Peterson says such speculation is premature, but conceded the Budweiser brewer "might think it's smart to buy a strong brand in the craft area and use its incredible distribution and marketing strengths to grow the acquired business." Washington Street owns about 2.5% of Craft. Craft already has a distribution agreement with Anheuser-Busch for which it paid $5.8 million last year, and $3 million in the first half of 2010. Craft said Friday that, as of August 12, Anheuser-Busch agreed to reduce that fee by nearly 30% which will result in additional annual top-line savings of $1.6 million. Craft said it expects to reinvest all of the savings from those fees into the development, marketing and support of its brands.
Big-name brewers like Anheuser-Busch and Molson Coors have lost market share to smaller brewers like those operated by Craft and Boston Beer ( SAM). During 2009, craft beer shipments increased 7.9%, up from the previous annual growth rate of 5.9%, pointing to an accelerating trend. As a percentage of total beer shipped, Craft crept up from 4% to 4.3% in 2009. "There's no doubt the craft beer industry is a growing sector," Rothbort said. Craft, a collection of regional breweries including Redhook, Widmer Brothers, Goose Island and Kona, said Friday it grew second-quarter revenue by 4.5% to $37.2 million, despite flat earnings. Peterson said Craft's EPS of 10 cents per share was negatively affected by a 2 cent per share loss from the disposal of beer that did not pass quality control tests. Craft also spent about 3 cents per share more than Peterson expected on marketing and promotional costs. Excluding those combined 5 cents, earnings would have been 15 cents per share.
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