News Briefs: Kirin, Carlsberg and Frappucinos

By Neil Merrett

- Last updated on GMT

Related tags Carlsberg Starbucks Coffee

In this week's round-up Kirin looks to increase pricing for its
beers; Scottish & Newcastle take their battle with Carlsberg to
the courts; and China welcomes the Frappuccino.

Kirin considers price hikes Japanese brewer Krin beer could be forced to turn its back on a 17-year-long policy on the back of increasing commodity and production costs, press reports say.

The company suggested it was looking to raise the price for its beer brands for the first time since the early 1990's, to better accommodate the cost of aluminium prices, according to the Reuters news agency.

The claims come as an increasing number of global brewers are looking to adapt their operations to remain competitive, even in high-growth markets for the product like Asia.

Brewer battle takes to the courts The tit-for-tat takeover battle between Scottish & Newcastle and a consortium made up of rivals Carlsberg and Heineken, is now heading for the courts.

S&N announced Wednesday that it was now going ahead with legal action over claims that Carlsberg allegedly has broken an agreement related to their Eastern Europe-based joint venture, Baltic Beverages Holding (BBH).

However, Carlsberg responded to the action by repeating a previous opinion from its own legal team that it had not violated any agreements over the joint venture.

The latest claims highlight the increasingly messy battle between the companies, with S&N possibly looking for a new partner of its own.

The company is considering teaming up with another brewer to buy Carlsberg's stake in Baltic Beverages Holding, the Financial Times reported yesterday.

The takeover bid has left one of the fastest growing Eastern European brewers up for grabs, highlighting the possible difficulties in operating a company with an industry rival.

An S&N spokesperson previously told that the company does not comment on what she said were "rumours".

"All options are open to us," she said.

S&N and Carlsberg jointly own Baltic Beverages, which has turned into a lucrative money spinner as the Eastern European market explodes into growth.

The Financial Times suggests SABMiller or Anheuser-Busch could be possible partners for S&N's defence strategy.

Last week S&N rejected Carlsberg and Heineken's offer of 720p a share and said it was considering legal action against Carlsberg for allegedly breaching a shareholder agreement in Baltic Beverages Holding.

The offer would have valued S&N and its stake in Baltic Beverages at £6.8bn (€9.7bn).

S&N alleges that under Baltic Beverages' terms any party in breach of the agreement is then forced to offer its shares in the venture to the partner.

The UK-based company claims the agreement over BBH was broken last week when Carlsberg indicated it was in talks with Heineken to take over S&N.

In a statement Carlsberg has curtly responded to S&N's claims by claiming they had "no merit".

Carlsberg and S&N have been partners in BBH since 2002, driving the company to become one of the major players in the burgeoning beer markets of countries like Russia.

S&N's fight back follows Carlsberg and Heineken's announcement last week that they had entered into discussions over forming a consortium to purchase the brewer.

In a joint statement, the potential buyers said that should a deal go ahead, they would look to split the group's regional operations between themselves.

Through this plan, Heineken would therefore control S&N's Western European operations, including the UK market, while Carlsberg would claim full ownership of the Baltic Beverages Holding (BBH) division, which operates in Eastern Europe.

During the first quarter of the year, BBH posted a 37.1 per cent increase in net sales to €1.3bn during the first half of the current fiscal year, resulting from its continued expansion into the region.

Outside of BBH, S&N distributes and manufactures a number of leading beer and cider brands including Foster's, Kronenbourg 1664, Strongbow and John Smith's.

Starbucks targets China with Frappuccino Coffee retailer Starbucks has today expanded its presence in the ready-to-drink beverage market by launching its bottled Frappuccino iced coffee-based beverage in China.

The group said that it was extending its cooperation with PepsiCo in order to distribute the cold beverage, already sold in markets like the US, to tap demand for the product in emerging markets like Asia.

Company chairman Howard Schultz said that in event that Chinese consumer were unable to find one of the corporations retail outfits, they could still find the companies beverages in stores across the country.

"Now the delicious taste of Starbucks coffee is available both inside and outside of our retail stores," he stated.

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