Markets, Strategies, and Rivalries
New Horizons in International Business series
Edited by Jens Gammelgaard and Christoph Dörrenbächer
Chapter 3: Reaching distant parts? The internationalization of brewing and local organizational embeddedness
The brewing industry has been subject to the forces of internationalization and structural change over the past decade. As Chapter 1 by Pedersen, Madsen and Lund-Thomsen contained in this volume suggests, the industry possessed a highly localized and fragmented character in 2000, with only local market leaders being evident. By 2012, through an aggressive programme of mergers and acquisitions (M & As), the four leading global brewers – namely Heineken, Carlsberg, AB InBev and SABMiller – were present across a number of local markets. Major drivers of the internationalization of the brewing industry have been the momentous geopolitical developments which have rendered China, India, Russia and Central and Eastern Europe ‘open for business’ for producers. Despite recent economic downturns, emerging growth markets have presented tantalizing opportunities for international breweries to tap into a growing taste for beer in those localities and, as Pedersen, Madsen and Lund-Thomsen point out, there has been a rush to be the first-mover in these newly liberalized trade regions. The structural features of the nascent international brewing industry remain under-researched, yet it is clear that they are highly distinctive due to the nature of the product under consideration. Of great significance is the physical heaviness of this ancient alcoholic beverage, which renders its transportation across geographical space both costly and unwieldy. In consequence, a compelling operational logic dictates that beer should be produced close to its potential consumers.
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