Welp, Mac Baren almost made it to 200 years of being a family owned company. I suppose it wasn't meant to be.
I have read Mr. Wortzels justifications for decisions that are being made. Some of it absolutely makes sense. I even understand the decision to close the Sutlif facility in the US, though I lament that decision. When nearly all of your business assets and infrastructure is based in Northern Europe, why have a subsidiary 3000 miles away? Especially one that traditionally was very price competitive, and no doubt Sutlif's existence kept some of STGs prices in check. Killing off Sutlif will remove an obstacle to price increases.
After reading Wortzels posts, I fairly evaluated them with a benefit of the doubt toward STG. Then came the official list of what tobaccos will remain from the Mac Baren group. Less than 2 dozen, out of hundreds (and that's severals hundreds) of options. I now believe STG essentially just killed off a major competitor, and the purchase will more than pay for itself in increased market share and acquiring Mac Barens distribution network. I know nothing of how much smaller companies (think C&D and the like) relied on Mac Baren group (and STG) for base tobaccos, but I'm sure that is a real thing. STG can realize value from this purchase just by controlling that.
To the Victor go the spoils, and all that, but there is nothing altruistic about STGs decision for sure. But now I'm no fan of Wortzels "we were the ones that put our money up, and yes we care about pipe smokers because youll have to pry our pipes from our cold dead hands." You can be an avid pipe smoker, but still take a position that harms the pipe smoking community as a whole if pipe tobacco is your business.
At the end of the day, it's business, these things happen, and there's nothing we can do about it. I am reasonably sure there would be a buyer for Sutlif's US assets were STG inclined to offer them up. Here's me not holding my breath, betting they don't, because that would mean another competitor in a lucrative market.
I have read Mr. Wortzels justifications for decisions that are being made. Some of it absolutely makes sense. I even understand the decision to close the Sutlif facility in the US, though I lament that decision. When nearly all of your business assets and infrastructure is based in Northern Europe, why have a subsidiary 3000 miles away? Especially one that traditionally was very price competitive, and no doubt Sutlif's existence kept some of STGs prices in check. Killing off Sutlif will remove an obstacle to price increases.
After reading Wortzels posts, I fairly evaluated them with a benefit of the doubt toward STG. Then came the official list of what tobaccos will remain from the Mac Baren group. Less than 2 dozen, out of hundreds (and that's severals hundreds) of options. I now believe STG essentially just killed off a major competitor, and the purchase will more than pay for itself in increased market share and acquiring Mac Barens distribution network. I know nothing of how much smaller companies (think C&D and the like) relied on Mac Baren group (and STG) for base tobaccos, but I'm sure that is a real thing. STG can realize value from this purchase just by controlling that.
To the Victor go the spoils, and all that, but there is nothing altruistic about STGs decision for sure. But now I'm no fan of Wortzels "we were the ones that put our money up, and yes we care about pipe smokers because youll have to pry our pipes from our cold dead hands." You can be an avid pipe smoker, but still take a position that harms the pipe smoking community as a whole if pipe tobacco is your business.
At the end of the day, it's business, these things happen, and there's nothing we can do about it. I am reasonably sure there would be a buyer for Sutlif's US assets were STG inclined to offer them up. Here's me not holding my breath, betting they don't, because that would mean another competitor in a lucrative market.
