Reuters News Agency reported on Dec. 18 that the Fort Collins-based brewery has engaged a New York advisory company to help it put together a sale package. New Belgium’s management has emphatically denied that the company is actively seeking a buyer, while at the same time saying it has a duty to its shareholders to be constantly on the lookout for profitable ventures, up to and including a sellout. Shortly after the Reuters report appeared, New Belgium board chairman Kim Jordan issued a carefully worded statement saying:
“New Belgium Brewing’s Board of Directors has an obligation to have ongoing dialogue with the capital markets with the goal of making sure that we remain strong as leaders in the craft brewing industry. There is no deal pending at this time.”
Inquiries from local print and broadcast news sources were routed back to Jordan’s statement. There has been no update or elaboration. New Belgium has not denied that it would consider selling if presented with an offer for the right price, which the Reuters report suggested could be in the neighborhood of $1 billion.
Jordan’s comment marks the second time in recent months that New Belgium has denied a for-sale report from Reuters. On August 19 New Belgium’s Internet blog addressed a similar Reuters report that was quoted in the craft beer newsblog Brewhound. New Belgium’s webmaster commented, “According to a recent report from Reuters, which leans on some unnamed sources for its intel, a few notable craft breweries are courting offers for full or partial sale …
“We’re on that list,” the webmaster said. “Why? Because we sold our company…to ourselves, HYPERLINK “http://www.newbelgium.com/Community/Blog/13-01-16/We-are-100-Employee-Owned.aspx” back in the beginning of 2013.” The reference was to New Belgium’s conversion to a totally employee-owned company at that time.
New Belgium’s selection of Asheville as the location for its east coast brewing and shipping operations in 2013 was hailed as a major coup for the city. It was widely reported that the company would be investing more than $175 million in its Asheville operations and would bring some 130 new jobs. New Belgium was seen as the crowning glory of Asheville’s meteoric rise as a craft beer center. The construction of the brewery’s plant on the French Broad River in West Asheville has also served as the impetus for gold rush-style public land grabs and development plans, both public and private.
Thus, New Belgium’s corporate-level stonewalling aside, the Reuters item served as reminder that the only constant in corporate America is change and that a sale of a major company is always a lurking possibility. The report sent shock waves through Asheville’s extensive craft beer community, developmental and political sectors and even city government.
“To me a corporate transfer doesn’t necessarily mean anything about the experience our city will have with this company,” Mayor Esther Manheimer said. “It may just mean a change in ownership. It may not mean a change in the employees or the number of employees they plan to hire or their agreements. It may have no implications in terms of their agreements with the city.”
Manheimer’s extensive use of the conditional tense apparently did little to allay fears and misgivings about the impact the sale of New Belgium to a third-party corporation would have.
Craft beer aficionados expressed dismay at the prospect that the nation’s eighth-largest craft brewery might be absorbed by a behemoth “commercial” brewery, resulting in an abandonment of quality standards. “I personally wouldn’t drink their brand ever again,” one said. “If it got bought out, it would ruin what’s special,” said another.
Former city council candidate Rich Lee expressed his own consternation. “A lot of people in this town have been used, including me, if it’s true.” He remarked on the “Asheville Politics” Facebook page.
Lee, an early and vocal champion of New Belgium, was a principal mover and shaker in the East West Asheville Neighborhood Association and parlayed that position into a seat on New Belgium’s Neighborhood Business Leader Roundtable. His association with New Belgium served as a major credential during his city council try.
“I’m betting they needed an east coast facility to attract top dollar for a buyout,” said John Miall, Jr., another past city council candidate. “Fits my long held notion that they looked all over the eastern seaboard and said, ‘Who can we can find who will bend over backward for us?’ “
“Yeah, that had to be hiding somewhere under the table while negotiations were going down,” page member Robert McAtee posted on “Asheville Politics.”
Originally the City of Asheville put together an incentive package totaling $8.5 million to entice New Belgium into locating its expansion facilities in Asheville. However, ancillary services, especially improvements to Craven Street at New Belgium’s brewing site, eventually nearly doubled that price tag.
During the 2013 election campaign, then-candidate Manheimer stressed that New Belgium would be paying about $250,000 a year in property taxes. However, the city’s covenant with New Belgium indicates the corporation will receive about $364,000 in tax breaks over a period of 13 years, creating a net loss of about $1.48 million over that length of time.
Observers have pointed out that most of the $175-$177 million figure often cited as New Belgium’s stake in its Asheville operation actually represents the company’s expenditure on itself: land acquisition, construction, equipment, payroll and other internal costs associated with setting up shop from the ground up in a new location.
As to jobs, New Belgium reports that it has hired about 40 new workers and expects to hire more in early 2016, when it is scheduled to begin actually producing product. Definitive figures as to how many of those positions were or will be locally recruited are not available.