A new beer baron for Molson Coors and its liquid assets

Peter Swinburn, the new chief executive officer of Molson Coors Brewing Co., is the perfect metaphor for the global beer industry: a Welshman running a Colorado-based company with heavy Canadian ownership, which has a U.S. joint venture with SABMiller, of South African roots. And its major global rival is a Brazilian-Belgian entity that is taking over the largest American brewer. Got that? In an interview, Swinburn sorts out the new geography of beer:Question. So why all this upheaval?Swinburn: It's just an extension of what been going on for the past 10 years. There has been consolidation, and we've played in that field really well. The merger that the Molson family did in 2004 with the Coors family has been tremendously successful. If you look at the numbers, we have now improved our shareholder value in the last three years by 90 percent.Q. You expect more consolidation, but will Molson Coors be part of it?Swinburn: That's our intent. To clarify the Miller-Coors joint venture, it's just in America -- nowhere else. As a result of that deal, plus the success of the business over the past three years, we are now in a very good position with cash. So if the right opportunities come up, we would like to take advantage.Q. Where are you looking to buy?Swinburn: We will not be myopic. We will look to where the advantages are. We want depth rather than breadth, so we will look to a position where we would be No. 1 or No. 2 in a market if that came up. We're not interested in just planting the flag for the sake of it.Q. But can you finance a takeover in these times?Swinburn: As you speak right now, the market is very difficult. That situation will change. I couldn't speculate as to when, but the important thing is our balance sheet is extremely strong -- we're throwing off cash. When the markets do loosen up a bit, as a company we would be very, very attractive to anyone who wants to lend money.Q. Is a beer company countercyclical -- a safe place when the economy is tanking?Swinburn: One might question whether we're a safe haven to the full extent, but we are certainly in that league, compared to what is happening elsewhere in the market. If you look at how our stock has performed compared with the overall market, we have done extremely well.Q. What keeps you awake at night?Swinburn: Very little. In running a business, you always want to make sure that someone else isn't doing or thinking something that you haven't thought of yourself, or have done yourself.You've got to keep ahead of the pack. If you look at Molson Coors as a business, there were a lot of questions and remarks about the merger, and we did it. No one expected us to do the Miller-Coors deal and we did it. So we've got quite a history of doing something quite unexpected and then delivering the goods.Q. Wouldn't a full merger with SABMiller create truly global scale?Swinburn: It might. It would be a deal that would create value, but the issue is we're not in that market. We are in the market of making sure we grow our company just as Miller wants to grow its company and so we will be competitors outside the U.S.Q. How can you be competitors when you are joint-venture partners in the U.S.?Swinburn: Simple. The deal in the U.S. made sense for both parents; a deal outside doesn't make sense for both parents.Q. How vulnerable are you to the impending takeover of U.S. giant Anheuser-Busch by InBev, the Brazilian-Belgian brewer?Swinburn: We compete with Anheuser-Busch in the U.S., but nothing really much has changed except the sign on the door. We got ourselves in position beforehand by doing the Miller-Coors deal. That is going to make us significantly more competitive than we were. If you think about the U.S. market, Miller had 18 percent to 20 percent and we had 10 percent and now we have 30 percent. That gives you a lot more clout.Q. What do you drink?Swinburn: I drink beer. If I'm in the U.S., I drink Coors Banquet; in Canada, Molson Canadian or Creemore; or if I am in Britain, I drink Carling or Worthington's.Q. Some might say the growth of Coors Light is a sign of deteriorating beer palates. Swinburn: There is no such thing as bad beer. All beer is good and Coors Light is a great beer. We wouldn't be selling in these volumes worldwide if it wasn't.Q. Beer was once a local industry, but now there are powerful global brands. Will we see a counter-shift back to local roots?Swinburn: No. I think what you will see, initially, is a movement to more international brands. Beer is actually still a local market. The biggest brand in the world (Budweiser) has only 3.5 percent to 4 percent of the global market, although the top 10 are growing and will continue to grow. If you look at total volume, 85 percent of the market is local.The growth of global brands will be a function of consolidation. As people buy other companies around the world, they use those distribution platforms to put their well-known international brands across. That is bound to increase.Q. Was it your dream to have a career in the beer industry?Swinburn: It's the best industry in the world. If you can't have fun selling beer, I always say, you have a gene missing. So having managed to get into the industry, I didn't want to leave.When I first came to the industry, I said to my boss that I was surprised how pleasant everyone was. He looked and me and said, 'For someone who is supposed to be intelligent, you are really stupid. This is a social industry, and if you're going to succeed, you have to be sociable.'X ... X ... XPeter SwinburnTitle: President and CEO, Molson Coors Brewing Co., Denver, Colo.Born: 1953 in Penmaen, near Hirwaun, in Aberdare, Wales Education: BSc, economics, University of Wales Institute of Science and TechnologyCareer highlights:1974: Fresh out of university, joins Welsh Brewers. Rises through ranks to sales director of parent Bass.2002: Bass acquired by Coors.2003: President of Coors Brewing Worldwide.2004: Coors merges with Molson to form Molson Coors.2005: Heads operations in Britain, Europe and Asia.December 2007: CEO of Coors Brewing Co., the U.S. subsidiary.July 1, 2008: CEO of Molson Coors.(Distributed by Scripps Howard News Service, www.scrippsnews.com.)