MillerCoors

On Tuesday, Miller Brewing Company and Coors Brewing Company, the nation's second and third largest brewers, announced their plan to combine operations in an effort to compete against industry giant Anheuser-Busch – this created a lot of buzz around here.

The new company will be known as MillerCoors (a lot of thought and creativity went into that name) and will have responsibility for selling brands including Miller Lite, Miller Genuine Draft, Coors, Coors Light and Molson to name a few.

It seems so long since Milwaukee was the home to four of the world's largest breweries – Schlitz, Blatz, Pabst, and Miller – and the number one beer producing city in the world.

Over the years Milwaukee’s position as the world's leading beer producer declined after the loss of three of those breweries, but its remaining major brewery, Miller Brewing Company, has been key to the success of Milwaukee’s economy (Miller employs over 1,700 of the city’s workers).

Even though Miller isn't the only beer that made Milwaukee famous, having its world headquarters based here makes the nickname "Brew City" appropriate and something that makes many locals proud.

While the joint venture between Miller and Coors will probably be successful, it’s raising the possibility of future job cuts at Miller's Milwaukee headquarters and the realization that this merger could potentially take away Milwaukee’s title as a beer town.

Miller has 800 employees in the corporate offices and 900 brewery workers in Milwaukee. As a result, Miller has long been a Milwaukee household name – and since my dad worked in the offices for nearly 10 years, Miller has a history with the Cinpinski family as well. Therefore, it’s expected that locals would have concerns about this joint venture, especially as Miller contemplates moving its headquarters from our city.

The Miller Brewing roots are so deep in this community that while this change doesn’t affect me directly, I still find it devastating that Milwaukee could potentially lose some brewing industry jobs, as well as, a symbol of our city.

Regardless, a decision hasn't been made yet on where the MillerCoors headquarters will be located once the merger is completed in 2008. But if it ends up in Milwaukee, it would definitely be a boost to our city’s economy.

Given our rich brewing heritage and the fact that when people think beer, they think Milwaukee, our city would be the ideal location for the new MillerCoors headquarters. It makes complete sense. Plus, Miller is everywhere around this city – it’s a huge part of Milwaukee’s economy, history and local pride – and I hope it stays that way. After all, Milwaukee isn’t “Brew City” for nothing!

What do you think about the proposed merger? Is this good for Miller and Milwaukee?

For more information about the merge, click here. And for some answers to your questions, go here.

Comments

[daver]

If Miller pulls their headquarters out of Milwaukee due to this deal they could see a large backlash from the community and hurt sales significantly.

[Eric]

I don't really understand why they wanted to buy coors. Miller beer is O.K. not bad for inexpensive beer really...I don't care much for coors. Maybe they figure it will be really cheap to make coors products...

Miller Recipe :

MGD: proprietary recipe
Miller lite: 1/2 cup MGD 1/2 cup water
New Coors recipe : 1/2 cup miller lite 1/2 cup water
New Coors lite recipe : 1/2 cup new coors 1/2 cup water

[alba]

The current Miller HQ is no longer in Milwaukee anyway, it's in London. But that doesn’t mean it wouldn’t be worse for Milwaukee if the new HQ was moved to Denver or Boulder.

Pete Coors, vice chairman of Molson Coors, will serve as chairman of the new company and Molson Coors Chief Executive Leo Kiely will be the new CEO of the joint venture. That's bad - do you think Pete Coors will want to move to Milwaukee from his rich-ass house in Colorado?

I'm also sure the Coors plant is quite nice and modern, probably more advanced than Miller's plant here.

One thing Milwaukee has going for it is Miller history - that does mean something to Miller and they'll have to really think of things before moving the HQ. No matter what, Miller will still brew here, as they will in their 6 other brewery locations in the US. But Miller Valley and Miller Field may not be the same if the base of operations isn't in Milwaukee.

[Karen]

Hi Daver. I don't think we've met yet.

I agree with your statement. If the headquarters move to another city other than Milwaukee, you can bet that it will have a negative impact here. Not only does Miller provide employment to thousands of citizens, it is part of Milwaukee's history. So if such pride and security is stripped from the city, well, the outcome won't be good. That's for sure.
__________________________

And Eric, very funny...

[Karen]

As always Alba, you're full of useful information! I agree that they will have to think twice, maybe three times, before moving the headquarters to another city simply because we have the history here. It's going to be a tough fight though, especially because our friends at Coors have a little more going for them (rich-ass houses included).

[Lex]

Geez Karen. You obviously don't even know what you're talking about since one of your readers had to explain to you that the Miller headquarters is in London. What other useless information will you provide for us?

[Karen]

I don't really know what to say to that...

[TommyBoy]

After reading some of these comments I thought I should weigh in. Being connected with Miller I can tell you that, yes, Miller's Corporate Headquarters are indeed in Milwaukee, Wisconsin. Miller is a wholly owned subsidary of SABMiller PLC which has its HQ in London. Miller being a separate subsidary does have its own corporate headquarters. For more information go to www.millerbrewing.com where you can find all the informantion your heart desires on its corporate structure.

I think the essence of this original blog is getting lost. Miller has a long history in Milwaukee. Its Corpoarate offices and HQ have always been in Milwaukee. Decisions on how the comapny operates day to day have been made in Milwaukee. The concern I share with the blogger is to what extent may the identity and influence in the community be lost should the corporate offices of MillerCoors be consolidated in Colorado? We won't know the outcome of that decsion for some time to come. Milwaukee loves Miller and Miller loves Milwuakee. We would hate to see that relationship lessened by the merger.

I've spoken with elders who tell me how they felt when Blatz, Schlitz and Pabst left the community. A part of Milwaukee left when those brewers did.

