Beverages

Viewsroom: Vices and more

9 Apr 2020

Breakingviews columnists in Ireland, New York and Lantau check in with Editor Rob Cox to discuss Jamie Dimon’s annual letter and coming earnings onslaught, fraud at Luckin Coffee and, everybody’s favorite coronavirus obsession: a boom in sales of porn, weed, booze and junk food.

Corona Capital: Expressive earnings

9 Apr 2020

Concise views on the pandemic’s corporate and financial fallout: The U.S securities regulator encourages companies to ditch the boilerplates, ahead of what’s likely to be an unusual earnings season.

Luckin spills hot bezzle over credulous investors

2 Apr 2020

Fraud expands with good times and emerges in bad. A U.S.-listed Chinese coffee-shop disruptor once worth $13 bln just said much of its revenue last year may be fictitious. In this case, it didn’t take a downturn, just auditors doing their job. Just wait until the tide goes out.

Corona Capital: Ackman’s hedge, Oil stockpiles

26 Mar 2020

Concise views on the pandemic’s corporate and financial fallout, including investor Bill Ackman’s surprise reversal of fortune, and the U.S. shale oil bailout that wasn’t.

Consumer giants take rosy view of epidemic damage

26 Feb 2020

Spirits maker Diageo reckons the coronavirus outbreak could cost it 325 million pounds in sales this year, while Danone is forecasting a 100 million euro hit. But neither is factoring in the effect of the disease spreading much beyond Asia. Investors are already more bearish.

Campari serves up flat dealmaking cocktail

19 Feb 2020

The $11 bln Aperol maker is adopting a Dutch loyalty share plan to give the Garavoglia family more clout. They could pursue bigger targets without losing control. Yet competition for good brands will be fierce, and the risk is that the governance changes deter potential partners.

Nestlé revamp might require looser purse strings

13 Feb 2020

The Aero maker’s organic sales rose a decent 3.5% in 2019 as rivals struggle for growth. The next step could be acquisitions. CEO Mark Schneider has raised $15 bln selling units since 2018 and could dip into $20 bln of planned buybacks. Finding a bargain may be tricky, though.

Incoming Heineken boss has a tricky first few sips

12 Feb 2020

Jean-Francois van Boxmeer is leaving the world’s second biggest brewer after 15 years as CEO. His legacy is a firm adept at selling pricier beers in fast growth markets like Vietnam and Mexico. With both troubled, new boss Dolf van den Brink’s issue now is whether to change tack.

Carlsberg premium rating’s days are numbered

4 Feb 2020

The Danish brewer’s Chinese exposure means investors value it more highly than peers. But with the coronavirus shutting nightclubs and half of restaurants in the $22 bln group’s biggest market, that will change. Boss Cees ‘t Hart needs a plan B.

Private equity can sweeten Unilever’s tea business

30 Jan 2020

The consumer giant is weighing a full or partial sale of slow-growing brands such as Lipton and PG Tips, which represent 6% of sales. Paying down debt is not a priority. CEO Alan Jope may be better off teaming up with a buyout fund, as Nestlé did with its ice cream joint venture.

Remy Cointreau’s woes are weighty but temporary

24 Jan 2020

The spirits maker is relatively more exposed to Hong Kong and China, so protests hit sales harder. The coronavirus and U.S. trade war fallout add extra pressure. But with demand for pricey cognac on the up, Remy still deserves a premium to Diageo and Pernod Ricard.

AB InBev’s Oz M&A party leaves antitrust headache

12 Dec 2019

The world’s biggest brewer’s $11 bln sale of its Australian unit to Asahi has been challenged by the country’s watchdog. Its tough stance on beer and cider competition may hurt boss Carlos Brito’s plan to cut debt. The Corona-maker has other options, albeit less appetising ones.

ThaiBev is tempting Budweiser with a Saigon brew

3 Dec 2019

Tycoon Charoen Sirivadhanabhakdi may spin beer assets out of his Singapore-listed group, including an attractive Vietnamese pint. An IPO, at a mooted $10 bln valuation, could unlock value. The real prize will be a synergy-creating deal with AB InBev's newly hived off Asian arm.

Packaging sale can cure AB InBev’s hangover faster

28 Nov 2019

The $133 billion brewer’s U.S. bottle and can production unit is worth up to $6 bln. A sale of even a minority stake can bring net debt below 2 times EBITDA a year earlier in 2022. Soothing investor fears over indebtedness is worth having to rely on another company for vessels.

AB InBev gets dragged back into M&A dilemma

25 Oct 2019

The Budweiser maker said profit in the third quarter was stagnant, and volumes declined in China. That puts pressure on boss Carlos Brito to do more deals. Yet the world’s top brewer is still working off a debt hangover, and the weak performance makes dealmaking harder.

Nestlé shrugs off eco worries with water refresh

17 Oct 2019

The $316 bln consumer giant wants to revive a tepid growth in a business dogged by environmental concerns. Splitting the division into three locally-managed units may help the Perrier maker push new products. But any dilution of financial reporting would also mean less scrutiny.

Trump’s booze tariffs may cause extended hangover

3 Oct 2019

Washington slapped levies on $7.5 bln of European imports including Scottish whisky and French wine in return for aircraft subsidies. That’s weaker than feared: Less than 5% of Diageo’s sales are affected, Jefferies reckons. But trade tensions could prompt more trips to the bar.

New Molson Coors boss mounts Big Beer’s laggard

26 Sep 2019

The $12 bln brewer’s valuation trails industry peers. A renewed emphasis on marketing might make the difference but could mean less cash for controlling family shareholders. Incoming CEO Gavin Hattersley’s prior record, though, may leave a thirst for higher returns unquenched.

Hong Kong’s IPO debutants rely on helping hands

24 Sep 2019

AB InBev raised $5 bln through a relaunched float of its Asia unit, but only after pre-selling stock and pricing it low. There’s appetite for listings in the city despite ongoing protests, but at a discount and with cornerstone support. Followers may need to take the same tack.

Pernod Ricard has watered down Elliott’s punch

29 Aug 2019

The Absolut vodka maker has been in the activist’s sights for insipid growth and weak operating margins. It’s now beating new improved targets in both, as well as starting to address its governance issues. That may be enough for Elliott to divert its heat elsewhere.