William Brand is reporting that Don Barkley will be opening a new brewery in Napa, which will be called Napa Smith Winery & Brewery. Supposedly beer from the new brewery will debut in late March at the Napa Valley Mustard Festival, which suggests things must be pretty far along at the new brewery.

Barkley was the the assistant brewer at New Albion Brewing back in the late 1970s. New Albion was, of course, the first modern microbrewery in America. When they stopped brewing in the early 1980s, Barkley bought the brewing equipment and used it to found Mendocino Brewing.

Don Barkley last summer reminiscing about working at New Albion with Jack McAuliffe, while accepting an award for lifetime achievement on behalf of McAuliffe, who started New Albion Brewery.

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Today, the Wall Street Journal let the cat out of the bag that despite rumors to the contrary, Anheuser-Busch and InBev have indeed met to discuss a possible merger, and that such a merger could conceivably take place this year. In the article, Anheuser-Busch Dances With InBev, states that “InBev and Anheuser already have held discussions, say people in the industry familiar with both brewers’ thinking. Although reports of the talks surfaced as long as a year ago, they have become more serious, and a deal is possible this year, people in the industry say.” They further note that, as became clear last month, much of A-B’s growth in 2007 came from their imports, including those that came from their deal last year with InBev. But some analysts believe shareholders may not be so quick to jump on the bandwagon, because the huge cost of such a merger would dampen a big rise in the share price, perhaps netting no more than a 10% bump initially. But worldwide, there’s very little market overlap between the two, which from an operations stand point makes the two a good fit. Although the Journal also notes — as have other insiders — A-B has every incentive to delay such a merger for as long as possible in the hopes of resuscitating sales of their flagship brands. This would raise A-B’s stock price, possibly dramatically. Need another reason to wait? A-B currently owns 50% of Grupo Modelo, the makers of Corona, but they have no control. That may change, however, as some believe an opportunity is coming whereby A-B could buy a controlling interest in the maker of America’s most popular import brand.

Based on that information, Bloomberg News this morning promptly reported that InBev’s stock shot up in their native Brussels as did A-B’s stock price here, as well. Both InBev and A-B have declined to comment.

From Bloomberg News:

A merger of the two biggest beermakers by sales would make sense because they dominate different parts of the world, analysts say. It also would help them to stay in the lead as SABMiller Plc and Molson Coors Brewing Co. combine their U.S. units to compete more effectively in the country and Carlsberg A/S steps up its growth by taking over Scottish & Newcastle Plc with Heineken NV.

“From a strategic and geographical point of view, it would be a good move,” Wim Hoste, an analyst at KBC Securities in Brussels, said by telephone. “They have hardly any geographical overlaps, and merger news might be contagious.”

I can’t say I’m surprised as this has been fodder for the rumor mill for well over a year now. At this point I think I’d more shocked if it didn’t happen eventually, but now sooner seems more likely than later.

One bit of levity in all this. DealBreaker.com, which bills itself as “a Wall Street Tabloid,” in a piece entitled One Brewer To Rule Them All, suggests a new name for the merged behemoth: InBusch.
 

 

I heard a rumor today from a fairly reliable source that Coast Range Brewing in Gilroy, California has closed their doors for good. My understanding is that they’re a Chapter 11 Reorganization Bankruptcy and are actively looking for a buyer.

I’m sorry to say that’s it’s not a huge surprise as they’ve been having financial difficulties … well, for a very long time now. For several years at least they’ve managed to stay afloat due mainly to doing contract beers for a variety of clients, having picked up quite a lot of new business when Golden Pacific Brewing was sold to Gambrinus a few years back. Before that they picked up a tidy sum from a French brewery by selling them the U.S. rights to the name Desperado, which had been the name of their Pale Ale, so that the tequila flavored French Desperado beer could try to take over the American beer market during those thirty seconds when tequila flavored beers were the “in” thing — A-B’s Tequiza, which they still make, managed to own the category.