Milwaukee will live on and so will Miller. I for one hope that MillerCoors decides to keep there Corporate Offices and HQ in Milwaukee.

[SuzieQ]

Either way the history will never leave Milwaukee and I think Miller will always be associated with Milwaukee regardless of where the MillerCoors headquarters end up.

[Eric]

So I did a little research...
South African Breweries aquired/merged with miller in 2002 and the company became SABMiller. I guess that is why the technical HQ is in London. All the articles that I've been reading online, however, also refer to the Milwaukee as the site of Miller's headquarters, though. So I wonder if London is the site of SABMiller HQ, the base of operations for everything, and if Milwaukee is the site of Miller HQ, the base of operations for all U.S. related beer business. Either way it was an interesting fact Alba. Cheers.

Lex, the milwaukee journal sentinal refers to Milwaukee as the site of Miller HQ also...

[Karen]

Tommy Boy, thank you for chiming in and sharing your knowledge with the rest of us! I think it cleared up some confusion.

After a (rude) comment last night, I was prompted to look up the history of Miller as well. On Miller’s website I found that “today, Miller's Brewery in Milwaukee (and the historic Miller Valley) is the site of America's oldest major brewery. The current chapter of Miller's history started in July 2002, when South African Breweries purchased Miller Brewing Company, forming one of the largest brewers in the world, called SABMiller PLC, with volume of more than 130 million barrels, operations in 40 countries and hundreds of brands.”

While there certainly is a headquarters in London, it’s that of SABMiller PLC. But Miller is a wholly owned subsidiary of SABMiller PLC and like Tommy Boy said, that means that since Miller is a separate subsidiary it does have its own corporate headquarters, which is in Milwaukee. Miller is its own company that reports up to the parent SABMiller. Essentially SABMiller gives Miller guidelines to work within, and then from the corporate headquarters in Milwaukee, Miller management makes decisions on how the entire company operates day to day.

Lex, I guess I did know what I was talking about after all. And Alba, thanks again for the knowledge you often bestow upon us. It triggered a good debate and urged me to learn more. That's always appreciated.

“Milwaukee loves Miller and Miller loves Milwaukee. We would hate to see that relationship lessened by the merger.” You get it Tommy Boy. :)

[Kelly]

I think the merger overall is probably a good business decision, but like most mergers it comes down to the reality of how it effects the people. In this case the merger doesn't ONLY effect the employees, but a whole city of beer-slinging, gung-ho drinkers.

So my take on it is twisted -
(1) They could move headquarters here, drive up the community and make many beer drinkers dizzy themselves with the prospect of more beer being offered in Milwaukee

(2) They could move headquarters elsewhere and now the same beer drinkers are going to continue drinking, but they'll be joined by the people who lose their jobs due to the merger, because its Milwauke - that's what we do.

I say bring headquarters of the new merger to Milwaukee and we can all play well with others.

[Myrna Jean Castleberry]

Lex, you're an a**hole. If you don't have anything nice to say, shut your piehole.

[Carmi]

Megamergers are never good news for the towns affected by them. The globalized economy dictates that companies must exploit every last opportunity to squeeze out redundancies and costs. That often means job cuts in the name of efficiency.

I've been on the receiving end of buyouts more times than I care to admit, and every time it eroded the company's prominence in the community, the economic traditions of the city, and the job security of the employees.

I learned to cultivate a freelancer's mentality pretty early on. It's served me well.

[Amanda]

Amen to that Myrna! It’s at least nice to see that the majority of people on here can offer thoughtful and intelligent remarks without being an ignorant bully.

And regarding the MillerCoors merger, it will hit home eventually. There will be job cuts in order to cut back on costs (they even said that). That's bad news for our city even if the MillerCoors HQ is located in Milwaukee.

Is there any good to come from this besides more varieties of beer?

[Eric]

We'll be better hydrated...see recipe

[Karen]

For the average Joe consumer? Probably not, well, besides seeing a wider distribution of imports and craft brews like Leine’s, Killian's, Pilsner Urquell, Peroni and Blue Moon, which aren’t circulated as widely as Miller Lite, Coors Light and other mainstream brands. So yes, you will probably end up with more variety like you said (and less guilt for drinking awful tasting beer like Coors). But either way, I think consumers will remain loyal to the brand of beer they prefer, so it won't really matter anyway.

Additionally, executives at SABMiller and Molson Coors believe the new company will be a stronger competitor with Anheuser-Busch and other makers of alcoholic bevs. According to trade publication Beer Marketer's Insights, Anheuser-Busch has a 48% market share and has long been the nation's dominant brewer. But together, Miller and Coors will have annual beer sales of 69 million barrels, roughly 29% of the U.S. market, and revenue of $6.6 billion; plus the both companies expect to save $500 million a year by combining their operations.

Does that answer your question, Amanda?

[alba]

There is still a chance that the merger won't even be approved.

The New York Times has an interesting article about the proposed merger: http://dealbook.blogs.nytimes.com/2007/10/10/beer-and-baby-food-an-antitrust-lesson/

It seems that analysts feel that antitrust regulators will likely approve the merger. But a similar deal seeking to combine the No. 2 and No. 3 players in a consolidated industry — sometimes called a 3-to-2 deal, because it reduces the industry leaders from three to two — was blocked on antitrust grounds a few year ago.

That was Heinz’s attempt to buy the maker of Beech-Nut baby food, a $185 million transaction Heinz ended up abandoning.

Together, Heinz and Beech-Nut would have controlled nearly 33 percent of the retail baby-food market; Gerber, the industry leader, controlled 65 percent. Compare that with the numbers in Tuesday’s proposed deal, in which a combined MillerCoors would have a 29 percent share of the U.S. beer market, and Anheuser-Busch would have 49 percent.