Wednesday, 28 April 2010

The Anchor Brewing Sale: implicationsforpunks?

The craft beer world witnessed a changing of the guard yesterday, as US craft legend Fritz Maytag sold his Anchor brewing and distilling businesses to The Griffin Group.

Maytag famously bought the moribund brewery while twiddling his thumbs as a post-graduate student in San Francisco in 1965, learned brewing, improved the quality of his beer and identified a new market for high-quality local beer at a time when brewing in the US was dominated by a handful of giant brewers. According to Maureen Ogle in her "Ambitious Brew", Maytag bought his initial 51% stake in the brewery from two marketing types who couldn't work out how to make money from the business. So perhaps there's some symmetry to his selling out to Griffin, an "alcoholic beverage" consultancy.

It seems the announcement of the deal was mishandled, and Griffin's press release leaked out early Monday afternoon local time, and was picked up by mainstream local media later on Monday. Nobody was in a position to answer any questions until Tuesday (the scheduled announcement day), but the deal was confirmed and principals in a position to respond to questions.

In the footnotes to the deal announcement, was a reference to BrewDog USA LLC. This company was set up to handle the brewer's US business, and is described thus in Griffin's press release from yesterday.
BrewDog PLC is UK’s leading craft beer brewery and Scotland’s largest independent brewery. The Griffin Group acquired a minority stake in BrewDog in 2009 and formed a joint venture, BrewDog USA, to further develop BrewDog’s US presence.

(We'll overlook this "UK's leading craft beer brewery" statement)
BrewDog USA LLC is to be affiliated to the new Anchor Brewers & Distillers LLC, which the new owners have established to manage the Anchor operation.

So far, so good. But what I'm wondering is, does any of this have any implications for those people who invested in the "Equity For Punks" IPO BrewDog issued last autumn? In a blog post on 22 October, James Watt had this to say:
In addition we have set up a US Company (BrewDog USA LLC) to handle sales and marketing in the US. Equity for Punks investors will also own part of this company.

I tried to find out more about US LLC incorporation requirements, and it seems that EFP investors couldn't 'own' BrewDog USA LLC, but instead would be members, since rules allow investors to participate. They would be able to take income from earnings, presumably nett of local taxes.

LLCs can act as standalone entities, enabling businesses to operate in diverse markets and industries without extending liability to non-relevant areas. However, it does seem strange that Griffin would want to pop BrewDog USA LLC under their new Anchor umbrella.

I expect their reasons for this, as well as their plans and vision for the new business, will be shared over time. Opinions around the blogosphere and on boards is split about the future for Anchor, but we'll all have to wait and see. In the meantime, if you bought an EFP share, you might want to ask BrewDog what this means to you.

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