Grolsch: Growing Globally - Pankaj Ghemawat · Grolsch higher than larger brands, including Heineken, the top global brand as well as the leader in Grolsch’s home market (see Exhibit

P A N K A J G H E M A W A T

J O R D A N M I T C H E L L

SM – 1529 – E O – 308 - 029

________________________________________________________________________________________________________________

This case was prepared by Professor Pankaj Ghemawat and Jordan Mitchell, Research Assistant, as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. August 2008.

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Last edited: 10/10/08 1

Grolsch: Growing Globally

In November 2007, SAB Miller, the world´s second largest brewer,1 announced the friendly takeover of the world’s 51st largest, Royal Grolsch N.V. of the Netherlands, for €816m in cash - 84% more than Grolsch’s value over the previous month. Nick Fell, SABMiller’s Marketing Director, explained the logic of the deal:

“[Grolsch is] a fantastic brand. It’s North European, it’s a fantastic product, it’s got unimpeachable brewing credentials and authenticity and credibility. And it’s a damn good product. So for anybody interested in developing their premium beer business, this is an absolute peach of a brand to get hold of… we see huge potential for it in our global footprint, particularly in markets like Latin America and Africa where we’ve got a strong route to market but where the premium beer business is still in its infancy.”2

Grolsch had hitherto focused on developed markets, particularly the UK, US, Canada, Australia, New Zealand and France, in pursuit of its goal of becoming one of the world’s top 10 global beer brands. Groslch was already the world’s 21st largest global brand, measured by international (non-domestic) volume (see Exhibit 1). International volume had grown to account for slightly over one-half of total volume and, going forward, seemed to offer much more potential. Drinkers often rated Grolsch higher than larger brands, including Heineken, the top global brand as well as the leader in Grolsch’s home market (see Exhibit 2). And Grolsch had started up a state-of-the art brewery in 2004 that could be expanded at little incremental cost.

The acquisition closed and in February 2008, Grolsch became an independent subsidiary of SABMiller. Rob Snel, head of Grolsch International since 1999 and an employee since 1984, was named Grolsch’s new CEO shortly thereafter. He had to decide what changes, if any, to recommend to its global strategy.

1 This compares the relative positions of SABMiller with the two other major breweries, InBev and Anheuser-Busch as of the end of 2006. SABMiller’s fiscal year ends in March.

2 “Q&A with Nick Fell, Marketing Director, SABMiller,” SABMiller, www.sabmiller.com. Accessed Nov. 30, 2007.

http://www.sabmiller.com

SM-1529-E Grolsch: Growing Globally

Company Evolution Grolsch traced its history back to a brewery, in the Dutch town of Groenlo near the German

border3 that was purchased by Willem Neerfeldt in 1615. By the late 1800s, the brewery had come under the control of Theo J. De Groen. In 1897, he introduced Grolsch’s iconic - and trademarked - ceramic swingtop bottle, which was advertised as easy to open and allowing storage of beer for later consumption. Marketing of the Grolsch brand began in 1918. In 1922, this operation merged with a brewery in nearby Enschede (see Exhibit 3 for a map of the Netherlands), but Grolsch was retained as the principal brand. By the 1960s, Grolsch had grown from a “regional” brand to become the country’s second most popular, behind Heineken.

After the death of the head of the De Groen family in 1982, the next generation of family members agreed to an initial public offering (IPO) on the Amsterdam Stock Exchange in 1984.4 Subsequently, a non-family member was brought in to manage the company for the first time since the De Groens had assumed ownership. By the end of the 1980s, there were no De Groens on the company’s executive committee, but the family continued to own one-third of Grolsch’s shares and was represented on its supervisory committee.

Due to its stature in the Netherlands, the Dutch government honored the company with the coveted “Royal” title in 1995, and the company was renamed Royal Grolsch N.V. In 1997, Grolsch celebrated the 100th anniversary of its swingtop bottle; a company representative said, “After 100 years, the swingtop is a great differentiator and still makes the Grolsch brand famous today.” In 1998, the company decided to build a modern brewery which, after disruptions and delays (see below under “Operations”), started up in 2004.

Grolsch had been incorporated as a two-tier company under Dutch law and had two major, fully-owned subsidiaries: Grolsche Bierbrouwerij Nederland, which handled sales and marketing of Grolsch in the Netherlands and also housed most production, logistics and facilities support except operations with foreign partners; and, Grolsch International, which was responsible for the worldwide sales and marketing of Grolsch (and other brands) outside the Netherlands and the UK and Ireland. The UK and Ireland were handled by a 51:49 sales and marketing joint venture with Coors called Grolsch (UK) Ltd., which brewed Grolsch under license locally.

Exhibit 4 summarizes Grolsch’s recent financial and operating history. In 2007, Grolsch’s total volumes (including beers sold under exclusive distribution rights) increased by 3.1% to 3.3 million hectolitres (hl),5 with volumes derived specifically from Grolsch brands decreasing by 3.4% to 2.8 million hl. Revenues grew by 4.8% from €317.6m to €332.9m and net profits edged forward from €19.2m to €20m during the same period.

Prior to the takeover by SABMiller, Grolsch had emphasized growing faster than its key markets while achieving a return on investment that exceeded its average cost of capital (estimated to be 7.5% by one investment bank6), steadily increasing earnings and dividends per share, and maintaining a healthy balance sheet. It paid attention to non-financial stakeholders as well, especially employees

3 Groenlo means Green Forest in Dutch. The town was also known as Grol and Grolle.

4 Dominic Walsh, “Swing was the thing when popped tops reached Top of The Pops,” Times Online, Nov. 20, 2007, http://business.timesonline.co.uk/tol/business/industry_sectors/consumer_goods/article2903549.ece

5 1 hl = 100 litres. An average bottle holds 333 millilitres (0.333 litres). Cases vary from 8 to 12 litres by volume.

6 “Grolsch: How much to pay for U.S. fantasy?” Fortis Investment Bank, Feb. 23, 2007, p. 4.

2

http://business.timesonline.co.uk/tol/business/industry_sectors/consumer_goods/article2903549.ece


and its local community. Indicators of employee welfare ranged from an average payroll cost of €60,000 per employee (payroll accounted for 15% of revenues) to the complimentary case of Grolsch beer traditionally delivered every week to employees’ homes. About 850 of the 875 employees were based in the Netherlands, as were all members of the executive and supervisory committees. The company had particularly strong ties to the eastern part of the Netherlands, especially Enschede (population 155,000), home to its headquarters and the new brewery. It did, however, seek managers and sales people with multiple language skills and international experience and education.

To achieve its objectives, Grolsch had articulated the following vision and mission:

Vision: The brewing industry has failed to keep pace with the changes in consumers’ preferences for drinks. This has created a mainstream category that is under pressure from other drinks. Grolsch believes in the strength of beer in the drinks market.

Mission: Grolsch is going to break through the mainstream and restore beer’s premium status.

In its presentations to investors, Grolsch emphasized that it targeted a premium, differentiated position in the markets in which it competed. It also highlighted adaptation around its core products as its key strategy for achieving international growth (see Exhibit 5).

Products Exhibit 6 shows the company’s product range, which was organized into two main brand

families: Grolsch and Amsterdam (the company also distributed small amounts of imported Belgian beer such as Grimbergen). The Grolsch brand was the centerpiece of the company’s strategy. Its flagship product, Grolsch Premium Lager, represented 90% of the company’s domestic volume, although nine variations were also marketed in the Netherlands. The Grolsch brand was the focus, as well, of the company’s UK joint venture and the brand accounted for two-thirds of all exports, with Grolsch Premium Lager being the only product sold in many markets.

Grolsch Premium Lager was classed as a pale lager7 and the company emphasized that its malty, relatively bitter taste made it distinctively refreshing. Groslch was brewed to one recipe, which was in strict conformance with German purity laws, and was aged for a minimum of six weeks, compared to two to four weeks for many of its competitors. One beer enthusiast described the aroma as a “peppery hop with a spritzy citric edge to it,” and its taste as “an obviously well-attenuated beer whose balance is toward the dry and bitter [that is] quite refreshing.”8 Beer guru, Michael Jackson agreed: “it has a fresher, more herbal, hop character than most international lagers, and a cleaner malt background,” but provocatively asked, “is that enough?” His conclusion? “Not today. The differences between popular lagers are refinements.”9 Grolsch management strongly disagreed.

7 A lager is a type of beer that is brewed by using a bottom-fermenting yeast in comparison to ales, which are brewed with a top-fermenting yeast. While the tastes of both lagers and ales vary greatly depending on the ingredients and process, lagers are generally lighter and crisper whereas ales tend to be darker and stronger. Lagers dominate the overall market for beer.

8 Blog, http://www.epinions.com/content_129738444420. Accessed April 2, 2008.

9 M. Jackson, “Behind the mystery of Grolsch,” originally published in The Observer, July 1, 2001, http://www.beerhunter.com/documents/19133-001561.html, July 9, 2001. Accessed April 1, 2008.

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http://www.epinions.com/content_129738444420

http://www.beerhunter.com/documents/19133-001561.html


In addition to its core Grolsch products, the company devoted considerable attention to packaging. The green swingtop bottle played a particularly key role in entering foreign markets. As Tom Wilms, Consumer and Market Insight Manager, put it:

“We use the swingtop as a door opener especially in a market that is very crowded in the premium segment…Once the volume starts picking up, we introduce the crown cork (i.e., regular bottle cap). In nearly all of our key markets, most of the volume is in crown cork bottles.”

In 2007, a new, standardized green crown cork bottle, with a stylish look, an embossed Grolsch logo on flattened sides and an accompanying crate, was introduced with much fanfare worldwide, after a two-year development process. In early 2008, the company was also in the process of introducing a new green swingtop bottle globally. This marked a particularly significant change in the Netherlands, where the swingtop bottle had been brown for 111 years. Bottles for the Dutch market were mostly returnable whereas bottles sold elsewhere were non-returnable. Bottles shipped out of the country were offered in more varied sizes and had country-specific labels. Aside from bottles, cans accounted for 30% of total volume and were more standardized, although there were two different designs (one for the domestic market and another for international markets). Kegs were significant as well, particularly at home in the Netherlands.

Grolsch’s other product range centered on Amsterdam, positioned as a non-premium brand and sold mostly in tall 500-millilitre cans at supermarkets and smaller independent shops. Amsterdam beers were available in five varieties and were considered to have a smooth but strong taste: the strongest, the Maximator, had 11.9% alcohol content by volume (compared to 5% for Grolsch Premium Lager). Four markets – France, Russia, Australia and Africa – accounted for 95% of Amsterdam’s volume.

Despite the company’s clear focus on the premium Grolsch brand, the brand’s total volume had actually declined from 3.2 million hl in 2003 to 2.8 million hl in 2007, as exports more or less stagnated while the Dutch and UK markets shrank. Total volume (including Amsterdam and other smaller local brands under license) changed from 3.4 million hl to 3.3 million hl over the same period, with the growth of the Amsterdam brand making up for some of the decline in the Grolsch brand.

Markets

Although Grolsch dated back to the beginning of the 17th century, it began to look beyond the Dutch market only in the middle of the 20th century. Exports commenced after World War II and in 1946, amounted to 3,000hl or 10% of total production. (Indonesia, the largest foreign market, absorbed 1,000hl.) However, exports were curtailed in the 1950s by buoyant domestic demand. Interest in internationalization revived in the 1970s with domestic stagnation and shrinkage, and the example of Heineken, Grolsch’s larger Dutch rival, making impressive headway (see Exhibit 7 for comparative timelines). In the second half of the 1970s, Grolsch set up its own import organizations in the United States and the United Kingdom. Distribution deals in Canada, Australia and New Zealand followed in the mid-1980s.

The 1990s saw investments, for the first time, in foreign production, starting in developed markets. In 1990, Grolsch acquired Wickuler, a regional German brewer, in a move that doubled its capacity. And in 1992, after having grown Grolsch into the UK’s third largest premium lager brand, it bought Ruddles, a small UK brewer, as much for its distribution network as for its ale brands. But

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both moves were quickly unwound. It sold Wickuler in 1994 to one of Germany’s largest brewers, Brau and Brunnen, and signed an agreement to distribute Grolsch in Germany with the latter. That same year, it formed a joint venture partnership with Bass, under which the latter took over production and distribution for the UK. Ruddles was divested in 1997.

