continue to operate as a business unit. But it may not be called Miller Brands.'

Q: So how do things continue in the interim?

'Within the business we have a strategic three-year plan, which we wrote in August last year, a few weeks before we heard any rumblings of the AB InBev approach. We will go ahead and do what we have said we would do as nothing has materially changed in the market to make our brand strategies and our marketing any less relevant.'

Q: Do you risk losing the distribution of some of the brands that have been key to your growth? Such as Peroni?

'Any future distribution of specific brands would be a discussion between future owners and ourselves I guess. The one thing I can say is that Miller Brands, in whatever guise we are – and we know that our future shareholders will be Asahi – will own the trademark of Peroni. So Peroni is part of Miller Brands, and it’s great to know that.'

Q: What are your thoughts on big brewers stepping into the ‘craft’ scene, by purchasing smaller brewers? There’s a lot of debate about whether it changes the brands fundamentally when they have multinational owners.

'I can’t speak on behalf of Meantime, but my personal perspective is that it’s an important consideration in terms of the authenticity and identity of the organisation. I think there was a very deliberate move when SABMiller purchased Meantime, to keep it separate from Miller Brands UK. Meantime operates as a standalone business within the UK. But equally I would say Meantime [has] benefited from the financial backing of a much larger organisation.

'I think sometimes, that behind-the-scenes funding and expertise can be useful for a craft brewer, without actually changing anything around the quality of the brew or the DNA of the organisation.'

Q: So there’s a distinction for you between craft breweries that retain their own decision making to those that become absorbed by their larger brand owners?

'I think if you have the decision-making power, and you decide what beers you are going to brew etc, but you have financial backing and access to, I don’t know, expertise, then you have probably achieved what you set out to when you agreed to tie-up with some of the big companies.

'Meantime organises all its own logistics, has its own sales force, obviously brews its own stuff. They are completely stand-alone at the moment. I think if you spoke to the guys in Greenwich, they’d say on a day-to-day basis, nothing has changed, which I would say is a great outcome.'

Q: Can a big brewer ever legitimately produce 'craft beer'? And should they even try?

'Perhaps "craft" is now a slightly abused phrase, that we all kind of understand. There are beers out there that I think you would consider craft beers, that larger brewers have owned for many years. I guess the example I would use from Miller Brands is something like Pilsner Urquell, which you know is authentically brewed in Czech Republic, using ingredients that craft brewers would absolutely kill for – but it's considered a big brand.'

Q: So what’s next for you at the moment?

'For Peroni, it’s all about innovation, and continuing to enrol consumers in experiencing the brand. The House of Peroni is a digital platform 365 days of the year, and it’s a physical residency once or twice during the year. We have just opened a site in Haggerston at Proud East. We consistently try to work with new talent to tell the brand story. Margherita Maccapani Missoni has worked on the interiors, world renowned chef Francesco Mazzei has worked on the food, and Simone Caporale is our master of mixology.

'With Pilsner Urquell, so far we have done 10 [fresh, unpasteurised] tank beer installations across two years. For us, it’s critically important to get the quality right, so any outlet we work with has to be able to sell a tank in five days. So we have to be really selective. So around five tanks a year sounds about right.'

A decision on the AB InBev deal is expected from the European Commission tomorrow 24 May.

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