The Anheuser-Busch- InBev takeover battle: Do we care?
By William Brand
Tuesday, July 8th, 2008 at 3:41 pm in Beer Business, General.
Does anyone have an opinion about the takeover battle for Anheuser-Busch? I’m not sure I do. The latest news is that A-B is going to court to try to stop InBev, the Belgian-Brazilian company that is trying to buy Anheuser-Busch in an unsolicited $65 a share, $40 billion takeover offer.
A-B also gave notice today it’s complaining to the U.S. Securities Exchange Commission and so on and so on. It’s the usual takeover mantra, suits and countersuits and blah and blah and blah. Do we care? I love what the English blogger Melissa Cole said; the battle between InBev and Anheuser-Busch “is a bit like when a wasp lands on a nettle - someone’s going to get stung and you don’t really mind who!”
Personally, although I think Bud and Bud Light are tepid, indiffernt products, most of the folks I’ve met who work for A-B are great people who care about what they do. Until Belgian Interbrew merged with Brazilian AmBev in 2004, becoming the world’s largest brewer, passing Anheuser-Busch Companies, I thought the same way about Interbrew.
But the merged company has run amok, buying breweries hither and yon and growing fat and puffy like the Pillsbury Doughboy in Ghostbusters.
All I can say is wowee. Comments anyone?
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July 8th, 2008 at 4:37 pm
I do care. My husband has worked for A-B for 20 years at the Houston Brewery. They do take pride in their product and company. Again a foriegn company try to take an American company oversea’s or across the border. Most of the companies that have been bought out or sold (i.e.-general motors) were because the quality of their product had gone down. This is not the case with A-B. A-B has been distributing Inbev’s product for about a year now. Inbev saw what a giant distributing company they were and wanted that. Budweiser is an American icon, and we should not let it go over seas. What will be next, ocar meyer? I think if inbev wants to buy something, buy the Pittsburg Steelers, or better yet one of our failing banks. They could and want to be bought. Leave us alone!!!!!
July 8th, 2008 at 4:49 pm
I know how you feel BudWidow. Everything about almost everything today sucks. America’s image in the world has sunk to lows I didn’t think were possible. The dollar is in the toilet and fine American companies like A-B are dirt cheap.
July 8th, 2008 at 6:01 pm
It was the StayPuff Marshmallow Man in Ghostbusters, by the way.
July 8th, 2008 at 6:48 pm
I’m in the craft beer business, and like William, I think that AB makes dull, insipid (although very consistent and carefully made) products. They are also very popular. InBev is sort of the foreign version of AB in some respects, both sort of the 800 lb. gorilla.
What really stands out is -when AB bought out Rolling Rock (itself an venerable old American Brewery with a storied history and strong regional following) they closed the Old Latrobe brewery, many people lost jobs, AB moved the operation to New York, put their efficient marketing and distribution network to work and… increased sales.
Now that the shoe is on the other foot there is a lot of wailing and crying about the “unfairness” of it all and “we can’t let an American institution go away”.
You simply can’t have it both ways. Bud has used their position of dominance to their advantage for decades. Like most companies that have a major advantage in size (they sell roughly 1/2 of all the beer in the US) they are often bullies.
I have seen many smaller breweries that have been shut out of many events because AB could outspend them by ridiculous margins. That borders on a monopoly -and believe me, it happens every day with them. I’ve seen it from the inside working with many different breweries and distributor networks.
InBev will likely be the same -or- perhaps worse, as it will be an even bigger beast. But this is how the free market works, for better or worse. That is what market system and globalization do. Nobody complains when we buy up foreign companies but when it strikes the other way…..
As for people like Budwidow, I understand their discomfort; it is very unpleasant, but I doubt many (if any) brewers will lose jobs over this. It will be medium to high level well compensated jobs, the kind occupied by smart, talented, well compensated people who can weather a little storm and will move on to other good jobs. Bully, meet the new Bully…
What will be of interest is how this will affect the loyal old school Bud drinker when their beer is owned by a European company. Will they switch to pure American owned brews? That now excludes Miller and Coors too.
Lots of great craft beer out there! Bud has had a great run, but their best days are probably behind them.