The opening up of Eastern Europe in particular prompted a shift in focus in the second half of the 1990s, towards emerging markets: Grolsch invested in Poland and Russia and set up representative offices in Brazil and China. In Poland, Grolsch acquired an indirect stake in a brewery in 1995 but sold it in 1998 because of poor profitability and an inability to build up its stake to a majority level. One Grolsch executive added, “The Polish brand Zywiec was bought by Heineken and there was no need for two Dutch players in the Polish market.” A distribution agreement with the purchaser was later annulled. In Russia, Grolsch paid in 10% of the capital for a small new brewery in 1999, but sold its stake to the majority owners in 2000. They, in turn, sold it to Turkish brewer Efes in 2004, whom Grolsch still licensed to brew and distribute the Amsterdam brand in Russia.

The Asian financial crisis, had significant ripple effects in Eastern Europe, including a massive devaluation of the ruble in Russia, and pushed Grolsch back to focusing on developed markets. It entered France in 1999 by setting up its own distributorship - the only country with such an arrangement - which focused on selling the Amsterdam brand. Grolsch stepped up efforts on the Iberian Peninsula with an investment in Portuguese distributor Cereuro and a distribution agreement with Spain’s La Cruz del Campo. The Cereuro investment was halved in 200510 and in Spain, Heineken bought out La Cruz del Campo.

In addition to the markets mentioned above, Grolsch sold beer in many other countries, making a total of about 70 export markets. As of 2007, international volume accounted for 51.5% of the company total. Grolsch did not systematically disaggregate sales or profits by market, but it did supply partial information that could be supplemented with analysts’ inferences.

Key Markets

According to Grolsch, Western Europe accounted for 88% of its revenues and 94% of its contribution margins, i.e., Western European markets’ average contribution margin was twice as high as others’ (23% vs. 11%).11 If fixed production costs (13% of revenues) were allocated in proportion to revenues, Western Europe accounted for 103% of operating profit (EBIT). But in order to build international volume, beer exports from the Netherlands were actually transferred to Grolsch International at variable production cost.

Grolsch’s home market of the Netherlands accounted for close to one-half its total volume, an estimated 65% of revenues, and a much greater share of EBIT. That said, market shrinkage and discounting had put Dutch brewers under significant long-term profit pressure. Grolsch, with 13% of volume, was part of a second tier of competitors that included Bavaria (17%) and Interbrew (14%), behind market leader Heineken (46%), which controlled the country’s two largest brands, Heineken and Amstel. Grolsch was the third largest brand, and was particularly strong in the eastern Netherlands.

10 “Portugal Sumolis Boosts Stake in Cereuro to 90.05 Pct,” Portuguese News Digest, April 15, 2005.

11 Grolsch Annual Report 2007, Dec. 31, 2007, p. 52.

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Grolsch’s second largest market was the United Kingdom, where it owned 51% of Grolsch (UK) Ltd., a joint venture that brewed Grolsch under license, in partnership with MolsonCoors (which came in after Bass was taken over and broken up). The UK accounted for 25% of Grolsch’s total volume and 1.5% of the UK market. Grolsch was ranked fifth in the premium lager market behind the top three brands: Stella Artois, Kronenbourg and Budweiser.12 In 2007, Grolsch’s 51% stake in it generated about 12% of its operating profit, down from 18% the previous year because of market shrinkage and supermarket pricing pressures.

Grolsch’s third largest market was the United States, to which - like virtually all other markets - it exported beer from the Netherlands. Analysts estimated that Grolsch’s US volume had stagnated at about 140,000hl - 4% of the company’s total and 0.5% of US import volume (overall, imported beer represented close to 15% of total US consumption). Grolsch was ranked 11th in the imported premium beer market (the top three brands were Corona, Heineken and Beck’s).13 An agreement in 2006 with market leader Anheuser-Busch to distribute Grolsch in the US had been hailed as key to become a top 10 imported brand by quadrupling volume. But the acquisition by SABMiller, which owned Anheuser-Busch’s biggest US competitor, Miller, ended that arrangement.

France was Grolsch’s fourth-largest market with volumes estimated to be around 100,000hl, almost all of which was made up by the Amsterdam brand. The Amsterdam brand was ranked second in strong beers behind Bavaria.14 Canada was the next in line (and the fourth-largest for the Grolsch brand), with volumes estimated to be about one-half those in the US. Grolsch had given its Canadian distributor, Sleeman, a license to brew Grolsch Premium Lager nationally. Grolsch was ranked fifth in imported premium beers (the top three were Heineken, Corona and Miller Genuine Draft).15 The remaining markets - including the two other markets classified as “key,” Australia and New Zealand - individually represented less than 1% of Grolsch’s total volume. In Australia, Grolsch occupied fifth place in the international premium segment behind the top three: Corona, Heineken and Stella Artois.16

The MABA Framework

Over time, Grolsch had developed a MABA (Market Attractiveness, Business Assessment) framework to assess international opportunities. The Market Attractiveness (“MA”) analysis included: total volume and volume growth in hectolitres of the international premium lager segment; the price premium between the international premium lager segment and the top volume lager brands; and, the geographic and cultural distance between the market and Grolsch’s home base in the Netherlands.

The distance measure had four components: differences in languages; non-membership vs. membership of the European Union (of which the Netherlands was a founding member); the landed cost of transport; and differences in GDP per capita. The Business Assessment (“BA”) involved the total volume and volume growth of Grolsch premium lager, variable commercial contribution

12 Grolsch Company Book, “Brewing for the Future,” 2006, p. 35.

13 Ibidem.

14 Ibidem.

15 Ibidem.

16 Ibidem.

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(contribution margin minus the direct expenses associated with serving a market), and Grolsch’s share of the premium lager segment. Exhibit 8 provides more detail.

Each year, the company worked through these calculations to assign aggregate scores to each market being considered. Markets with high scores were classified as “key,” those with somewhat lower scores as “seeding,” and those with low scores as “trading”. Exhibit 9 shows the output of the 2006 MABA analysis. A Grolsch executive commented that: “The MABA is a tool that informs us in our decisions. At the end of the day, the senior management decides on whether a market is key, seeding or trading each year during the annual strategic planning sessions.” Key/seeding markets were served by one of two main groups within the sales organization, Brand Builders, and trading markets by the other, Direct Export. The Grolsch policy for trading markets was to generate profits each year. The profitability was measured by ensuring that exports to trading markets covered at least variable costs and the direct expenses associated with management such as transportation, sales people, marketing and customer service.

Operations Grolsch followed German purity laws and emphasized the finest natural ingredients, the absence

of additives such as stabilizers, the combination of two types of hops - an innovation dating back to the 1600s that was celebrated in the company’s logo - and a long maturation process. Some attention to procurement scale had recently been overlaid on the traditional emphasis on high-quality ingredients: in 2002, Grolsch formed a purchasing alliance with German brewer, Warsteiner.17 And internal training programs reinforced the legacy of craft-like, high quality brewing by emphasizing the theme of “Craftsmanship is Mastery.”

In 1998, Grolsch began to plan for a large new brewery to consolidate its two relatively old facilities: the Groenlo brewery, which produced for export, and the Enschede brewery, which produced for the Dutch market. The two towns waited anxiously as Grolsch chose between them and finally opted for a location outside Enschede. During the planning phase, an explosion destroyed parts of the old Enschede brewery, forcing a major scramble to keep operations going. In 2001, after delays, Grolsch received governmental approval to build. When the new brewery opened in April 2004, it had cost €277m,18 and had a capacity of 3.2 million hl that could be increased to as much as 6 million hl. (In the short run, expansion to 3.7 million hl was planned at an additional cost of €10m). Grolsch estimated that it would save €1m in operating costs annually by optimizing production, but no significant headcount reductions were anticipated. Pride in the new brewery - described as the most modern in the world - focused on its state-of-the-art, environmentally friendly technology.

Grolsch’s new brewery was located on a major highway and was about 200 kilometers from the main Dutch shipping port, Rotterdam. Beer was transported by truck to markets within the European Union, at costs estimated to range from about €1.47 per hectolitre to Germany to €6.68 per hectolitre to Spain.19 Transportation to all other markets was by ship, in 20-foot, 40-foot or 45-foot20 containers at costs estimated to be €10-15 per hectolitre (see Exhibit 10 for more detailed estimates).

17 “Grolsch, Warsteiner boost alliance with Italy deal,” Reuters News, Jan. 28, 2003.

18 Grolsch Brewery, Proleit Website, http://www.proleit.com/en/Industries/BreweryGrolsch_Neubau.php. Accessed Sept. 13, 2007.

19 Estimated by case writer.

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http://www.proleit.com/en/Industries/BreweryGrolsch_Neubau.php


Marketing Grolsch’s other marketing policies, pricing, promotion and placement were meant to reinforce its

positioning as a premium product.

Pricing

Grolsch was priced similarly to Heineken and was considered a standard lager brand within the Netherlands. Overseas, Grolsch positioned the brand at premium prices. In three of its six largest non-domestic markets - the US, Canada and Australia - Grolsch was priced at a discount to other leading European imports. Thus, in the US, the average off-premise21 retail price of Grolsch Premium Lager was about $3.18 (€2.53) per litre in 2006, compared to Heineken at $3.48 (€2.77) and Budweiser at $2.13 (€1.70). And prices in Canada approached standard rather than premium levels, with C$4.50 (€3.16) for Grolsch vs. C$6.24 (€4.38) for Heineken and C$4.44 (€3.11) for Budweiser. In the UK pricing was comparable to the leading premium lagers: Grolsch averaged £1.90 (€2.79) per litre versus £1.93 (€2.84) for Stella Artois, £2.11 (€3.10) for Budweiser and less than £1.50 (€2.20) for standard lagers. In France and Russia - the markets where the Amsterdam brand was the key driver of volume gains - Grolsch Premium Lager was priced substantially higher than other premium lagers.

Promotion

Like most brewers, Grolsch undertook a wide array of promotional activities. For example, the launch of the new green bottle in 2007 was supported by advertising in print media, the Internet (to make special offers and build the customer base through music programs and fan clubs), outdoor and on-premise displays, sponsorships (e.g., of football clubs), events (e.g., music concerts) and television advertising. TV advertising, which had begun in the 1960s, nonetheless garnered the bulk of promotional expenditures. In the Netherlands, Grolsch spent 4% to 6% of sales on advertising. Recent spots featured 30-somethings in cosmopolitan settings with tag lines like “One day you won’t drink beer anymore, you’ll drink Grolsch.” In the UK, where Grolsch enjoyed access to an extensive network of on-premise locations through its relationship with MolsonCoors (the country’s second-largest brewer and the owner of the largest brand, Carling), advertising reinforced the “Green Light District” campaign in which customers were served Grolsch beer in locations saturated with Grolsch imagery. UK TV advertising also played up Grolsch’s Dutch origins, often by poking fun at them, e.g., with a Dutch spokesperson speaking English with an exaggerated Dutch accent.

Dutch roots were also accentuated in TV advertising in other markets since Grolsch believed that its main locational advantage was the image of beer from Northern Europe and, especially, the Netherlands, which became a major exporter (to England) back in the 14th century and now exported more of its production - about 50% - than any other major producer. This country-of-origin advantage had been validated by Heineken, which imported its beer into the United States instead of producing it locally and, as the second largest import, behind Corona, sold more than 5 million hl of it there a year, at the highest prices in the market. But Dutch origins had to be pitched differently in countries less familiar with the Dutch: as one

20 20-foot containers were a shipping standard and were 8 feet high x 8.5 feet wide and 20 feet long. 40-and 45-foot containers had the same height and width as 20-foot containers with the only difference being length.

21 Off-premise was also called off-trade and referred to supermarkets, specialty stores and other shops. On-premise (or on-trade) signified restaurants, bars, hotels and catering.

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executive put it, “Few people in the US have specific knowledge about the Netherlands.” In addition, while UK and US advertising ostensibly shared the English language, the content of the ads had to be varied greatly to reflect other large cultural differences between the two markets (see Exhibit 11).

In the US, the allure of the Grolsch swingtop bottle featured prominently in a new commercial, “Got that Swing” aired during the professional (US) football playoffs and throughout the year in New York’s Times Square. This differed markedly from Grolsch’s edgier UK commercials. The broader approach, in both the US and Canada, was to use targeted advertising and promotional campaigns to reach trendsetters in select regions of the country. Promotional efforts in other, smaller markets, were much more modest.

