Sources inform “Globes” that Central Bottling Co. (Coca-Cola Israel) is negotiating to merge Carlsberg Israel(Israel Beer Breweries), which it controls, with Carmel-Mizrahi. The plan is to create a joint company in which each party will own 50%.
To carry out the merger, Carmel-Mizrahi will have to be converted from an agricultural cooperative to a limited company and settle each member’s share in the limited company. Carmel-Mizrahi is owned by independent vintners (75%) and the Jewish Agency (25%).
Coca Cola Israel declined to comment on the report. The company said it plans to enter the wine market as part of its total beverage strategy to have a presence is every drink sector.
Carmel-Mizrahi general manager David Ziv declined to comment to the report. He said, “Carmel-Mizrahi has been busy in recent months in building its business strategy, including entering complementary sectors.”
Coca Cola Israel founded an alcoholic beverage subsidiary, UDV, in 2002, based on Guinness international brands. UDV distributes its beverages through the Golan Heights Winery.
Coca Israel is preparing for the entry of one or more food companies into the drinks sector, which it dominates. Such an entry would change the rules of the game in the sector. The first signs of a future entry were seen in 2002. Tnuva was in protracted negotiations to acquire Ganir, which produces Primor juices, before Strauss bought 20% of the company at a $15 million company value.
Israel’s beer market has been suffering from very slow growth since 1997, and was further affected by the dearth of tourists in the past year.
Industry sources estimate that Carlsberg Israel, with three brands (Carlsberg, Tuborg and Guinness), has 31% of Israel’s beer market, estimated at NIS 350 million a year. Tempo Beer Industries has a 69% market share, with the Heineken, Maccabee and Goldstar brands.
Published by Globes [online] - www.globes.co.il - on January 2, 2003