Recession Blues: Widmer Down, Others Up
Less than six months after Woodinville, Wash.-based Redhook Ale Brewery Inc.’s merger with Portland’s Widmer Brothers Brewing Co., the new company has written down the value of the Widmer brand by more than a third.
Last week, the company that resulted from the merger, Portland-based Craft Brewers Alliance, released its 2008 annual report. For the year, the company lost $33.3 million on $86 million in revenue.
The loss included a $30.6 million impairment for Widmer assets acquired in the merger. Of the $30.6 million, $6.5 million is a write-down of the value of the Widmer brand, which the company valued at $16.3 million when the merger closed July 1.
The swiftness with which Craft Brewers restated the value of Widmer surprised analysts.
December and January shipments for all Oregon craft brewers fell by 5 percent and 7 percent, respectively. But in January and February, shipments for all beer in Oregon actually rose by 10 and 20 percent, respectively. “It would appear trading down from higher-priced, locally-made beer has already begun in earnest,” said Brian Butenschoen, executive director of the Oregon Brewers Guild.I guess it's not surprising that a recession would produce winners and losers. Let's just hope there are no real "losers" and that everyone makes it through in the end.