Placement/Distribution

Grolsch emphasized that it selected the best route to the consumer by market, in cooperation with importers, distributors, brewers and retailers. Placement or distribution arrangements in the Netherlands had had the most time to mature. In off-premise channels, Grolsch resisted aggressive price promotions (by supermarkets, particularly) and emphasized its premium products, packaging and ancillaries such as the PerfectDraft®22 dispenser system.23 Grolsch relied on on-premise channels more than its rivals and owned six beverage wholesalers that handled half its sales, guaranteed financing of premises and equipment by bar-owners and owned properties operated as bars and restaurants.24

Distribution in the United Kingdom had also been in place for some time - since 1994, despite the change in the joint venture partner from Bass to MolsonCoors (Grolsch was MolsonCoors’s second largest lager brand in the UK after Carling). But elsewhere, there had been more turnover. In the US, Canada, Australia and New Zealand, Grolsch was on its third or fourth set of distributorships since the mid-1990s (see Exhibit 12 for details). Except for France, where Grolsch owned its own local distribution and Russia, where Efes was licensed to brew Amsterdam beer, most other countries had seen similar changes.

Industry Dynamics

In 2005, global beer volumes were 1.5 billion hl (155.2 billion litres) and total retail value – including, in many countries, a very sizeable tax component – amounted to €354 billion.25 Globally, volumes had grown at 2.7% per year while global value had increased by 4.7% per year between 2000 and 2005.26 Beer markets in developed regions such as North America, Western Europe and Japan had recently been flat or had suffered slight decreases in volume between 2000 and 2005. Global volume growth was driven by developing regions such as Eastern Europe and Asia Pacific, in both of which volume had grown by more than 5% per year. Exhibit 13 shows information on past and projected volumes in the 20 largest country markets. Overall, lagers accounted for nearly 95% of market volume and 90% of value, and ales, stouts and no/low-alcohol beer for the remainder.

22 The PerfectDraft® system was an appliance developed by Philips and was an appliance designed to replicate draft beer served at bars and restaurants. Several major beer brands marketed 6-litre kegs suitable for the appliance.

23 Grolsch Annual Report 2006, Dec. 31, 2006, p. 12.

24 Ibidem.

25 “The World Market for Alcoholic Drinks,” Euromonitor, p. 5.

26 Ibidem.

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Partly because of the low price-elasticity of demand for beer (estimated at -0.3 for the Netherlands, for instance), brewers responded to volume pressures by trying to build up the premium part of their portfolios, often by launching premium line extensions to recognized brands.27 Worldwide, premium lager represented 16% of volume and 28% of lager value in 2005, up from 15% and 23% respectively in 2000. Standard lagers accounted for 53% of volume and 58% of value – both figures down a few percentage points from 2000 – and economy lagers for the rest. Exhibit 14 tracks the premium lager segment by region over time.

Total imports - mostly of premium beers - represented 5% of global volume and 10.6% of global sales in 2005 (up from 4.3% and 8% respectively in 2000).28 Exhibit 15 disaggregates imported versus domestic sales by region. In addition, foreign brands were sometimes brewed under license for a local market. For example, Budweiser was brewed by Guinness for sales in Ireland. Heineken granted licenses to breweries in which it had stakes and also forged license-to-brew agreements with small breweries such as a deal with the Danish Brewing Group to brew Heineken for Denmark.29 Typical royalty/licensing fees depended on the beer’s price point, volume and promotional support; royalty/licensing fees ranged from €1 per hectolitre to €6 per hectolitre.

Nevertheless, in markets such as the US (by far the world’s largest importer), nearly all successful foreign brands were shipped from the brewery of origin because of the perceived importance that US consumers placed on “getting a real import.” Some of the successes had been truly spectacular, as in Corona’s ascent, past Heineken, to the ranks of the largest import and the second largest premium brand in the US market. But brand shares were generally stable in most developed markets, especially in Europe, in spite of significant advertising competition that swallowed up 4 to 8% of revenues for most major brewers. And at a global level, the combined market share of the top ten brands stood at 18% in 2005, versus 19% in 1995.30 Most of the top ten brands generated the majority of their volume from a single market such as Budweiser and Miller from the US (although SABMiller did brew Miller outside the US as well) or Skol from Brazil. Some brands, however, did have a large and broad presence outside their home markets (see Exhibit 1).

Where concentration had taken place was at the company level. Because of acquisitions and, to a lesser extent, joint ventures and organic growth, the five largest brewers had come to account for 38% of global volumes, up from 24% in 1996.31 As of 2006, the largest brewers were: Inbev, SABMiller, Anheuser-Busch, Heineken and Carlsberg (for comparisons, see Exhibit 16).

• InBev resulted from an €8 billion merger between Belgium’s Interbrew and Brazil’s AmBev in 2004, and had a broad presence, with particular strengths in Europe and Latin America and significant weakness only in North America.32

27 “The World Market for Alcoholic Drinks,” Euromonitor International, Dec. 2006, p. 12.

28 Ibidem., Dec. 2006, pp. 76-77.

29 Drinks Marketing Director, Heineken, Euromonitor 2005, p. 2.

30 Internal Grolsch Company Presentation, “Consolidation in the Global Beer Industry,” Management Team Meeting, Feb. 26, 2007, slide 18.

31 SABMiller Annual Report 2007, Online Edition, http://www.annual2007.sabmiller.com/2_gfootprint/gbeermarket.html. Accessed Aug. 23, 2007; and, The Brewing Industry, PaineWebber Analyst Report, Feb. 25, 1998, pp. 31-32.

32 Gilles Castonguay and Nicholas Winning, “Interbrew buy of AmBev wins shareholder approval,” Reuters News, Aug. 27, 2004.

10

http://www.annual2007.sabmiller.com/2_gfootprint/gbeermarket.html


• SABMiller had been formed when SAB (South African Breweries) acquired Miller from Phillip Morris in 2002 for €6 billion. It was strong in Africa and Eastern Europe; because of Miller, the share of its sales accounted for by North America was even larger, but the share of profits much smaller (see Appendix A for additional information).

• Anheuser-Busch’s footprint was the mirror image of InBev’s: very focused on North America (in addition to its leadership in the US, it owned 50% of Mexico’s Modelo, the producer of Corona).

• Heineken, despite its reputation as the global brand, derived nearly 70% of its revenue from Western and Eastern Europe. This figure would increase as it absorbed the market-leading UK operations of Scottish and Newcastle (S&N, previously the thirteenth largest brewer by volume), which it, along with Carlsberg, had taken over and broken up in the first half of 2008.

• Carlsberg was much smaller and even more dependent on Europe, especially Western Europe, but would end up with a more balanced European presence after absorbing S&N’s half of their erstwhile Eastern European joint venture, Baltic Beverages Holding.

Rumors of additional deals were rife in the brewing industry. The one most talked about in early 2008 was a possible merger between In-Bev and Anheuser-Busch. The two had already moved to take advantage of their complementary geographic positions by announcing that Anheuser Busch would import InBev’s leading brands – Stella Artois, Beck’s, Bass Ale – to the US (casting a pall over Grolsch’s tie-up with Anheuser-Busch for the same purpose). Some analysts were predicting that the probability of a merger was high due to “growth in emerging economies, cost savings and complementary geographies.”33

Despite feverish consolidation activity, evidence on its profitability was mixed. An academic study of short-run stock market reactions to the announcement of 21 major mergers and acquisitions in brewing between 2000 and 2005 found that 11 elicited negative reactions.34 It also concluded that cumulated reactions of this sort were negative across transactions by Interbrew and Heineken, and positive for SABMiller. But SABMiller’s positive record was due to just one deal: the purchase of Bavaria, the market leader in Colombia, for much less than expected. And the stock market’s negative reaction to the Interbrew-AmBev mega-merger, for example, seemed not to anticipate the efficiency increases that the new management team from AmBev subsequently squeezed out of the old Interbrew operations.

Looking at the positions that resulted from such moves suggested some additional conclusions. According to the same academic study, the relationship between the geographic spread of 48 large listed brewers and measures of their accounting profitability was negative and statistically significant, and there was no simple relationship between overall company size and profitability.35 Instead, the brewers who earned the highest margins per hl seemed to combine high levels of revenue per hl with strong scale within key national markets (see Exhibit 17). There was also evidence

33 Jonathan Ratner, “Brewers to merge, analyst says,” Financial Post, National Post, July 24, 2007, p. FP6.

34 Oliver Johannes Ebneth, “Internationalisierung Und Unternehmenserfolg Börsennotierter Braukonzerne,” Göttingen, May 2006, p. 141.

35 Ibidem.

11


of a strong correlation between market concentration and profitability at the national level (see Exhibit 18).36

Outside of the major brewers, there were thousands upon thousands of commercial breweries worldwide. Smaller brewers typically competed on the strength of their local reputation, history and advertising voice. But even some of the smaller operations were, often with the help of major brewers as well as resources generated by strong domestic positions, beginning to globalize. For example, Baltic Beverages Holdings, the object of the tussle between S&N and Carlsberg, had begun an aggressive pan-European export and distribution drive with its Russian Baltika brand. As Baltika’s president put it: “The international interest in Russia and Russian business is great, and in my opinion it would only be natural for foreigners interested in Russia to try some Russian beer. And once they’ve tried it, the product's quality will eventually win out - just as was the case with Corona beer, which was originally a Mexican brand.”37

Exhibit 1

Top 25 Beer Brands: Total Volume and International Volumes

Top 25 World's Brands Top 25 World's BrandsTOTAL VOLUMES NON-DOMESTIC (INTERNATIONAL) VOLUMES ONLY

Brand Brewer VolumeMillions ofHL (2006E)


1 Bud (Light) Anheuser-Busch 50.4 1 Heineken Heineken 20.12 B

S

udweiser Anheuser-Busch 47.0 2 Corona Modelo 11.93 kol InBev 34.2 3 Carlsberg Carlsberg 10.84 orona Modelo 32.7 4 Budweiser Anheuser-Busch 9.95 NOW SABMiller 26.0 5 Amstel Heineken 9.66 Heineken Heineken 25.8 6 Stella Artois InBev 9.07 rahma Chopp InBev 24.2 7 Guinness Guinness 8.68 oors Light MCBC 22.7 8 Foster’s Foster’s/S&N 8.69 Miller Lite SABMiller 21.2 9 Brahma InBev 6.6

10 uper Dry Asahi 17.5 10 Tuborg Carlsberg 4.911 singtao Tsingtao 15.6 11 Beck's InBev 3.612 Beijing Beer Beijing Yanjing 15.3 12 Pale Pilsen San Miguel Phillipines 3.013 usch (range) Anheuser-Busch 15.2 13 Kronenbourg S&N 2.514 arling Black label (Africa) SABMiller 12.8 14 Coors Light MolsonCoors 2.315 Carlsberg Carlsberg 12.2 15 Bavaria SABMiller 1.916 mstel Heineken 12.2 16 Tiger Asia Pacific Breweries 1.917 altika(range) BBH 12.0 17 Miller Genuine Draft SABMiller 1.718 Schincariol/Nova Schin Schincariol 11.8 18 Labatt InBev 1.719 ntarctica InBev 10.8 19 Holsten Carlsberg 1.520 Zhujiang Zhujiang 10.7 20 Tecate FEMSA 1.421 olar (range) Polar 10.4 21 Grolsch Grolsch 1.422 nness Guinness 10.1 22 Baltica BBH 1.423 Stella Artois InBev 9.9 23 Obolon Obolon 1.324 oster’s Foster’s/S&N 9.8 24 Kozel SABMiller 1.325 hang Beer Thai 9.1 25 Modelo Especial Modelo 1.2

CS

Note: The information in "Total Volumes" excludes local brands in China.

Source: Company documents

36 Ibidem, p. 42.

37 Galina Stolyarova, “New Ambitions for Russian Beer,” Business Week, July 3, 2007, http://www.businessweek.com/globalbiz/content/jul2007/gb2007073_616975.htm?chan=search. Accessed Aug. 23, 2007.

