The Ratings Game: Tilray’s deal with AB InBev makes it a much bigger beer company — but beers with falling sales, analysts say

by | Aug 9, 2023 | Stock Market

Shares of Tilray Brands Inc. rocketed higher on Tuesday after the Canadian cannabis producer announced a deal to buy eight beer and beverage brands from Budweiser parent Anheuser-Busch InBev. The move elicited both praise and concern from Wall Street analysts. The deal, analysts said, will bring in some much-needed cash and expand Tilray’s
distribution network for booze — as well as for weed, whenever cannabis is legalized at the federal level in the U.S. As the company’s latest expansion into alcohol, it will hand Tilray well-known names like Shock Top and Redhook. And it will potentially bring in more money from alcohol sales than what cannabis currently brings in for Tilray.

But one analyst noted that sales of the beverages being bought have been falling since last year amid a broader decline in craft-beer sales volumes, a measure of liquid sold. Craft beer has faced rising competition over the years from nonbeer alternatives. “We would note that craft beer has been in structural decline for the past 2 years as COVID has weighed on the sector due to its weight towards the on premise,” TD Cowen analyst Vivien Azer said. “On premise” refers to alcohol bought at places like bars or restaurants, as opposed to “off-premise” locations like grocery or liquor stores. Bars and restaurants were hit hard by pandemic-related restrictions. “Indeed, craft beer volumes declined 6% in 2021 and 9% in 2022. Specifically, in Nielsen tracked channels, we can see that the purchased portfolio has seen dollar sales declines of 6.4% [year to date] and -8.5% in 2022,” Azer continued. Still, Tilray’s stock was up …

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and -8.5% in 2022,” Azer continued. Still, Tilray’s stock was up …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]

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