The King is dead, long live the king…
July 8th, 2008 at 7:56 pm
A lot of regional American icons were driven out of business by A-B’s mediocre products or gobbled up. Now that A-B is being gobbled up by a bigger fish, we’re supposed to care? Sorry, but I care more about my locally owned breweries. If you don’t want to be bought up then don’t sell stock in your company — they lived by the stock exchange and perhaps they’ll die (get swallowed up) by it. Drink local!
July 8th, 2008 at 10:24 pm
Piercival makes a great point. American companies have long enjoyed the benefits of globalism, screwing over people in poor foreign countries for the benefit of the wealthy Americans. Now, we’re the poor foreign country. Didn’t have a problem with it 20 years ago? Well, now it’s come back around.
As for patriotism in beer drinking, I’m sure it will go as far as it did in car buying. What happened to all of those people who were so proud to drive an American car? They wanted to get to work on a consistent basis.
In the end, does it matter? No, because MillerCoors is joint venture of Montreal based MolsonCoors, and chaired by Eric Molson, a Canadian, and SABMiller, a London based brewer chaired by a South African.
So if you want to drink American, drink local.
July 9th, 2008 at 6:55 am
Amen to that.
July 9th, 2008 at 6:59 am
Oh yeah, you are correct. Loved the film. But that puffed up image reminded me of the new InBev.
July 19th, 2008 at 9:29 pm
This is the first real blog I have seen on this issue yet.
I think one point that is missing here is the real effect that this merger will have on the craft brewing industry. I am an avid home brewer and love craft beer and have enjoy the success American Craft brewers have had over the last decade. I spent a month last winter in Belgium and talk to many locals that have a bad taste in their mouths over what Interbrew and now Inbev have done to the local Belgium brewing. They acquired and closed down what we would call craft breweries and “standardized” the beers keeping the names but not really the process. As anyone who makes beer knows it is not just the ingredients that make a good beer but how the brewer makes that beer. Now that Inbev has acquired AB what is to stop them from taking over such greats as Sam Adams, Sierria Nevada, New Belgium or any of the other great craft brewers.
There are two other issues at stake here. What will happen to the supply of the raw materials and the distribution channels for the craft beer industry? After talking to the head brewer of one of the previously mentioned craft breweries, who thinks this could be bad for the industry, I got to thinking on what this could mean not just to the craft beer industry but also the home brewer.
First we are already having shortages in hops and grains. With this merger and the fact that Inbev will have clout to shore up more of the material over a longer period of time I think price of supplies will start to climb even higher. Smaller craft brewers that already have a hard time getting material will suffer even more. Homebrewers will also get hit hard. They may suffer by not being able to get some kinds of hops or grains at all.
Second is the effect on distribution. AB owns its distribution channel and also distributes beers for other companies. I believe that Inbev is one of them. I also believe but cannot confirm that wholesalers usually get kickbacks if they push the bigger brands. AB gets prim space in many stores because of its size but they have a limited selection. Inbev on the other hand has a very wide selection and could take up even more shelf space pushing the smaller beers out.
This might sound like a bunch of wining and we should let the market to what it will. I have to say look what has happened to the banking industry and the oil industry. We have really benefited form a free market there. NOT. Instead of having the king of beers we now have the emperor of beers. Some day we will all have many choices to drink the same beer just in a different package or color.
Sorry for being such a pessimist but I think this is bad for beer brewers and drinkers alike.
July 19th, 2008 at 11:20 pm
I think you’re right, Dan. The biggest worry is distribution. The number of distributors nationwide has been shrinking. All of us in the craft beer world need to stay alert to the issue. If we find the ABI (Anheuser-Busch-InBev) squeezing distritubors and pushing InBev’s many brands and ignoring craft beer, we need to scream long and loud. That’s a real danger.
The only thing that will save craft beer is that it;s hot and very popular and distributors ignore it at their peril. It’s where the growth is in American-made beer.
About takeovers, no doubt that’s going to happen. No reason for InBev to stop now. But most craft breweries are privately owned. New Belgium and Sierra Nevada are both private. Boston Beer (Sam Adams) isn’t. And ABI is sure to scoop up some privately held craft breweries just by offering incredible prices. Good post Dan. Stuff to worry about.