BC

ST

BC

AB

A

PGui

FC

Top 25 World's Brands Top 25 World's BrandsTOTAL VOLUMES NON-DOMESTIC (INTERNATIONAL) VOLUMES ONLY



1 Bud (Light) Anheuser-Busch 50.4 1 Heineken Heineken 20.12 udweiser Anheuser-Busch 47.0 2 Corona Modelo 11.93 kol InBev 34.2 3 Carlsberg Carlsberg 10.84 orona Modelo 32.7 4 Budweiser Anheuser-Busch 9.95 NOW SABMiller 26.0 5 Amstel Heineken 9.66 Heineken Heineken 25.8 6 Stella Artois InBev 9.07 rahma Chopp InBev 24.2 7 Guinness Guinness 8.68 oors Light MCBC 22.7 8 Foster’s Foster’s/S&N 8.69 Miller Lite SABMiller 21.2 9 Brahma InBev 6.6

10 uper Dry Asahi 17.5 10 Tuborg Carlsberg 4.911 singtao Tsingtao 15.6 11 Beck's InBev 3.612 Beijing Beer Beijing Yanjing 15.3 12 Pale Pilsen San Miguel Phillipines 3.013 usch (range) Anheuser-Busch 15.2 13 Kronenbourg S&N 2.514 arling Black label (Africa) SABMiller 12.8 14 Coors Light MolsonCoors 2.315 Carlsberg Carlsberg 12.2 15 Bavaria SABMiller 1.916 mstel Heineken 12.2 16 Tiger Asia Pacific Breweries 1.917 altika(range) BBH 12.0 17 Miller Genuine Draft SABMiller 1.718 Schincariol/Nova Schin Schincariol 11.8 18 Labatt InBev 1.719 ntarctica InBev 10.8 19 Holsten Carlsberg 1.520 Zhujiang Zhujiang 10.7 20 Tecate FEMSA 1.421 olar (range) Polar 10.4 21 Grolsch Grolsch 1.422 nness Guinness 10.1 22 Baltica BBH 1.423 Stella Artois InBev 9.9 23 Obolon Obolon 1.324 oster’s Foster’s/S&N 9.8 24 Kozel SABMiller 1.325 hang Beer Thai 9.1 25 Modelo Especial Modelo 1.2

BSCS

BC

ST

BC

AB

A

PGui

FC

12

http://www.businessweek.com/globalbiz/content/jul2007/gb2007073_616975.htm?chan=search


Exhibit 2

Quality Ratings and Market Share

Volumes and Average Quality Rating of Leading Beer Brands

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

- 5.0 10.0 15.0 20.0 25.0Volumes (millions of hl)

Qua

lity

Rat

ing

(1-5

)

Heineken

Grolsch

Volumes and Average Quality Rating of Leading Beer Brands

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

- 5.0 10.0 15.0 20.0 25.0Volumes (millions of hl)

Qua

lity

Rat

ing

(1-5

)

Heineken

Grolsch

13

Volumes (millions hl) Avg. Quality RatingHeineken 20.1 3.17Corona 11.9 3.37Carlsberg 10.8 3.46Budweiser 9.9 2.72Amstel Light 9.6 3.33Stella Artois 9.0 3.66Guinness 8.6 3.93Foster's 8.6 2.94Tuborg 4.9 3.56Beck's 3.6 3.38San Miguel 3.0 3.73Coors Light 2.3 2.69Miller 1.7 3.04Labatt 1.7 3.22Tecate 1.4 3.50Grolsch 1.4 3.82

Volumes (millions hl) Avg. Quality RatingHeineken 20.1 3.17Corona 11.9 3.37Carlsberg 10.8 3.46Budweiser 9.9 2.72Amstel Light 9.6 3.33Stella Artois 9.0 3.66Guinness 8.6 3.93Foster's 8.6 2.94Tuborg 4.9 3.56Beck's 3.6 3.38San Miguel 3.0 3.73Coors Light 2.3 2.69Miller 1.7 3.04Labatt 1.7 3.22Tecate 1.4 3.50Grolsch 1.4 3.82


Explanation: This chart places leading beer brands (based on non-domestic volume) by volume in millions of hl (shown on the x-axis) and quality rating (shown on the y-axis). Average quality ratings are subjective in nature and were gathered by users of the website (rateitall.com) rating the taste of each beer. The scale was: Terrible (1), Bad (2), Ok (3), Good (4), and Great (5).

Source: Compiled by case writers based on volume information presented in Exhibit 1 and quality rating averages by searching on rateitall.com. Accessed May 28, 2008.

14


Exhibit 3

Map of the Netherlands

BELGIUM

GERMANY

Maastricht

EindhovenTerneuzen

TilburgNijmegen

AmhemUtrecht

Rotterdam

Dordrecht

The Hague

Europoort

Zwolle

HaarlemIJmuiden

DenHelder Assen

AMSTERDAM

NorthSea

Delfzijl

GroningenLeeuwarden

0 25 50 km

0 25 50 mi

Enschede

BELGIUM

GERMANY

Maastricht

EindhovenTerneuzen

TilburgNijmegen

AmhemUtrecht

Rotterdam

Dordrecht

The Hague

Europoort

Zwolle

HaarlemIJmuiden

DenHelder Assen

AMSTERDAM

NorthSea

Delfzijl

GroningenLeeuwarden

0 25 50 km

0 25 50 mi

Enschede

Source: Map from CIA World Factbook.

15


Exhibit 4

Grolsch Financial History

2000 2001 2002 2003 2004 2005 2006 2007

Volumes (millions of hl)Worldwide sales of the Grolsch brand 2.8 2.9 3.1 3.2 3.2 3.0 2.9 2.8Worldwide sales of all owned brands 2.9 3.1 3.3 3.4 3.4 3.3 3.2 3.3

and beer sold under license% of total volume sold outside the Netherlands not avail not avail 45.9% 50.4% 50.0% 48.5% 50.0% 51.5%

P&L Statement (EUR millions)Net Sales 255.4 272.6 296.5 301.4 314.8 312.3 317.6 332.9EBITDA 56.6 58.7 61.4 61.0 58.3 54.9 56.2 58.8EBIT 36.9 38.6 42.9 42.4 32.1 25.2 25.7 28.6Net profit 27.0 28.6 30.1 30.4 20.6 18.0 19.2 20.0

Balance Sheet (EUR millions)AssetsNet intangible fixed assets 0.0 0.0 0.7 0.5 1.5 5.1 3.6 2.2Net tangible fixed assets 77.4 86.1 134.7 261.1 316.1 312.9 299.0 307.8Financials fixed assets (FFA) 27.1 50.9 54.3 41.8 46.7 46.5 40.8 45.8Inventories 13.8 15.1 16.2 14.6 17.7 16.7 16.5 19.8Receivables 48.1 36.7 41.6 39.5 46.5 56.9 57.1 80.6Cash, cash equivalents & securities 91.2 93.9 51.0 11.8 12.8 14.4 49.8 14.5Total Assets 257.5 282.6 298.5 369.2 441.3 452.4 466.9 470.7Equity and LiabilitiesShareholders' equity 158.6 187.2 204.9 230.1 239.9 244.8 255.8 258.5Provisions 16.6 13.6 12.3 11.4 18.1 19.8 24.1 23.0Long-term interest bearing debt 1.1 0.0 1.5 53.4 101.9 104.3 76.7 111.5Short-term interest bearing debt 0.0 0.0 0.0 3.6 4.0 9.9 34.0 4.1Trade creditors 16.8 24.7 24.4 12.6 17.4 16.8 19.6 20.7Other non-interest bearing liabilities 63.5 56.3 54.9 57.7 60.1 56.8 56.7 52.9Shareholders' Equity and Liabilities 257.5 282.6 298.5 369.2 441.3 452.4 466.9 470.7

Performance Per Share (in EUR/share except for number of shares)Net profit per share 1.60 1.69 1.78 1.80 1.22 1.06 1.13 1.18Dividends* 0.68 0.72 0.76 0.77 0.59 0.63 1.00 -Share price - year end closing 23.80 22.01 20.66 22.56 23.15 21.85 31.40 47.88Share price - high 25.20 24.20 24.30 23.48 25.00 26.10 33.59 48.00Share price - low 18.20 15.50 19.49 16.85 20.90 21.28 21.15 24.20Weighted average number of ordinary shares** 16,921,507 16,921,507 16,921,507 16,921,507 16,921,507 16,921,507 16,921,507 16,921,507

Other DataNumber of Employees 862 902 882 873 895 880 868 875

2000 2001 2002 2003 2004 2005 2006 2007

Volumes (millions of hl)Worldwide sales of the Grolsch brand 2.8 2.9 3.1 3.2 3.2 3.0 2.9 2.8Worldwide sales of all owned brands 2.9 3.1 3.3 3.4 3.4 3.3 3.2 3.3

and beer sold under license% of total volume sold outside the Netherlands not avail not avail 45.9% 50.4% 50.0% 48.5% 50.0% 51.5%

P&L Statement (EUR millions)Net Sales 255.4 272.6 296.5 301.4 314.8 312.3 317.6 332.9EBITDA 56.6 58.7 61.4 61.0 58.3 54.9 56.2 58.8EBIT 36.9 38.6 42.9 42.4 32.1 25.2 25.7 28.6Net profit 27.0 28.6 30.1 30.4 20.6 18.0 19.2 20.0

Balance Sheet (EUR millions)AssetsNet intangible fixed assets 0.0 0.0 0.7 0.5 1.5 5.1 3.6 2.2Net tangible fixed assets 77.4 86.1 134.7 261.1 316.1 312.9 299.0 307.8Financials fixed assets (FFA) 27.1 50.9 54.3 41.8 46.7 46.5 40.8 45.8Inventories 13.8 15.1 16.2 14.6 17.7 16.7 16.5 19.8Receivables 48.1 36.7 41.6 39.5 46.5 56.9 57.1 80.6Cash, cash equivalents & securities 91.2 93.9 51.0 11.8 12.8 14.4 49.8 14.5Total Assets 257.5 282.6 298.5 369.2 441.3 452.4 466.9 470.7Equity and LiabilitiesShareholders' equity 158.6 187.2 204.9 230.1 239.9 244.8 255.8 258.5Provisions 16.6 13.6 12.3 11.4 18.1 19.8 24.1 23.0Long-term interest bearing debt 1.1 0.0 1.5 53.4 101.9 104.3 76.7 111.5Short-term interest bearing debt 0.0 0.0 0.0 3.6 4.0 9.9 34.0 4.1Trade creditors 16.8 24.7 24.4 12.6 17.4 16.8 19.6 20.7Other non-interest bearing liabilities 63.5 56.3 54.9 57.7 60.1 56.8 56.7 52.9Shareholders' Equity and Liabilities 257.5 282.6 298.5 369.2 441.3 452.4 466.9 470.7

Performance Per Share (in EUR/share except for number of shares)Net profit per share 1.60 1.69 1.78 1.80 1.22 1.06 1.13 1.18Dividends* 0.68 0.72 0.76 0.77 0.59 0.63 1.00 -Share price - year end closing 23.80 22.01 20.66 22.56 23.15 21.85 31.40 47.88Share price - high 25.20 24.20 24.30 23.48 25.00 26.10 33.59 48.00Share price - low 18.20 15.50 19.49 16.85 20.90 21.28 21.15 24.20Weighted average number of ordinary shares** 16,921,507 16,921,507 16,921,507 16,921,507 16,921,507 16,921,507 16,921,507 16,921,507

Other DataNumber of Employees 862 902 882 873 895 880 868 875

*Note: In 2006, a plus dividend of 0.33 was paid on top of the basic dividend of 0.67. In 2007, no dividend was paid due to the sale of the company.

**The number of shares entitled to dividends at year end were 16,921,507 shares for the entire period (these refer to the number of shares held by third parties).

Source: Grolsch Analyst Report, Fortis, February 23, 2007, p. 9 with additions by case writer based on Grolsch Annual Report 2007, pp. 35-37. Volumes (2000-2003) taken from Annual Report 2003, p. 5 and volumes (2004-2007) taken from Annual Report 2007, p. 7.

16


Exhibit 5

Presentation to Investors showing Strategic Adaptation

Bottom-line:Focus on coststructure and

efficiency

Top-line:Focus on growthin full-grown beer

markets

Adapted focusand growth target

core marketsExpansive on-trade

policy

Adapted marketInvestments:Increases inMarketing budgets, costs of

Development and investmentin core market

Adapted organizationalstructure: Business teams,

innovation department, R&Dbrewery

Adaptedvision/mission

Adapted marketposition

Adapted brand strategy- Advertising campaign

Adapted productProposition-New design-New concepts

Adapted productionand internal logistics:

Flexible labor

Decreases inoverhead expenses

Enhancing the efficiencyof the new facilities: Efficiency inbrewing process and efficiency

in filling lines

Decrease in cost price:Procurement, economic

alliances

Bottom-line:Focus on coststructure and

efficiency

Top-line:Focus on growthin full-grown beer

markets

Adapted focusand growth target

core marketsExpansive on-trade

policy

Adapted marketInvestments:Increases inMarketing budgets, costs of

Development and investmentin core market

Adapted organizationalstructure: Business teams,

innovation department, R&Dbrewery

Adaptedvision/mission

Adapted marketposition

Adapted brand strategy- Advertising campaign

Adapted productProposition-New design-New concepts

Adapted productionand internal logistics:

Flexible labor

Decreases inoverhead expenses

Enhancing the efficiencyof the new facilities: Efficiency inbrewing process and efficiency

in filling lines

Decrease in cost price:Procurement, economic

alliances

Source: Grolsch IR Presentation, July 2006, Combined slides 24 and 26.

