Monday wasn't a great day for Molson Coors
Back in 2002, the company teamed with Dutch brewer Heineken to acquire Brazil's Cervejarias Kaiser for $765 million. At the time, Kaiser had more than a 17% share of the Brazilian beer market. Since Brazil has a population of about 186 million people, this wasn't a minor opportunity.
Since then, though, Kaiser has been mismanaged down to less than 10% market share. Consequently, when Molson sold its 68% stake to Mexico's FEMSA, it reaped all of $68 million -- some $450 million less than that stake would have been proportionately worth three years ago. With the deal done, Molson Coors will still own about 15% of Kaiser, and Heineken will own 17%.
But wait, there's more.
Apparently, the beer market hasn't gotten much better -- at least for Molson. For the fourth quarter, volume is expected to fall 2%, and sales to retail should drop 1.5% relative to a year ago. While flat sales in the U.S. and Canada aren't good news, it's better than the picture in Europe and Brazil, where sales to retail are expected to decline 3.5% and 7%, respectively.
Simply put, this is a tough time to be a purveyor of mass-market brews in North America. People are drinking more wine (good for Constellation Brands
At least Molson Coors isn't alone. Anheuser-Busch
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).