Boozin’ Blog

In case you haven’t heard what’s going on, here’s the issue. European beer giant Inbev appears to be making moves to take over Anheuser-Busch. As I pointed out previously I doubt that this will have much of an effect on the major products like Budweiser, Michelob, Busch, etc. But Inbev’s leaner meaner approach to beer will likely lead to fewer of the craft-like beers and real craft brewers that A-B has been dabbling in over the last few years.

Another movement has arisen which caught me by surprise. It shouldn’t have but it did. SaveBudweiser.com makes the argument that another U.S. company shouldn’t be allowed to fall into the hands of an overseas concern. The site does mention the “great taste” of A-B beer but only peripherally. Its main thrust is clearly a jingoistic one – don’t let those greedy Belgians get their hand on our company.

Overall I don’t think that an Inbev takeover would really mean that much. Let’s consider a couple of instances of big beer mergers and acquisitions.

First, many beer drinkers would be surprised to know that Miller hasn’t been just Miller since 2002. The company is now called SABMiller. The SA stands for South Africa. Five years ago an African brewer became the second biggest beer company in the world when it acquired 100% of Miller. To make things more confusing SABMiller and Molson Coors (a Canadian company) will merge their US interests later this year. Have any of these things had a really major affect?

Second, consider the case of Rolling Rock. Inbev acquired the well-known regional brand and left it largely untouched. The famous brewery in Latrobe, Pennsylvania continued to churn out the familiar green bottles of Rolling Rock. Then a few years ago Inbev and Anheuser-Busch cut a deal that included, among other things, A-B’s distribution of Inbev’s brands like Stella Artois, Becks and Leffe. Rolling Rock was also part of this deal. Once A-B had control of the company they took the brand, the distinctive bottles and got rid of pretty much everything else. They closed the brewery leaving the workers without jobs and moved production to their New Jersey plant.

I doubt that SaveAnheuser.com will receive overwhelming support from Latrobe.

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Surely by now you’ve heard of the bid for Anheuser-Busch that Inbev is rumored to be considering. At this point there’s only rumor and speculation but this is often how these things first appear in the world of big business before becoming reality.

There’s enough real to this rumor to make Bloomberg columnist David Pauly wring his hands fretfully about the fate of his beloved Budweiser. Never fear, Dave, Bud will be safe. Given past performance I doubt that Inbev will dismember nor significantly alter the well-known brand. There might be some shuffling and shifting of small aspects of Bud but the taste and the general market position of it will remain largely intact.

The real danger of the Inbev takeover is what it will mean to the craft beer industry. The story of such take-overs in Europe has been one of the race to the bland. When big beer companies like Inbev take over smaller brewers their big, recognizable brands remain but the smaller product lines tend to get choked off.

Anheuser-Busch, on the other hand, long ago recognized the potential of the craft beer industry in America. They have been working on long-term strategies to claim as much of that part of the market as they can.  The “faux crafts” of A-B are well known. Lesser known is the huge investment that A-B has put into independent brewers. Deals like the one famously made with Redhook more then fifteen years ago are far more common these days than most beer drinkers realize. A-B owns minority shares in small, regional brewers all over the country and has made distribution and marketing available to these brewers that otherwise would have been out of reach.

Does Inbev understand to potential of this market? I doubt they care. Although A-B’s motives are no less based in profit they have the ability to think long term while Inbev’s exploits seem more focused on a slash and burn policy designed to produce quick profit.

By the way, I recognize that fans of Rolling Rock with memories must now think that I’m completely nuts.

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