Interbrew, a giant lurking in the shadows

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The Independent Online

Interbrew is a corporate oddball of the global business scene. Secretive and aggressive, the Belgian company has its roots in the 14th century and remains family-controlled despite a recent stock market float in Europe.

It has expanded rapidly in the past few years, rising from a niche player known chiefly for its Stella Artois brand, to become the world's third-largest brewer. And yet it remains a shadowy figure to those who drink its products.

In the UK for example, Interbrew has acquired the Bass and Whitbread brewing interests but appears to care little for how the public perceives it. In its home market of Belgium, where it is the leading brewer by a mile, it has been fined for abuse of a dominant market position. It is not the behaviour you expect from a consumer industries company where image is usually everything.

The expansion of Interbrew has been astonishing. As recently as the mid-Nineties it was operating in only half-a-dozen countries and was heavily reliant on its Stella brand. Now it is a global powerhouse with beers that include Labatts and Becks.

Its aggressive empire-building included a blunt instrument assault on the UK market where it fell foul of competition rules which prevent companies from achieving market that could affect prices and damage consumer choice.

It bought Whitbread for £400m in May 2000. It was a business Interbrew knew well as Whitbread had been brewing Stella under licence in the UK for years. A month later it made an even more audacious move with the £2.3bn acquisition of Bass Breweries, which brought with it Carling Black Label, Britain's best-selling beer.

But the deal was a fiasco. It would have given Interbrew a 32 per cent share of the UK market and stepped into a regulatory wrangle that cost the company a fortune. The deal was blocked by the competition authorities, then that was overturned. Eventually Interbrew was allowed to keep Bass Brewers, but was forced to sell off Carling, its key asset.

Interbrew was formed in Leuven, Belgium in 1366. In the early 18th century, Sebastian Artois, a master brewer, bought the company that remained in his family for more than 100 years. But the Stella Artois name appeared only in 1926 when the brewery introduced a Christmas beer which used the word Stella, Latin for star. The business is controlled by three Belgian families Interbrew's chief executive is an Englishman, Hugo Powell, a public school boy, who joined in 1995 after Interbrew's takeover of Labatt's, the largest deal in Belgian corporate history. Now 57, Mr Powell was born in India to British parents, educated at Charterhouse school and moved to Canada in 1971.

He is expected to push for further expansion, and the leaked documents on Interbrew's apparent interest in South African Breweries were seen as part of ambition. But SAB's merger with Miller Brewing of the United States may have pushed the company out of Interbrew's reach.