17

SM-1529-

18

E Grolsch: Growing Globally

Source: Company Documents.

Exhibit 6

Range of Grolsch Products

Grolsch Premium Lager

Swingtop Bottle New Bottle Cans

Other Products

Amber Premium Premium Amsterdam Range Ale Weizen Blonde


19

Exhibit 7

Historical International Expansion Timeline: Grolsch vs. Heineken

1615Willem NeerfeldtStarts brewingIn Grolle

1876-Buildsa new brewery 1895-The De Groen

family takes over

1897-The Swingtopis introduced

1922-Two breweriesmerge

1946-Grolsch beginsexporting to Egypt, Curaçao, Surinam, Gold Coast, India, Sri Lanka, China, Malta and Indonesia

1976-Grolschimporters set up in the US.1977-Importersset up in the UK Early 1990s

Acquisitionsin Germany& UK

Mid-1990s:Push into Eastern Europe & Latin America

2007-SABMiller Acquisition ofGrolsch2004-New

Factory

2000s-Buysbreweries in Latin America, Russia, Egypt & Lebanon, 2004-JV with Asia Pacific Breweries for China

Early 1990s-Push intoEastern Europe. Mid 1990s: Buys European brands

1970s-Buysbreweriesin Europe, Opens newbrewery in Holland

Early 1980s-Consistentcolour is used. Amstel Light introduced toUS

1968-Heineken merges with Amstel: 50% of the Dutch market and 70% of exports

1948-Freddy Heineken returnsfrom 2 yearsin the US as a manager at thecompany

1932-EstablishesMalayan Brewerieswith other investors: 1933-Re-enters theUS after prohibition

1954-New greenlabel and logo with the “smilinge’s”

1935-Acquiresbreweries in Egypt, Dutch East Indies & BelgianCongo1939-Heineken goes public

1927-FirstInternational acquisition in Belgium

1592-The firstincamation of theHaystack in Amsterdamis established

1917-Firstexports tothe US

1914-Reachvolumes of300,000hl

1889-Heineken presented at World Fair in Paris

1864-Gerard Heineken buys theHaystack brewery

HEI

NEK

ENG

RO

LSC

H 1615Willem NeerfeldtStarts brewingIn Grolle

1876-Buildsa new brewery 1895-The De Groen

family takes over

1897-The Swingtopis introduced

1922-Two breweriesmerge

1946-Grolsch beginsexporting to Egypt, Curaçao, Surinam, Gold Coast, India, Sri Lanka, China, Malta and Indonesia

1976-Grolschimporters set up in the US.1977-Importersset up in the UK Early 1990s

Acquisitionsin Germany& UK

Mid-1990s:Push into Eastern Europe & Latin America

2007-SABMiller Acquisition ofGrolsch2004-New

Factory

2000s-Buysbreweries in Latin America, Russia, Egypt & Lebanon, 2004-JV with Asia Pacific Breweries for China

Early 1990s-Push intoEastern Europe. Mid 1990s: Buys European brands

1970s-Buysbreweriesin Europe, Opens newbrewery in Holland

Early 1980s-Consistentcolour is used. Amstel Light introduced toUS

1968-Heineken merges with Amstel: 50% of the Dutch market and 70% of exports

1948-Freddy Heineken returnsfrom 2 yearsin the US as a manager at thecompany

1932-EstablishesMalayan Brewerieswith other investors: 1933-Re-enters theUS after prohibition

1954-New greenlabel and logo with the “smilinge’s”

1935-Acquiresbreweries in Egypt, Dutch East Indies & BelgianCongo1939-Heineken goes public

1927-FirstInternational acquisition in Belgium

1592-The firstincamation of theHaystack in Amsterdamis established

1917-Firstexports tothe US

1914-Reachvolumes of300,000hl

1889-Heineken presented at World Fair in Paris

1864-Gerard Heineken buys theHaystack brewery

HEI

NEK

ENG

RO

LSC

H

Source: By case writer based on images and data from Grolsch and Heineken’s websites.


Exhibit 8

MABA Framework

Market Attractiveness (“MA”) Criteria

MARKET ATTRACTIVENESS (MA)

Measures

Volume of International Premium Lager

Segement in Hectolitres

Volume Growth ofInternational Premium

Lager Segment in Hectolitres (last three

years)

Price DifferentiationBetween International

Premium LagerSegment and Top

Lager Brand

Distance

Rated 1 to 5 RANGE: RANGE: RANGE: See the four distance

from 0 hl 0 hl 0% specific measures

to over 10 million hl over 1,000 hl over 40% below

DISTANCE SPECIFIC MEASURES

DISTANCE MEASURES

Language EU Relation Transport in EUROS GDP per capita

Rated 1 to 5 RANGE: RANGE: RANGE: RANGE:

fromfrom languages based

on other scriptsfrom non-western

country from over 1,500 euros from less than

$10,000

toto English, German or

Dutchto EU country to less than 500 euros to over $25,000

MARKET ATTRACTIVENESS (MA)

Measures

Volume of International Premium Lager

Segement in Hectolitres

Volume Growth ofInternational Premium

Lager Segment in Hectolitres (last three

years)

Price DifferentiationBetween International

Premium LagerSegment and Top

Lager Brand

Distance

Rated 1 to 5 RANGE: RANGE: RANGE: See the four distance

from 0 hl 0 hl 0% specific measures

to over 10 million hl over 1,000 hl over 40% below

DISTANCE SPECIFIC MEASURES

DISTANCE MEASURES

Language EU Relation Transport in EUROS GDP per capita

Rated 1 to 5 RANGE: RANGE: RANGE: RANGE:

fromfrom languages based

on other scriptsfrom non-western

country from over 1,500 euros from less than

$10,000

toto English, German or

Dutchto EU country to less than 500 euros to over $25,000

Note: Each measure is rated from 1 to 5. The ranges are shown under each heading.

Source: Drawn by case writer. Based on company documents.

Business Assessment (“BA”) Criteria

BUSINESS ASSESSMENT (BA)

Measures

Volume of GrolschPremium Lager in

Hectolitres

Volume Growth ofGrolsch Premium

Lager in Hectolitres(last five years)

Variable Commercial Contribution in euros

per Hectolitre

Premium LagerSegment Share ofGrolsch Premium

Lager

Rated 1 to 5 Measured in hl Measured in hl Measured in euros Measured in hl

BUSINESS ASSESSMENT (BA)

Measures

Volume of GrolschPremium Lager in

Hectolitres

Volume Growth ofGrolsch Premium

Lager in Hectolitres(last five years)

Variable Commercial Contribution in euros

per Hectolitre

Premium LagerSegment Share ofGrolsch Premium

Lager

Rated 1 to 5 Measured in hl Measured in hl Measured in euros Measured in hl

Source: Drawn by case writer. Based on company documents.


Exhibit 9

MABA Input and Scores

2000 2006UK Key KeyFrance Seeding KeyUSA Key KeyCanada Key KeyAustralia Key KeyNew Zealand Key KeySweden Trading SeedingRussia Seeding SeedingPoland Key Trading

2000 2006UK Key KeyFrance Seeding KeyUSA Key KeyCanada Key KeyAustralia Key KeyNew Zealand Key KeySweden Trading SeedingRussia Seeding SeedingPoland Key Trading

MABA Graph 2006High

Mar

ketA

ttrac

tiven

ess

Medium

Low

Strong Average WeakBusiness Assessment

Canada

UKRussia

Australia

New Zealand

Sweden France

Poland

Spain

USA China

MABA Graph 2006High

Mar

ketA

ttrac

tiven

ess

Medium

Low

Strong Average WeakBusiness Assessment

Canada

UKRussia

Australia

New Zealand

Sweden France

Poland

Spain

USA China

Source: Company Documents.


Exhibit 10

Shipping Cost Estimates from Grolsch’s Enschede Plant

Estimates of Transport cost/hl by Country (in Euros)

16.52

13.3912.06

10.54

8.43

6.68 6.10 5.93 5.474.21

1.94 1.60 1.470.63

-

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

NewZea

land

Austra

liaUS

Canad

aChin

aSpa

in

Sweden

Russia UK

Poland

France

Belgium

German

y

Rotterd

am, N

L

Estimates of Transport cost/hl by Country (in Euros)

16.52

13.3912.06

10.54

8.43

6.68 6.10 5.93 5.474.21

1.94 1.60 1.470.632.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

NewZea

land

Austra

liaUS

Canad

aChin

aSpa

in

Sweden

Russia UK

Poland

France

Belgium

German

y

Rotterd

am, N

L-

Source: Estimated by case writer based on different shipping formats.

Exhibit 11

Cultural Differences in Advertising: UK and US (in percentage)

TV Commercials for Beer: the US vs. the UK

Value US UK Rhetoric US UKIndividualism 70.8 15.8 Direct Speech 91.7 2.6Modernity 45.8 0.0 Emotional/Sexual Appeal 78.9 8.1Achievement 70.8 10.5 Humorous Appeal 21.1 91.9Tradition 4.2 44.7 Special Occasion? 85.7 16.2Eccentricity 4.2 81.6 (24 TV ads) (38 TV ads)

TV Commercials for Beer: the US vs. the UK

Value US UK Rhetoric US UKIndividualism 70.8 15.8 Direct Speech 91.7 2.6Modernity 45.8 0.0 Emotional/Sexual Appeal 78.9 8.1Achievement 70.8 10.5 Humorous Appeal 21.1 91.9Tradition 4.2 44.7 Special Occasion? 85.7 16.2Eccentricity 4.2 81.6 (24 TV ads) (38 TV ads)

Source: Zahna Caillat and Barbara Mueller, "The Influence of Culture on American and British Advertising: An Exploratory Comparison of Beer Advertising," Journal of Advertising Research, Vol. 36, 1996.


Exhibit 12

Grolsch’s Distribution in Selected Markets

Country Distribution Agreements

United States 1976-1995 Imported under its own company, Grolsch Importers Inc. in Atlanta, Georgia1996-2001 Sales, distribution and marketing by Canada's Seagram Company2001-2006 Sales, distribution and marketing by United States Beverage (USB)2006-present Sales, distribution and marketing by Anheuser-Busch

United Kingdom 1977-1979 Distribution by small independent UK-based distributor1979-1994 Imported through its own company, Grolsch (UK) Ltd.1994-2001 Joint venture with Bass Brewers to brew, distribute and market Grolsch2001-present Joint venture partner changed to Coors

Canada 1984-1997 Distribution by Cordevin (later named Rymax)1997-2002 Distribution by Rollick Beverage Company2002-present License to brew, distribution and marketing by Sleeman

Germany

Poland

Russia

Portugal

Australia/NZ

France

1991 Purchase of two regional breweries under a single structure (Rheinisch-BergischeBrauerei)

1994 Sale of one of the breweries (Wickueler) to Brau and Brunnen1994-present Distribution by Brau and Brunnen

1995 Acquisition of indirect stake in Elbrewery (EB) and Hevelius Brewery1996 Purchase of 25% of Australian equity firm Brewpole (which owned 51% of EB and

Hevelius Brewery. The other 49% was owned by the Polish government)1998 Sale of its 25% stake of Brewpole1998-2003 Distribution by Brewpole2003-present Distribution by Carey Agri

1999 Investment of €115,000 in the building of a new brewery in Ufa, Bashkortostan2000 Sale of stake in the brewery2006-present Alliance with Efes to brew and distribute the Amsterdam brand

2000-present Distribution by Sumolis' unit Cereuro2001 Purchase of a 20% stake in Cereuro2005 Sale of stake in Cereuro

1985-1991 Distribution by S. Smith and Son1991-1998 Distribution by Cascade Brewery Co Ltd. 1998-2006 Distribution by Tucker Seabrook2006-2007 Distribution by New Zealand's Independent Liquor2007-present Distribution by Premium Beverages

1999-present Distribution under its own company, Bières d'Europe with a focus on the Amsterdambrand

Country Distribution Agreements

United States 1976-1995 Imported under its own company, Grolsch Importers Inc. in Atlanta, Georgia1996-2001 Sales, distribution and marketing by Canada's Seagram Company2001-2006 Sales, distribution and marketing by United States Beverage (USB)2006-present Sales, distribution and marketing by Anheuser-Busch

United Kingdom 1977-1979 Distribution by small independent UK-based distributor1979-1994 Imported through its own company, Grolsch (UK) Ltd.1994-2001 Joint venture with Bass Brewers to brew, distribute and market Grolsch2001-present Joint venture partner changed to Coors

Canada 1984-1997 Distribution by Cordevin (later named Rymax)1997-2002 Distribution by Rollick Beverage Company2002-present License to brew, distribution and marketing by Sleeman

Germany

Poland

Russia

Portugal

Australia/NZ

France

1991 Purchase of two regional breweries under a single structure (Rheinisch-BergischeBrauerei)

1994 Sale of one of the breweries (Wickueler) to Brau and Brunnen1994-present Distribution by Brau and Brunnen

1995 Acquisition of indirect stake in Elbrewery (EB) and Hevelius Brewery1996 Purchase of 25% of Australian equity firm Brewpole (which owned 51% of EB and

Hevelius Brewery. The other 49% was owned by the Polish government)1998 Sale of its 25% stake of Brewpole1998-2003 Distribution by Brewpole2003-present Distribution by Carey Agri

1999 Investment of €115,000 in the building of a new brewery in Ufa, Bashkortostan2000 Sale of stake in the brewery2006-present Alliance with Efes to brew and distribute the Amsterdam brand

2000-present Distribution by Sumolis' unit Cereuro2001 Purchase of a 20% stake in Cereuro2005 Sale of stake in Cereuro

1985-1991 Distribution by S. Smith and Son1991-1998 Distribution by Cascade Brewery Co Ltd. 1998-2006 Distribution by Tucker Seabrook2006-2007 Distribution by New Zealand's Independent Liquor2007-present Distribution by Premium Beverages

1999-present Distribution under its own company, Bières d'Europe with a focus on the Amsterdambrand

Source: Created by case writers.