Coast Range’s passing, though, is quite a shame as I thought brewer Peter Licht was quite talented. Back when fruit beers were more popular, he made a Blackberry Wheat that I thoroughly enjoyed. And he did several fine contract brews for me when I was the beer buyer at BevMo, too. The only reason they never seemed to reach very far beyond their own backyard had more to do with distributor networks, retailers and some poor management decisions than bad product. I will mourn their passing tonight with one of their Farmhouse beers, a new label they debuted two years ago.

The Prague Daily Monitor reported today that the Czech Republic government has changed its mind for the time being about privatizing Budejovicky Budvar brewery. Prime Minister Mirek Topolanek was quoted as saying there’s “no privatization,” adding that it would take at least 12-18 more months before Budvar would become a joint-stock company. He also laid to rest rumors that Marek Dalik, Topolanek’s advisor, was in negotiations with Anheuser-Busch to purchase the Czech brewery, as had been widely reported in the business press.

No, you read that right. In April it was announced that the Czech Republic, who owns and operates Budejovicky Budvar — from the Bohemian town of Budweis — was considering selling it to the highest bidder to help with the country’s budget woes. Naturally they used the gentler word privatize, but the result is the same. Forbes is reporting that Anheuser-Busch has been in negotiations for some time now.

A-B and Budvar have been bickering over the Budweiser trademark for over a century, though recently A-B agreed to distribute Czechvar (Budvar’s trade name in the U.S.) in the American market. Buying the Czech brewery would make good sense from a business point of view, because the still numerous pending trademark disputes would simply vanish, saving untold millions in legal fees. Plus A-B would be able to market its own Budweiser uniformly throughout the world. Currently there are a number of nations where Budvar has prevailed in litigation and the American Budweiser must be sold in those countries under a different name. Buying the brewery then seems like it would be worth its weight in gold. Of course, the Czech government is apparently not one to let an opportunity pass it by and is exploiting the situation. They’re asking $1.5 billion, even though that’s twelve times its annual sales of just over $125 million. Most valuations use a formula of around 2.5 times annual sales, making a pricetag of $300 million or so a bit more reasonable, at least to prospective buyers.

A-B began selling beer under the name Budweiser (admittedly taking the name from the Bohemian town of Budweis) in 1876 (registering the trademark in 1878), whereas the present brewer, Budejovicky Budvar, didn’t begin brewing until 1895. But as the Czechs are quick to point out, beer was being brewed in the town of Budweis since the 13th century, since 1265 to be exact. And in that time before trademarks and brand names per se, beer brewed in the town was called Budweiser to distinguish it from beer made in other towns, it just wasn’t made by the same company. To a number of people, however, the dispute is about more than just who used the brand name first. To the Czechs it’s understandably a matter of national pride. How do you tell someone they can’t use the name of their own town on their own labels with a company name that also includes the name of the town?
 

 
Well if you’re Anheuser-Busch, you rely on the fact that you’ve spent millions and millions of dollars building a brand name and some upstart company shouldn’t be able to just waltz in and trade on all that hard work. And while I do understand A-B’s position, I’d be more sympathetic to it if this dispute just started recently after they really have created a worldwide brand name over many, many years spending untold dollars to do so. But that’s not exactly what happened. This dispute began early in the 20th century, only ten years or so after the modern Budvar was formed and only 30-odd years after Anheuser began using the Budweiser name. At that time they were certainly a successful company, but nowhere near the international behemoth they are today. Looked at today, it’s much easier to accept A-B’s arguments, but not when the dispute began. The vast majority of the effort and resources that A-B has spent building up the value of the brand name took place after Budvar began complaining that A-B was using their town’s name. I’m not sure that matters from a legal standpoint (though perhaps it should) but it just feels wrong. I know that’s idealistic and isn’t how the world really works, but I’m not convinced that most people want to live in a world where the bully with the most money usually wins. A-B may have even figured out a way to market Budweiser in the Czech Republic, by buying another local brewery, Jihocesky Pivovary, which is currently located in southern Bohemia. But in 1997 they found documents indicating they were the first brewery in Budweis, having been founded in 1795.

But buying Budejovicky Budvar would finally and forever put this dispute to bed. I just don’t know if that’s really the right result. It certainly doesn’t feel like it would end the controversy or really answer the question of who really should be entitled to use the name “Budweiser.”

