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Redhook Sales Down with CBA

Nov 22, 2006 - Redhook Brewing Company has said in its quarterly filing with the Securities and Exchange Commission that sales through the Craft Brands Alliance group has declined due to "unsuccessful execution".

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Craft Brands Alliance was formed two years ago to sell, market and provide distribution management for Redhook, Widmer Brothers Brewing and Kona Brewing Company.

Craft Brands Alliance has a distribution agreement with Anheuser-Busch, who owns part of each brewery.

Redhook's shipments to the western states covered by the alliance dropped by 9 percent in the third quarter -- including a 12 percent decline in California, a 6 percent decline in Washington, a 25 percent decline in Colorado and a 12 percent decline in Oregon.

In the filing, Redhook claims that "its third quarter sales in CBA territory have declined due to CBA's unsuccessful execution of its sales and marketing strategy for Redhook's core and emerging products. During this same period, CBA has been very successful selling the Widmer and Kona products. The Company enjoys the benefits of those successes through its profit-sharing arrangement with CBA, but believes it is critical for CBA to deliver success with the Redhook products in addition to the others. The Company has communicated this concern to CBA, and is working with CBA management to establish new brand management throughout the portfolio of Redhook products."


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