Exhibit 13

Top 20 Countries Consumption

TOP 20 COUNTRIES CONSUMPTION 2000-2011F

000s hectolitres 2000 2001 2002 2003 2004 2005 2006F 2008F 2011F

CHINA 223,116 227,145 241,420 255,626 286,348 309,255 330,039 368,326 426,382USA 235,047 236,654 239,676 237,484 234,969 232,582 230,721 225,901 220,522GERMANY 103,309 101,042 100,564 97,183 95,639 94,994 94,200 93,094 91,232BRAZIL 81,836 83,880 84,850 82,876 85,494 90,623 94,248 100,474 108,724RUSSIA 55,174 62,987 70,713 76,252 84,790 90,225 95,650 105,257 115,908JAPAN 71,764 71,547 69,780 65,817 66,344 63,708 63,106 60,562 56,063UK 58,550 58,250 58,750 59,120 58,999 57,674 58,060 57,505 56,500MEXICO 50,297 50,939 51,183 53,311 54,684 57,133 59,373 63,540 68,626SPAIN 29,153 31,083 30,870 33,450 34,621 35,590 36,480 38,065 40,792POLAND 25,072 25,204 27,121 28,318 28,865 30,363 31,650 33,800 36,000SOUTH AFRICA 23,481 23,015 23,349 24,050 24,940 25,600 26,638 28,000 30,500VENEZUELA 18,100 19,910 17,550 15,334 21,234 22,565 23,852 25,748 28,575CANADA 20,709 21,213 21,335 21,491 22,094 22,178 22,535 23,020 23,739UKRAINE 10,392 12,247 14,043 15,701 17,490 21,503 24,133 27,888 32,591FRANCE 21,467 20,807 20,629 21,168 20,224 20,354 20,252 20,009 19,711THAILAND 10,664 11,720 12,682 15,788 16,191 17,290 18,417 20,950 24,675ITALY 16,258 16,672 16,330 17,440 17,194 17,262 17,318 17,492 17,755COLOMBIA 15,498 14,288 15,313 15,217 15,553 17,006 17,762 19,569 21,352AUSTRALIA 17,400 17,300 17,150 17,000 16,900 16,850 16,800 16,550 16,250SOUTH KOREA 16,499 17,787 18,274 17,722 17,629 16,663 16,533 16,483 16,475

TOTAL TOP 20 1,103,786 1,123,689 1,151,581 1,170,347 1,220,203 1,259,418 1,297,767 1,362,233 1,452,373

TOP 20 COUNTRIES CONSUMPTION 2000-2011F

000s hectolitres 2000 2001 2002 2003 2004 2005 2006F 2008F 2011F

CHINA 223,116 227,145 241,420 255,626 286,348 309,255 330,039 368,326 426,382USA 235,047 236,654 239,676 237,484 234,969 232,582 230,721 225,901 220,522GERMANY 103,309 101,042 100,564 97,183 95,639 94,994 94,200 93,094 91,232BRAZIL 81,836 83,880 84,850 82,876 85,494 90,623 94,248 100,474 108,724RUSSIA 55,174 62,987 70,713 76,252 84,790 90,225 95,650 105,257 115,908JAPAN 71,764 71,547 69,780 65,817 66,344 63,708 63,106 60,562 56,063UK 58,550 58,250 58,750 59,120 58,999 57,674 58,060 57,505 56,500MEXICO 50,297 50,939 51,183 53,311 54,684 57,133 59,373 63,540 68,626SPAIN 29,153 31,083 30,870 33,450 34,621 35,590 36,480 38,065 40,792POLAND 25,072 25,204 27,121 28,318 28,865 30,363 31,650 33,800 36,000SOUTH AFRICA 23,481 23,015 23,349 24,050 24,940 25,600 26,638 28,000 30,500VENEZUELA 18,100 19,910 17,550 15,334 21,234 22,565 23,852 25,748 28,575CANADA 20,709 21,213 21,335 21,491 22,094 22,178 22,535 23,020 23,739UKRAINE 10,392 12,247 14,043 15,701 17,490 21,503 24,133 27,888 32,591FRANCE 21,467 20,807 20,629 21,168 20,224 20,354 20,252 20,009 19,711THAILAND 10,664 11,720 12,682 15,788 16,191 17,290 18,417 20,950 24,675ITALY 16,258 16,672 16,330 17,440 17,194 17,262 17,318 17,492 17,755COLOMBIA 15,498 14,288 15,313 15,217 15,553 17,006 17,762 19,569 21,352AUSTRALIA 17,400 17,300 17,150 17,000 16,900 16,850 16,800 16,550 16,250SOUTH KOREA 16,499 17,787 18,274 17,722 17,629 16,663 16,533 16,483 16,475

TOTAL TOP 20 1,103,786 1,123,689 1,151,581 1,170,347 1,220,203 1,259,418 1,297,767 1,362,233 1,452,373

Source: Canadean, Oct. 2006.


Exhibit 13 (continued)

TOTAL CONSUMPTION PER CAPITARanked by data from 2005 Ranked by data from 2005

000s hectolitres 2000 2005 litres 2000 2005

WEST EUROPE (Top 10) WEST EUROPE (Top 10)GERMANY 103,309 94,994 IRELAND 149 133UK 58,550 57,674 GERMANY 126 115SPAIN 29,153 35,590 AUSTRIA 111 111FRANCE 21,467 20,354 UK 98 96ITALY 16,258 17,262 BELGIUM 98 91NETHERLANDS 13,227 12,747 FINLAND 79 87BELGIUM 10,064 9,475 DENMARK 102 87AUSTRIA 8,964 9,087 SPAIN 71 81PORTUGAL 6,477 6,662 NETHERLANDS 83 78IRELAND 5,675 5,470 PORTUGAL 63 63Others 25,736 24,899TOTAL 298,880 294,214

TOTAL 77 74

EAST EUROPE (Top 5) EAST EUROPE (Top 5)RUSSIA 55,174 90,225 CZECH REPUBLIC 161 159POLAND 25,072 30,363 ESTONIA 63 93UKRAINE 10,392 21,503 LITHUANIA 63 91CZECH REPUBLIC 16,517 16,205 SLOVENIA 88 82ROMANIA 11,470 14,575 CROATIA 86 81Others 42,338 45,746TOTAL 160,963 218,617

TOTAL 40 55

CENTRAL & SOUTH AMERICA (Top 5) CENTRAL & SOUTH AMERICA (Top 5)BRAZIL 81,836 90,623 ARUBA 98 113MEXICO 50,297 57,133 BRITISH VIRGIN ISLES 110 91VENEZUELA 18,100 22,565 CAYMAN ISLANDS 118 89COLOMBIA 15,498 17,006 NETHERLANDS ANTILLES 77 86ARGENTINA 12,281 14,195 VENEZUELA 74 85Others 32,811 39,730TOTAL 210,823 241,252

TOTAL 41 43

NORTH AMERICA NORTH AMERICAUSA 235,047 232,582 USA 83 78CANADA 20,709 22,178 CANADA 67 69TOTAL 255,756 254,760 TOTAL 82 78

ASIA (Top 5) ASIA (Top 5)CHINA 223,116 309,255 FRENCH POLYNESIA 78 69JAPAN 71,764 63,708 GUAM 68 59THAILAND 10,664 17,290 NEW CALEDONIA 72 58SOUTH KOREA 16,499 16,663 JAPAN 57 50PHILIPPINES 11,309 13,976 AMERICAN SAMOA 53 46Others 28,277 41,545TOTAL 361,629 462,437 TOTAL 10 13

CHINA 18 24

AUSTRALASIA AUSTRALASIAAUSTRALIA 17,400 16,850 AUSTRALIA 91 83NEW ZEALAND 3,056 3,159 NEW ZEALAND 80 78TOTAL 20,456 20,009 TOTAL 89 82

MIDDLE EAST/NORTH AFRICA (Top 5) MIDDLE EAST/NORTH AFRICA (Top 5)EGYPT 1,007 1,989 BAHRAIN 28 28ALGERIA 491 1,416 ISRAEL 17 13TUNISIA 1,070 1,001 TUNISIA 11 10MOROCCO 811 942 UNITED ARAB EMIRATES 10 8ISRAEL 1,100 926 LEBANON 3 5Others 1,005 1,208TOTAL 5,484 7,482

TOTAL 2 2

REST OF AFRICA (Top 5) REST OF AFRICA (Top 5)SOUTH AFRICA 23,481 25,600 SEYCHELLES 94 84NIGERIA 5,500 10,180 GABON 67 64CAMEROON 3,606 4,240 SOUTH AFRICA 53 55KENYA 2,463 3,430 BOTSWANA 29 29ANGOLA 1,663 3,321 MAURITIUS 33 29Others 20,129 22,137 OthersTOTAL 56,842 68,908 TOTAL 9 10

TOTAL CONSUMPTION PER CAPITARanked by data from 2005 Ranked by data from 2005

000s hectolitres 2000 2005 litres 2000 2005

WEST EUROPE (Top 10) WEST EUROPE (Top 10)GERMANY 103,309 94,994 IRELAND 149 133UK 58,550 57,674 GERMANY 126 115SPAIN 29,153 35,590 AUSTRIA 111 111FRANCE 21,467 20,354 UK 98 96ITALY 16,258 17,262 BELGIUM 98 91NETHERLANDS 13,227 12,747 FINLAND 79 87BELGIUM 10,064 9,475 DENMARK 102 87AUSTRIA 8,964 9,087 SPAIN 71 81PORTUGAL 6,477 6,662 NETHERLANDS 83 78IRELAND 5,675 5,470 PORTUGAL 63 63Others 25,736 24,899TOTAL 298,880 294,214

TOTAL 77 74

EAST EUROPE (Top 5) EAST EUROPE (Top 5)RUSSIA 55,174 90,225 CZECH REPUBLIC 161 159POLAND 25,072 30,363 ESTONIA 63 93UKRAINE 10,392 21,503 LITHUANIA 63 91CZECH REPUBLIC 16,517 16,205 SLOVENIA 88 82ROMANIA 11,470 14,575 CROATIA 86 81Others 42,338 45,746TOTAL 160,963 218,617

TOTAL 40 55

CENTRAL & SOUTH AMERICA (Top 5) CENTRAL & SOUTH AMERICA (Top 5)BRAZIL 81,836 90,623 ARUBA 98 113MEXICO 50,297 57,133 BRITISH VIRGIN ISLES 110 91VENEZUELA 18,100 22,565 CAYMAN ISLANDS 118 89COLOMBIA 15,498 17,006 NETHERLANDS ANTILLES 77 86ARGENTINA 12,281 14,195 VENEZUELA 74 85Others 32,811 39,730TOTAL 210,823 241,252

TOTAL 41 43

NORTH AMERICA NORTH AMERICAUSA 235,047 232,582 USA 83 78CANADA 20,709 22,178 CANADA 67 69TOTAL 255,756 254,760 TOTAL 82 78

ASIA (Top 5) ASIA (Top 5)CHINA 223,116 309,255 FRENCH POLYNESIA 78 69JAPAN 71,764 63,708 GUAM 68 59THAILAND 10,664 17,290 NEW CALEDONIA 72 58SOUTH KOREA 16,499 16,663 JAPAN 57 50PHILIPPINES 11,309 13,976 AMERICAN SAMOA 53 46Others 28,277 41,545TOTAL 361,629 462,437 TOTAL 10 13

CHINA 18 24

AUSTRALASIA AUSTRALASIAAUSTRALIA 17,400 16,850 AUSTRALIA 91 83NEW ZEALAND 3,056 3,159 NEW ZEALAND 80 78TOTAL 20,456 20,009 TOTAL 89 82

MIDDLE EAST/NORTH AFRICA (Top 5) MIDDLE EAST/NORTH AFRICA (Top 5)EGYPT 1,007 1,989 BAHRAIN 28 28ALGERIA 491 1,416 ISRAEL 17 13TUNISIA 1,070 1,001 TUNISIA 11 10MOROCCO 811 942 UNITED ARAB EMIRATES 10 8ISRAEL 1,100 926 LEBANON 3 5Others 1,005 1,208TOTAL 5,484 7,482

TOTAL 2 2

REST OF AFRICA (Top 5) REST OF AFRICA (Top 5)SOUTH AFRICA 23,481 25,600 SEYCHELLES 94 84NIGERIA 5,500 10,180 GABON 67 64CAMEROON 3,606 4,240 SOUTH AFRICA 53 55KENYA 2,463 3,430 BOTSWANA 29 29ANGOLA 1,663 3,321 MAURITIUS 33 29Others 20,129 22,137 OthersTOTAL 56,842 68,908 TOTAL 9 10

Source: Compiled from Global Beer Trends, Canadean, Oct. 2006.