At the end of March, Heineken appeared to be the leading contender in a takeover bid for Scottish & Newcastle. Now the latest rumors have SABMiller considering their own bid to take over the Scottish beer giant for the sum of £6.5 billion (around 12.75 billion in U.S. dollars). If successful, many believe SABMiller would sell off pieces of S&N, specifically it’s French interests along with Foster’s, John Smith’s bitter and Strongbow cider, to international drinks company Diageo. If true, official details should be released by the end of the week.

According to today’s Scotsman, Heineken is the leading contender in a takeover bid for the world’s tenth largest beer company, Scottish & Newcastle. According to S&N’s website, in Europe they’re the fourth largest brewer in volume terms and the number two in profit terms. I believe Heineken is number one in both.

The article relates some interesting history of breweries in Edinburgh and though it alludes to pictures of these old breweries, does not include them in the online version. Though S&N no longer operates a brewery in Edinburgh, they do still employ around 1,000 people there locally. The Scots, naturally are not thrilled at losing so large a company, but S&N long ago lost sight of any sense of community to the areas where they originated and eventually built their empire so it’s hard to get too worked up about this one.

The old Scottish & Newcastle brewery in Fountainbridge, Edinburgh, taken in 1992. The brewery was closed in 2005. This cool photograph was taken by Peter Stubbs and can be found on EdinPhoto, a website dedicated to photographs of Edinburgh and Scotland.

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The rumor of Anhesuer-Busch in talks with Boston Beer left a foul taste in my mouth, and a few short weeks ago would not have given the idea a moment’s thought. The feud between Jim Koch’s Boston Beer Co. and Augie Busch’s little company is, though considerably shorter than Budvar’s, just as legendary. The production company “Ducks In A Row Entertainment Corporation” is supposedly even making a film about their famous feud with the tentative title “Beer Wars.” Last I heard, it was in the editing stage but that was some time ago. The point is, these are two companies that do not feel a great deal of affection for one another.

So my first reaction to this rumor would under normal circumstances be, “no F’ing way.” But that was before A-B inked deals with both InBev and longtime rival Budvar. With those deals, the Earth is already spinning off its axis, so why not Samuel Adams, too?

This particular rumor comes courtesy of Miller’s Brew Blog, who got it from the only other source to mention it so far, Beer Business Daily, a subscription-based beer news service. BBD reported that they have “been fielding about a half dozen inquiries a day from readers with the latest rumor du jour making the rounds out there: A-B and Boston Beer hooking up.” To no one’s surprise, neither side would comment on the rumors. But that was the same as the InBev rumors, at least, so who knows?

I’ve heard Jim Koch speak personally about his feelings concerning A-B and their business practices and given that, and all of the trouble they’ve tried to cause him over the years, it just seems incredibly unlikely that he’d entertain any offers from them. But at the risk of repeating myself, I keep coming back to how often the seemingly impossible has been happening these days.

Dave Heist, better know in the brewing community as “Crazy Dave,” has been threatening to sell or quit, and hightail it to southern California for at least a couple of years. But he may really be serious this time, because now it’s in print. According to an article sent to me by two Bulletin readers, the Sunday Contra Costa Times is reporting Hoptown will close in two months.

Heist, along with a small group of investors is planning a new venture, in a larger location — possibly near Livermore — that will begin sometime with the year. It will be interesting to see what Crazy Dave does next. His beers are never boring and usually some of the tastiest around.

“Crazy Dave” Heist, owner of HopTown Brewing Co. in Pleasanton, California, along with fellow brewer Melissa Myers, currently at Drake’s Brewing. This was taken at GABF in 2002.

I want to stress that this is only guesswork, but it appears that one of the Native American casinos in Northern California may be building a new casino brewery. My sister-in-law sent me a classified job listing she noticed in the Santa Rosa Press-Democrat. The job listing is for a full time brewmaster with three years experience to handle “all aspects of brewing operations, purchasing, packaging, brewing of main line & specialty beers.” The listing also states that preference will be given to a Native American applicant, which made me curious. The number listed is associated with the Lake Miwok Indian Nation of the Middletown Rancheria. The tribe operates the Twin Pine Casino along Highway 29 in Middletown, California, about 35 miles north of Santa Rosa.

