Battle of the Beer Towns

Will it be Denver or Milwaukee for headquarters of MillerCoors?

If all goes as planned, Miller will merge its operations with Golden, Colo.-based Coors Brewing Co. in 2008. But the companies have not yet decided whether the headquarters of the MillerCoors joint venture will be in Milwaukee, or in the Denver area.

“I didn’t get the sense that it’s winner-take-all,” said Milwaukee Mayor Tom Barrett, who last week joined Gov. Jim Doyle in meeting with Coors executives to begin discussing how corporate functions might be split between the cities.

Executives from Miller and Coors are saying little about that process. They’re still crafting a definitive joint venture agreement, and are seeking approval from federal antitrust regulators.

Site selection consultants say most company executives typically look at similar factors when making relocation decisions. Not surprisingly, they focus on the costs of doing business. Those include differences between locations on taxes and employee costs, said Ron Pollina, who operates Pollina Corporate Real Estate Inc., of Park Ridge, Ill.

Executives at Miller and Coors also will likely consider so-called “quality of life” factors. Those include crime rates, school performance and housing costs.

Finally, there are intangibles, including the question of which company is the buyer and which is the seller. The buyer usually has more to say on relocation decisions, Pollina said.

People shouldn’t expect any one factor to influence the decision on where to locate a headquarters for MillerCoors, says site selection consultant Leslie Rubin, who operates Indianapolis-based Rubin Advisors Inc.

“There are so many pieces that come into play,” Rubin says.

Comments

  1. jarviw says

    By Mike Hughlett | Tribune reporter
    February 14, 2008

    Chicago would be a leading candidate for the headquarters of a joint venture between the Miller and Coors beer brands, say sources and analysts, though a decision appears far from being made.

    Molson Coors Brewing Co. and SABMiller PLC in October unveiled a joint venture for their U.S. operations, a bid to better challenge beer industry titan Anheuser-Busch. Miller is the No. 2 U.S. brewer, Coors No. 3.

    Molson Coors is based in Denver, while London-based SABMiller has its U.S. headquarters in Milwaukee. The Rocky Mountain News, quoting a top Molson Coors executive, reported Wednesday that the joint venture wouldn’t likely be based in Denver or Milwaukee.

    Two sources close to the matter told the Tribune that Chicago would be a prime choice for the headquarters.

    “I’ve always heard that Chicago was being considered as the leading contender,” one source said. “But it’s still way too early to tell. There will be a committee put together to review the location, and that committee hasn’t even been put together yet.”

    Kabira Hatland, a spokeswoman for Molson Coors, said the joint venture has yet to decide which corporate functions would be located at headquarters and that a review of possible sites won’t begin until the joint venture is approved by the U.S. Department of Justice. That action isn’t expected until midyear.

    Molson Coors Vice Chairman Peter Coors told the Rocky Mountain News, “My hope is we’ll have a very small headquarters.” He said he expected the joint venture would continue to have a “huge presence” in Colorado and Milwaukee.

    Coors told the Rocky Mountain News that “a neutral site” would be important. “If you pick one city over another, people in the other city will say, ‘They’re running the deal.'”

    Carlos Laboy and Anthony Bucalo, Credit Suisse stock analysts, said in a November research note that they “suspect that Chicago will be a leading candidate” for the joint venture’s home base.

    They noted the city’s proximity to Miller’s Milwaukee operations and its status as a major airline hub and “a magnet for international talent.”

    Chicago is also a hub for beer marketing. DraftFCB in Chicago is Coors’ lead ad agency. Starcom in Chicago is Miller’s media buyer, while Y&R’s Chicago office handles the Miller Genuine Draft account.

    Also, Chicago is home to Crown Imports, the country’s largest beer importer, which counts Corona and St. Pauli Girl among its brands. Cramer-Krasselt, Corona’s lead ad agency, is in Chicago.