25


Exhibit 14

Lager by Type: Premium, Standard and Economy

Global Sales of Lager by Price Segement: % Total Volume Breakdown 2000-2005

Billion litres 2000 2001 2002 2003 2004 2005Lager by price platform

- Premium Lager 19.3 20.1 21.1 22.1 23.2 23.9- Standard Lager 71.9 72.4 72.1 72.4 74.3 75.6- Economy Lager 35.7 38 40.4 42.1 44.1 46

Total 126.9 130.5 133.6 136.7 141.5 145.5

% total volume 2000 2001 2002 2003 2004 2005Lager by price platform

- Premium Lager 15.2 15.4 15.8 16.2 16.4 16.4- Standard Lager 56.7 55.5 54.0 53.0 52.5 52.0- Economy Lager 28.1 29.1 30.2 30.8 31.1 31.6

Total 100.0 100.0 100.0 100.0 100.0 100.0

US billions 2000 2001 2002 2003 2004 2005Lager by price platform


Total 317.9 309.4 314.3 345.8 376.4 395.4

% value 2000 2001 2002 2003 2004 2005Lager by price platform


Total 100.0 100.0 100.0 100.0 100.0 100.0

Global Sales of Lager by Price Segement: % Total Volume Breakdown 2000-2005

Billion litres 2000 2001 2002 2003 2004 2005Lager by price platform

- Premium Lager 19.3 20.1 21.1 22.1 23.2 23.9- Standard Lager 71.9 72.4 72.1 72.4 74.3 75.6- Economy Lager 35.7 38 40.4 42.1 44.1 46

Total 126.9 130.5 133.6 136.7 141.5 145.5

% total volume 2000 2001 2002 2003 2004 2005Lager by price platform


Total 100.0 100.0 100.0 100.0 100.0 100.0

US billions 2000 2001 2002 2003 2004 2005Lager by price platform


Total 317.9 309.4 314.3 345.8 376.4 395.4

% value 2000 2001 2002 2003 2004 2005Lager by price platform


Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: The World Market for Alcoholic Drinks, Euromonitor International, Dec. 2006, pp. 68-69.

26


Exhibit 15

Sales of Imported vs. Domestic Lager

Im

SALES OF LAGER BY IMPORT VS DOMESTIC SPLIT BY REGION VOLUMES (in billion litres)

2000 2001 2002 2003 2004 2005Western Europe 24.9 24.9 24.9 25 24.9 24.8

ImD

Im

D

ImD

Im

Dom

ImD

ImD

Im

D

ImD

Im

D

ImD

Im

ported 1.8 1.8 1.8 2 2.1 2.1Domestic 23.1 23 23 23 22.8 22.7

Eastern Europe 14.5 15.4 16.3 17.3 18.3 19.1ported 0.5 0.5 0.5 0.6 0.7 0.7

omestic 14 14.9 15.8 16.7 17.7 18.4

North America 24.7 24.7 24.8 24.8 25.1 24.9ported 2.3 2.5 2.7 2.8 2.9 3.1

Domestic 22.4 22.1 22.1 22 22.1 21.8

21 21.6 21.5 21.4 22.7 24Imported 0.1 0.1 0.1 0.1 0.2 0.2

omestic 20.9 21.4 21.4 21.3 22.5 23.8

34.8 36.9 38.8 40.7 42.9 44.8ported 0.4 0.4 0.5 0.5 0.6 0.6

omestic 34.4 36.5 38.3 40.1 42.3 44.2

1.7 1.7 1.6 1.6 1.7 1.7ported 0 0.1 0.1 0.1 0.1 0.1

Domestic 1.6 1.6 1.6 1.5 1.6 1.6

Africa and Middle East 5.3 5.4 5.7 5.9 6 6.3Imported 0.3 0.3 0.4 0.4 0.4 0.5

estic 5 5.1 5.3 5.5 5.6 5.8

TOTAL 126.9 130.6 133.6 136.7 141.6 145.6ported 5.4 5.7 6.1 6.5 7 7.3

omestic 121.4 124.6 127.5 130.1 134.6 138.3

VALUES (in US billion dollars)

2000 2001 2002 2003 2004 2005Western Europe 83.7 82 87.6 103.9 115.3 119.9

ported 8.4 8.6 9.3 12 14.9 15.4omestic 75.3 73.5 78.3 91.9 100.5 104.5

Eastern Europe 17 18.6 20.6 23.6 26.4 29.4ported 1.6 1.7 1.9 2.2 2.5 2.7

Domestic 15.4 16.9 18.7 21.4 23.9 26.7

North America 69.1 70.7 73 75.3 79.2 81.5Imported 10.2 11.4 12.6 13.6 14.6 15.8

omestic 58.9 59.3 60.4 61.7 64.6 65.7

34 33.7 30.6 32.1 35.1 41.3ported 0.5 0.5 0.4 0.5 0.5 0.7

omestic 33.5 33.2 30.1 31.6 34.5 40.7

95.2 86.8 84.5 88.2 94.1 95.1ported 3.3 3.3 3.7 3.9 4.2 4.4

Domestic 91.9 83.5 80.8 84.3 89.9 90.8

7 6.3 6.7 8.2 9.7 10.6Imported 0.3 0.3 0.4 0.5 0.6 0.7

omestic 6.7 6 6.4 7.7 9.1 9.8

Africa and Middle East 11.9 11.3 11.3 14.5 16.7 17.5ported 1.1 1.3 1.4 1.7 1.9 2.1

omestic 10.8 10 9.9 12.8 14.7 15.4

317.9 309.4 314.3 345.8 376.5 395.3ported 25.4 27.1 29.7 34.4 39.2 41.8

Domestic 292.5 282.4 284.6 311.4 337.2 353.6

Latin America

Asia Pacific

Australasia

Australasia

TOTAL

Latin America

Asia Pacific

SALES OF LAGER BY IMPORT VS DOMESTIC SPLIT BY REGION VOLUMES (in billion litres)

2000 2001 2002 2003 2004 2005Western Europe 24.9 24.9 24.9 25 24.9 24.8

ported 1.8 1.8 1.8 2 2.1 2.1Domestic 23.1 23 23 23 22.8 22.7

Eastern Europe 14.5 15.4 16.3 17.3 18.3 19.1ported 0.5 0.5 0.5 0.6 0.7 0.7

omestic 14 14.9 15.8 16.7 17.7 18.4

North America 24.7 24.7 24.8 24.8 25.1 24.9ported 2.3 2.5 2.7 2.8 2.9 3.1

Domestic 22.4 22.1 22.1 22 22.1 21.8

21 21.6 21.5 21.4 22.7 24Imported 0.1 0.1 0.1 0.1 0.2 0.2

omestic 20.9 21.4 21.4 21.3 22.5 23.8

34.8 36.9 38.8 40.7 42.9 44.8ported 0.4 0.4 0.5 0.5 0.6 0.6

omestic 34.4 36.5 38.3 40.1 42.3 44.2

1.7 1.7 1.6 1.6 1.7 1.7ported 0 0.1 0.1 0.1 0.1 0.1

Domestic 1.6 1.6 1.6 1.5 1.6 1.6

Africa and Middle East 5.3 5.4 5.7 5.9 6 6.3Imported 0.3 0.3 0.4 0.4 0.4 0.5

estic 5 5.1 5.3 5.5 5.6 5.8

TOTAL 126.9 130.6 133.6 136.7 141.6 145.6ported 5.4 5.7 6.1 6.5 7 7.3

omestic 121.4 124.6 127.5 130.1 134.6 138.3

VALUES (in US billion dollars)

2000 2001 2002 2003 2004 2005Western Europe 83.7 82 87.6 103.9 115.3 119.9

ported 8.4 8.6 9.3 12 14.9 15.4omestic 75.3 73.5 78.3 91.9 100.5 104.5

Eastern Europe 17 18.6 20.6 23.6 26.4 29.4ported 1.6 1.7 1.9 2.2 2.5 2.7

Domestic 15.4 16.9 18.7 21.4 23.9 26.7

North America 69.1 70.7 73 75.3 79.2 81.5Imported 10.2 11.4 12.6 13.6 14.6 15.8

omestic 58.9 59.3 60.4 61.7 64.6 65.7

34 33.7 30.6 32.1 35.1 41.3ported 0.5 0.5 0.4 0.5 0.5 0.7

omestic 33.5 33.2 30.1 31.6 34.5 40.7

95.2 86.8 84.5 88.2 94.1 95.1ported 3.3 3.3 3.7 3.9 4.2 4.4

Domestic 91.9 83.5 80.8 84.3 89.9 90.8

7 6.3 6.7 8.2 9.7 10.6Imported 0.3 0.3 0.4 0.5 0.6 0.7

omestic 6.7 6 6.4 7.7 9.1 9.8

Africa and Middle East 11.9 11.3 11.3 14.5 16.7 17.5ported 1.1 1.3 1.4 1.7 1.9 2.1

omestic 10.8 10 9.9 12.8 14.7 15.4

317.9 309.4 314.3 345.8 376.5 395.3ported 25.4 27.1 29.7 34.4 39.2 41.8

Domestic 292.5 282.4 284.6 311.4 337.2 353.6

Latin America

Asia Pacific

Australasia

Australasia

TOTAL

Latin America

Asia Pacific

Im

ImD

Im

D

ImD

Im

Dom

ImD

ImD

Im

D

ImD

Im

D

ImD

Im

Note: Totals were calculated by case writer and may not exactly tie to other figures mentioned in the report due to rounding.

Source: The World Market for Alcoholic Drinks, Euromonitor International, Dec. 2006, pp. 76-77.

27


Exhibit 16

Major Brewers

Company InBev SABMiller* Anheuser-Busch

Heineken Carlsberg** Modelo Molson Coors

Headquarters Belgium UK US Netherlands Denmark Mexico US/CanadaGlobal Market Share 2006 (Volume) 12.7% 8.9% 8.8% 6.3% 5.2% 2.9% 2.7%

Total Volume (hl million) - 2007 271.0 216.0 189.6 119.8 115.2 51.6 495-Year Volume Growth 20.2% 13.3% 3.0% 7.1% 7.2% 4.2% 5.1%

Revenues 2007 (Euro million) 14,430 13,608 12,194 12,564 6,007 4,879 4,524 Revenues/hl in Euros 53.25 63.00 64.30 104.87 52.14 94.64 91

5-Year Revenue Growth 15.6% 17.9% 3.4% 6.3% 5.3% 9.0% 9.1%EBITDA 2007 (Euro million) 5,324 2,946 3,647 2,292 1,092 1,564 721 EBITDA/hl in Euros 19.65 13.64 19.23 19.13 9.48 30.35 14

5-Year EBITDA Growth 28.9% 22.1% 11.2% 4.2% 7.4% 9.8% 12.6%

Geographic Distribution of Volume Sales (2006), in percentagesCentral & South America 42.0 21.8 0.9 2.4 0.1 68.9 2.2North America 4.5 29.4 82.6 7.4 0.3 28.0 73.8Asia 18.7 2.4 14.4 3.9 7.6 0.6 0.2Australasia 0.2 0.0 0.0 0.7 0.0 0.7 0.0West Europe 15.1 4.2 2.0 35.9 31.1 1.9 23.8East Europe 19.5 21.1 0.0 33.6 59.6 0.0 0.0Middle East & North Africa 0 0.0 0.0 1.6 0.3 0.0 0.0Rest of Africa 0 21.1 0.0 14.6 1.0 0.0 0.0

Major Brands (Percentage in parentheses refers tohow much the brand makes up of thecompany's overall volume)

Skol (15%), Brahma Chopp (10%), Antarctica Pilsen (6%), Stella Artois (4%), Quilmes Cristal (3%), Others - over200 brands(62%).