My guess is that the casino is planning a brewery on-site, but this is the first I’ve heard anything. But that seems the most logical reason for the tribe seeking a brewer. I know there are several casino breweries in Las Vegas, but are there any other breweries in Native American casinos? If not, this may be the first. Does anybody else know? The California Nations Indian Gaming Association has a list of all tribal casinos in California.

An alert reader did point out that Mount St. Helena Brewery [no website] is also in Middletown, but if that’s the case why post a fax machine number to a Native American tribe that operates a casino and list a preference for a Native American in the position?

Twin Pine Casino, site of a new brewpub?

UPDATE 1.27: Turns out that the Mount St. Helena Brewery is owned by the Middletown Rancheria of Pomo Indians of California. Here is their ABC License. So my speculation was wrong, after all. Thanks to Vinnie for pointing this out.

The Oregonian is reporting today that merger talks between Portland’s Widmer Bros. Brewing, the largest craft brewer in Oregon, and Seattle’s Redhook Ale Brewery were disclosed on Wednesday through a mandatory regulatory filing by both Redhook and Anheuser-Busch — who owns almost 40% of Widmer and just over one-third of Redhook.

Although Widmer is probably the healthier company, Redhook (because it is traded on NASDAQ) will likely be the buyer in the deal. Rob Widmer reportedly has said that because it involves a public company that much more will be in the open due to regulatory disclosure requirements. He also stated that it is much too early in the negotiations to say when or even if anything will come of the talks.

The Seattle Times also has a more in-depth article on the talks.

I have an article coming out next month in New Brewer magazine about gluten-free beers, so I’ve been watching what’s been going on with this kind of beer for many months. In case you’ve missed this growing phenomenon, celiac disease now effects close to 1% of the U.S. population and people with the disease can’t properly digest glutens, a protein in many common grains, including wheat and barley. This means no bread, pizza, pasta or, most importantly, beer. Here and abroad, there is increasing interest in producing a beer that’s both gluten-free and tastes similar to beer. To date, only a handful of American brewers are making one, with several more in Europe and Australia.

My son, Porter, is autistic and many kids with ASD also have some stomach problems similar to those associated with celiac sufferers. As a result, both are put on gluten-free diets with generally positive effects. Over the past summer, I was talking with Dr. Michael Lewis, who pioneered the brewing sciences program at U.C. Davis, about these beers. He mentioned that Anheuser-Busch was also working on a gluten-free beer and suggested a few people there I should talk to about it. Try as I might, I could not penetrate A-B’s bureaucracy beyond a tersely-worded statement from their P.R. department. They seemed genuinely surprised that I even knew about, despite the fact that Miller’s BrewBlog broke the story in early August that A-B had filed a label registration in Missouri for the beer, called Red Bridge Sorghum Beer, and test batch bottles reportedly had been quietly sampled at MBAA meetings. All Anheuser-Busch was willing to say on the matter was the following:

Our goal at Anheuser-Busch is to make sure every consumer can enjoy the kind of beer they feel best about — it’s that simple. That’s why our brewmasters are continually exploring and brewing a variety of beer styles year round. We are currently brewing a beer made with sorghum and without barley, wheat or oats and we’re still developing the final product.

They were unwilling to provide a sample, show me a label, allow me to speak to the person I knew to be working on it, nada. Needless to say, I wasn’t able to include much in the article. This despite the fact that I had seen and tasted a test bottle, seen a label mock-up, and knew they’d both registered the name and picked up the domain name redbridgebeer.com on July 12. To hear the P.R. flacks tell the tale, it was years away from being on store shelves, if ever.

So it was with a gentle smirk that I received the news today — a rumor at best, from an anonymous source — that A-B would be rolling out Red Bridge Sorghum Beer nationally (not in a test market) on December 18. Is it true? I’ll let you know in just under two months.

This mock-up may or may not be the label for A-B’s new gluten-free beer, Red Bridge.