4 ms·

Not sure I agree with that, but you also have to consider the interest rate environment we are in, along with the potential for an economic slowdown. To buy th

Not sure I agree with that, but you also have to consider the interest rate environment we are in, along with the potential for an economic slowdown. To buy the brewery, they will more than likely be taking on a ton of debt at higher than normal interest rates...this would put them under a lot of pressure from the start...

bsder 3y ago
How about they take on no debt because otherwise Sapporo is going to shut this down and simply take a big loss? When did "market clearing price" quit being a thing? When did we forget that market forces also work downward? This is like the "labor shortage"--there is no "labor shortage". There are simply companies unwilling to pay market rates. The real problem here, however, is political, not economic. If a Sapporo exec signs off on ... say, a $10 million deal ... and suddenly Anchor Steam suddenly starts pulling good profits it will make some Sapporo executives look really bad. And that is really bad for your career.
- JimtheCoder 3y ago
  "How about they take on no debt because otherwise Sapporo is going to shut this down and simply take a big loss?" Yea, taking a big loss will help with their taxes. But they could just give it away...
- bruce511 3y ago
  The debt will be with suppliers. Sapporo will either need to pay that, or Anchor will, if the business carries on. Otherwise suppliers will either choose to not supply, make every deal cash up front, increase prices to absorb past losses or a combination of all 3. This includes production suppliers, but also things like leases, rent etc. By contrast, shuttering it completely, selling off the barrels, makes the balance of the debt just go away. The landlord gets to simply write off owed rent. Obviously prior owners will often take on debt to keep the business afloat. That might be financed debt, or credit lines. Or just non payments (rent etc). Resurrecting the business is hard because those suppliers have to be made whole. That's usually the killer in saving a failing business.

bsder 3y ago

How about they take on no debt because otherwise Sapporo is going to shut this down and simply take a big loss? When did "market clearing price" quit being a thing? When did we forget that market forces also work downward? This is like the "labor shortage"--there is no "labor shortage". There are simply companies unwilling to pay market rates. The real problem here, however, is political, not economic. If a Sapporo exec signs off on ... say, a $10 million deal ... and suddenly Anchor Steam suddenly starts pulling good profits it will make some Sapporo executives look really bad. And that is really bad for your career.

JimtheCoder 3y ago
"How about they take on no debt because otherwise Sapporo is going to shut this down and simply take a big loss?" Yea, taking a big loss will help with their taxes. But they could just give it away...
bruce511 3y ago
The debt will be with suppliers. Sapporo will either need to pay that, or Anchor will, if the business carries on. Otherwise suppliers will either choose to not supply, make every deal cash up front, increase prices to absorb past losses or a combination of all 3. This includes production suppliers, but also things like leases, rent etc. By contrast, shuttering it completely, selling off the barrels, makes the balance of the debt just go away. The landlord gets to simply write off owed rent. Obviously prior owners will often take on debt to keep the business afloat. That might be financed debt, or credit lines. Or just non payments (rent etc). Resurrecting the business is hard because those suppliers have to be made whole. That's usually the killer in saving a failing business.