The French Licorne Group and its Brasserie Licorne remains part of the privately-owned German Karlsberg Group and will not be sold as originally planned, according to an interview by Karlsberg’s CEO Christian Weber withSaarbrücker Zeitung.
In March last year, shortly before the wave of the Corona virus swept over Europe, Karlsberg announced to sell its business in France to French investor UI Gestion and some of its local management under the lead of managing director Dominique Baudendistel. (inside.beer, 6.3.2020).
However, in light of the impending COVID-19 pandemic, the seller pulled the rip cord in the proverbial last minute and negotiations concerning the sale of the 900.000 hl brewery and two minor companies in France were suspended. (inside.beer, 26.3.2020)
Karlsberg CEO Christian Weber told now the local newspaper that this limbo regarding a sale of the business harmed motivation and could no longer be endured by employees. “For the next few years, the topic is off the table,” he said.
The German Karlsberg, Group - not to be confounded with the Danish Carlsberg Group – comprises three main areas of business.
The first is the German brewing business in Homburg, Saar, with an annual production of about 1.6 to 1.7 million hectoliters of beer (brand Karlsberg) and beer mixes (brand name Karlsberg, Mixery, Bundberg). The core business had sales of EUR 113 million (USD 135m) in 2020 and EUR 126m (USD 151m) in 2019.
The second pillar is the Überkingen-Teinach-Group, with mineral fountains in Bad Teinach (brands Teinacher, Hirschquelle Vital and Cilly) and Kißlegg (brands Krumbach and Kißlegger Alpenquelle) and fruit juice production in Lauterecken and Merzig (brands Niehoffs Vaihinger, Klindworth, Merziger and Lindavia). This part of the business had sales of EUR 150 million (USD 180m) in 2019 and an EBITDA of EUR 26 million (USD 31m).
The third and last pillar is the French Licorne Groupe which comprises of Brasserie Licorne, Karlsbräu CHR and Saverne Transport with a production capacity of 900,000 hl and pre COVID sales of about EUR 100 million (USD 120m) in 2019. About 260 people are employed here.
Main beer brand of the French subsidiary is Licorne which is mainly sold in the surrounding Alsace-Lorraine region. However, about 60-70% of the volume produced in Saverne is still produced under contract for outside customers. Karlsberg tried in the past to reduce this number as those contracts does not have a high margin and run only for a limited time which makes this part of the business highly volatile.
In the last years Karlsberg was successful not only in Germany but also In France to increase business with high margin brands and to reduce private label business. It can be assumed that the high proportion of the private label business in Brasserie Licorne was the reason for Karlsberg’s intention to sell the business.
After this has failed, Karlsberg tries now to further pursue the way to increase the profitable business with its own branded beers and with contract brew of specialty beers which have a higher margin than standard lager beers. Mr Weber believes the brewery to be on the right track because, the Licorne brand enjoys good acceptance in its home region with a strong growth.
For him it is important that the French business retains as much autonomy as possible with its own management on site. It is also important that the business is self-financed and not subsidized from Germany. However, this has not been a problem in the past as “it is a profitable business" according to Mr. Weber. Even last year, which was a challenge due to the pandemic, the company recorded a profit.