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Diageo boss says SABMiller and AB InBev beer deal serious concern to the industry

By John Mulgrew

Published 23/10/2015

Diageo’s Jorge Lopes said losing the Bushmills whiskey brand was a big blow
Diageo’s Jorge Lopes said losing the Bushmills whiskey brand was a big blow

The boss of the Northern Ireland arm of drinks giant Diageo has said the imminent completion of the world's biggest beer deal is of serious concern to the industry as a whole.

But Northern Ireland and the Republic will be "relatively unaffected", Jorge Lopes said.

Mr Lopes, Diageo's Northern Ireland director, raised concerns over a potential monopoly which could be created if a £68bn deal between SABMiller and AB InBev goes ahead.

The firms have "agreed in principle" on the multi-billion pound blockbuster tie-up to create the world's biggest drinks firm.

And speaking to the Belfast Telegraph, Mr Lopes said Diageo losing the Bushmills whiskey brand was a big blow to the company.

"Clearly this wasn't a decision made by Northern Ireland, it was made globally. It really hurt my heart to see the Bushmills brand go," he said.

Diageo, which also owns Guinness, Smirnoff, Harp and Baileys, acquired tequila Don Julio from Casa Cuervo in Mexico in return for the heritage Co Antrim whiskey.

But he said tequila was "such a small part" of the Irish market.

Diageo suffered a sales blip this summer - something it blamed on poor weather - which impacted on beer sales, including Guinness.

"The Guinness brand is very healthy, since I've been in the business, it hasn't been better."

Overall, he said the business was "performing well" in the medium to long-term.

"We had a bit of a dip during the summer, because it was a horrible summer."

And on the potential big deal between SABMiller and AB InBev he said that Diageo may have to team up with other large brewers, and drinks firms, in order to compete.

"In Ireland we are quite insulated. It's going to have a small impact on the short term, but I anticipate, however, in the long term, an impact in the whole industry.

"I think all the players, Carlsberg, Heineken, will perhaps have to make a move, or maybe a private equity company.

"I don't know an industry that doesn't have two major players. You need an Airbus to play against Boeing.

"It's all a matter of perspective. The new company would be 33% in size, next would be Heineken on 9% and Carlsberg on 6%.

"Of course there are concerns".

A merger of the two firms would bring together some of the world's biggest beer brands, including Peroni and Budweiser.

Speaking about the rise of craft beer, Mr Lopes said it was to be "welcomed".

"The interesting beer is something that we welcome. Now brewing is cool," he said.

"We benefit from it as well...I'm particularly pleased in the interest people have."

Its recent beer sales have been buoyed by Hop House 13, one of the most successful products to come out of St James's Gate, aside from the black stuff.

"We have had very successful launches. Hop House 13 is the fastest growing beer in Northern Ireland. It's been an incredible success.

"We intend to continue on the same path that has worked for us, launching brands from our St James's Brewers Project.

"We will surf the wave of interesting beer and be part of that as well."

Drinks giant Diageo is a major international firm which operates in Northern Ireland and throughout the world. It owns and operates big brands including Guinness, and until recently, Bushmills. And earlier this month it got rid of most of its wine business. That means popular tipples including Blossom Hill and Piat d'Or were sold under a $552m deal (£360.5m). Ivan Menezes, chief executive of Diageo, said: "Wine is no longer core to Diageo and this sale gives us greater focus."

Belfast Telegraph

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