MillerLight(15%), CarlingBlack Label(8%), Castle(5%), Miller Genuine Draft(4%), Others(68%)

BudLight(33%), Budweiser (27%), Harbin (9%), Natural (7%), Busch Light (5%), Others (19%)

Heineken (11%), Amstel(4%), Star (2%), Cruzcampo(3%), Others(80%)

Carlsberg only(excludingBBH): Carlsberg(25%), Tuborg(15%), SuperBock (6%), Holsten (6%), Others (46%)

Corona Extra (60%), Modelo Especial (14%), Victoria (7%), Pacifico (6%), Others(13%)

Coors Light (49%), Carling(20%), Keystone Light (8%), Coors(3%), Others(20%)

.3

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Company InBev SABMiller* Anheuser-Busch

Heineken Carlsberg** Modelo Molson Coors

Headquarters Belgium UK US Netherlands Denmark Mexico US/CanadaGlobal Market Share 2006 (Volume) 12.7% 8.9% 8.8% 6.3% 5.2% 2.9% 2.7%

Total Volume (hl million) - 2007 271.0 216.0 189.6 119.8 115.2 51.6 495-Year Volume Growth 20.2% 13.3% 3.0% 7.1% 7.2% 4.2% 5.1%

Revenues 2007 (Euro million) 14,430 13,608 12,194 12,564 6,007 4,879 4,524 Revenues/hl in Euros 53.25 63.00 64.30 104.87 52.14 94.64 91

5-Year Revenue Growth 15.6% 17.9% 3.4% 6.3% 5.3% 9.0% 9.1%EBITDA 2007 (Euro million) 5,324 2,946 3,647 2,292 1,092 1,564 721 EBITDA/hl in Euros 19.65 13.64 19.23 19.13 9.48 30.35 14

5-Year EBITDA Growth 28.9% 22.1% 11.2% 4.2% 7.4% 9.8% 12.6%

Geographic Distribution of Volume Sales (2006), in percentagesCentral & South America 42.0 21.8 0.9 2.4 0.1 68.9 2.2North America 4.5 29.4 82.6 7.4 0.3 28.0 73.8Asia 18.7 2.4 14.4 3.9 7.6 0.6 0.2Australasia 0.2 0.0 0.0 0.7 0.0 0.7 0.0West Europe 15.1 4.2 2.0 35.9 31.1 1.9 23.8East Europe 19.5 21.1 0.0 33.6 59.6 0.0 0.0Middle East & North Africa 0 0.0 0.0 1.6 0.3 0.0 0.0Rest of Africa 0 21.1 0.0 14.6 1.0 0.0 0.0

Major Brands (Percentage in parentheses refers tohow much the brand makes up of thecompany's overall volume)

Skol (15%), Brahma Chopp (10%), Antarctica Pilsen (6%), Stella Artois (4%), Quilmes Cristal (3%), Others - over200 brands(62%).

MillerLight(15%), CarlingBlack Label(8%), Castle(5%), Miller Genuine Draft(4%), Others(68%)

BudLight(33%), Budweiser (27%), Harbin (9%), Natural (7%), Busch Light (5%), Others (19%)

Heineken (11%), Amstel(4%), Star (2%), Cruzcampo(3%), Others(80%)

Carlsberg only(excludingBBH): Carlsberg(25%), Tuborg(15%), SuperBock (6%), Holsten (6%), Others (46%)

Corona Extra (60%), Modelo Especial (14%), Victoria (7%), Pacifico (6%), Others(13%)

Coors Light (49%), Carling(20%), Keystone Light (8%), Coors(3%), Others(20%)

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All exchange rates were assumed as the 365-day interbank average from Oanda.com

Where EBITDA was not reported in annual reports, depreciation and amoritzation was added back to EBIT/Operating profit.

*SABMiller's fiscal year end is in March 31.

**Carlsberg includes Baltic Beverage Holding (BBH), which was a 50-50 joint venture with Scottish & Newcastle throughout the period.

Source: Compiled by case writer with information from Canadean and company annual reports.

28


Exhibit 17

Brewers: EBITDA per hectolitres in Euros (2004)

43,40

37,3035,60

25,3025,20 23,7021,50

17,9017,5017,00 15,70 15,30 12,90 12,8012,5012,10 11,50 9,60 8,20 7,202,80

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

40,00

45,00

50,00

Asa

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Kiri

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Strong scale combined withextreme rev/hl

Strong scale combinedwith extreme rev/hl Benefiting from scale or

high rev/hl

Lack of scale, lowrev/hl or both

43,40

37,3035,60

25,3025,20 23,7021,50

17,9017,5017,00 15,70 15,30 12,90 12,8012,5012,10 11,50 9,60 8,20 7,202,80

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

40,00

45,00

50,00

Asa

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Kiri

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Anh

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Nat

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San

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Sap

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sa

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SA

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iller

Car

lsbe

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oors

Efe

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Strong scale combined withextreme rev/hl

Strong scale combinedwith extreme rev/hl Benefiting from scale or

high rev/hl

Lack of scale, lowrev/hl or both

Source: Oliver Johannes Ebneth, “Internationalisierung Und Unternehmenserfolg Börsennotierter Braukonzerne,” Göttingen, May 2006, p. 126.

29


Exhibit 18

Profitability and Concentration in Different Countries

0 %

5 %

10 %

15 %

20 %

25 %

30 %

0 2000 4000 6000 8000 10000

China

Germany

Russia Czech Republic

UK

Italy

Poland

Japan

France

Netherlands

Belgium

Canada

Brazil

Australia

Ireland

MexicoSouthKorea

SouthAfrica

R2

HHI

EBIT

A M

argi

n

0 %

5 %

10 %

15 %

20 %

25 %

30 %

0 2000 4000 6000 8000 10000

China

Germany

Russia Czech Republic

UK

Italy

Poland

Japan

France

Netherlands

Belgium

Canada

Brazil

Australia

Ireland

MexicoSouthKorea

SouthAfrica

R2

HHI

EBIT

A M

argi

n

Explanation: The Herfindahl index (HHI) is widely used to measure the degree of industry concentration and is calculated by summing the squares of the market shares of all firms in an industry. The Herfindahl index is higher if a few key players have high market shares than if market shares are spread more evenly across a larger number of firms. Thus, three companies splitting 100% of a market evenly implies a Herfindahl index of 3,333, whereas ten companies splitting 100% of a market evenly implies an index of 1,000. The maximum value of the Herfindahl index - in the case of monopoly - is 10,000.

Source: Oliver Johannes Ebneth, “Internationalisierung Und Unternehmenserfolg Börsennotierter Braukonzerne,” Göttingen, May 2006, p. 42.

30


Appendix A

Information on SABMiller

1. Strategic Priorities

Strategic Priority Explanation TargetsCreating a balanced and Our geographical spread of operations enables 10% 11%attractive global spread us to capture growth in beer volumes in the organic volume group revenueof businesses developing markets, and value growth as growth growth

consumers around the world trade upwards (organicfrom economy to mainstream and from constant currency)mainstream to premium brands

Developing strong, Our aim is to develop an attractive brand portfolio 47% 15%relevant brand portfolios that meets consumers’ needs in each of our international growthin the local market markets. In many markets, because the growth growth of in premium

is fastest at the top end, we’ve been focusing Peroni volumetherefore on our international premium brands, Nastro Azzurro in Europesuch as Peroni Nastro Azzurro and regional brands such as Kozel in Europe.

Constantly raising Good operational performance has always been 12% 20 basis pointsthe performance of a SABMiller strength. While operational standards EBITA growth increaselocal businesses are already high we are continually pushing them (organic ingroup

higher as evidenced by growing EBITA and constant currency) EBITA marginhigher margins.

Leveraging our We are leveraging our global scale to grow the 18% 17%global scale business. Our business platform enables us, for revenue improvement in

example, to distribute our international premium CAGR for overall equipmentbrands and build our regional brands. In addition the last effectivenesswe are using our scale to transfer skills, methods three years at Miller overand technologies around the group, improving the last 4 yearsour operational performance and efficiency.


consumers around the world trade upwards (organicfrom economy to mainstream and from constant currency)mainstream to premium brands.








consumers around the world trade upwards (organicfrom economy to mainstream and from constant currency)mainstream to premium brands








consumers around the world trade upwards (organicfrom economy to mainstream and from constant currency)mainstream to premium brands.







Source: SABMiller plc Annual Report 2007, March 31, 2007, p. 8.

2. Geographic Split of SABMiller’s Business (in percentages)

Revenues Revenues EBITA EBITA 2007 2006 2007 2006

Latin America 23.5 14.1 25.5 14.8Europe 21.9 21.3 20.4 19.3North America 26.2 32.1 10.4 15.4Africa and Asia 7.8 7.9 13.0 14.3South Africa 20.6 24.7 33.5 39.0Corporate 0.0 0.0 -2.8 -2.9Group 100.0 100.0 100.0 100.0

Revenues Revenues EBITA EBITA 2007 2006 2007 2006

Latin America 23.5 14.1 25.5 14.8Europe 21.9 21.3 20.4 19.3North America 26.2 32.1 10.4 15.4Africa and Asia 7.8 7.9 13.0 14.3South Africa 20.6 24.7 33.5 39.0Corporate 0.0 0.0 -2.8 -2.9Group 100.0 100.0 100.0 100.0

Source: SABMiller plc Annual Report 2007, March 31, 2007, pp. 75-76.

31


Appendix A (continued)

3. SABMiller’s Notable Brands Pilsner Urquell (Country of Origin: Czech Republic)

Pilsner Urquell litreally means "Pilsner from the original source". It is famous throughout the world for its unique flavor and superior quality. It owes its exceptional qualities to the original production process, finest ingredients and the experience of Czech brewers passed on from generation to generation for over 160 years.

Peroni Nastro Azzurro (Country of Origin: Italy)

Peroni Nastro Azzurro is an intensely crisp and refreshing lager, with an unmistakable touch of Italian style, brewed in Italy to the original recipe, since 1963. This premium beer is 5.1% alcohol by volume and expertly brewed using the finest variety of spring planted barley and the highest quality maize, malts and hops. Its unique taste is refreshing and dry, with a clear-cut, clean character and clarity, achieved through the exclusive brewing process. This ensures that the beer has both a fresh and natural quality.

Miller Genuine Draft (Country of Origin: South Africa)

Miller Genuine Draft is the authentic international cold filtered bottled draft beer. Its cold filtering brewing process removes impurities in the beer and enhances its drinkability.

Miller Lite (Country of Origin: US)

Introduced in America in 1975, Miller Lite created the beer industry's low-calorie segment. Miller Lite is specially brewed from the finest malted barley, select cereal grains and choicest hops for superior taste in a less-filling beer. It contains 96 calories per 12 oz. serving. Miller Lite won gold medals in the American-Style Light Lager category at the 1996, 1998, 2002 World Beer Cup competitions.

Castle Lager (Country of Origin: South Africa)

It is a standard-strength lager with a special taste, somewhat dry, somewhat bitter, never sweet taste.

Snow Beer (Country of Origin: China)

The brand is positioned for the premium sector of the market and will be packaged in green non-returnable bottles. The beer itself is bright, almost transparent in nature, with a tight, pure white foam that clings to the glass right to the last drop. The aromatic characteristics of the brand are imparted using only pure imported Satz hops from the Czech Republic. This full-bodied beer is balanced by a high carbonation level and gentle bitterness.”

32


Source: Taken directly from SABMiller’s Website, http://www.sabmiller.com/sabmiller.com/en_gb/Our+brands/Brand+information/International+brands/. Accessed December 2, 2007.

33

http://www.sabmiller.com/sabmiller.com/en_gb/Our+brands/Brand+information/International+brands/