Tuesday, July 15, 2008

InBev and A-B

Well it happened. It of course (unless you've been asleep under a rock) is the buyout of Anheuser-Busch by Belgian Super industrial brewing company InBev. The beer blogosphere and main stream media have written numerous stories in the last few days. I wanted to wait a couple of days, see folks reactions before posting my own thoughts. I've had a good time reading peoples comments to other stories and the response is pretty wide ranging. From "this is an outrage how can something so American be bought out" (whats more American than capitalism?) to "Great now maybe someone will make Bud taste good" (they won't, InBev hasn't done great things with Becks and Stella now have they?) and of course everything in between. Now here are my thoughts.
Is it in outrage that a Foreign country can buy an "American icon?" Well first of all let's discuss Bud as an American Icon. What many don't realize or are too lazy to look up is the fact that while A-B may have been run by the Busch family, they weren't necessarily owned by them. They were owned by shareholders, and they weren't all from the good ole U.S. of A, but instead represented people and companies from all over the world, so let's stop the nonsense of complaining about a foreign company buying out Bud. Bud was already owned by companies and people from foreign countries so whats the difference? The Busch family not running things? This is a loss? Now is Bud an American Icon? I guess you could lump them in the same category as McDonalds and Coke, but Icon's? Buying out small breweries, suing small breweries until they can't afford to run their businesses, buying out other breweries from around the world (sound familiar InBev?) and taking them over? That's not how I define an Icon.
As for the comments about InBev making Bud better, again this is nonsense. InBev isn't going to mess with the recipe of Budweiser, the same folks that brewed it yesterday will brew it tomorrow and the next day. Those aren't the employees that have to worry about their jobs. Unfortunately I'm sure that InBev will be consolidating things and that's the saddest part of this buyout.
Lastly, what does this mean for what we care about, Craft Beer? Well there are two thoughts, what I think will happen and what I hope happens. When the possible merger was first discussed I posted my original thoughts on the issue here. Let me expand a bit on my initial thesis. I still think this could be bad for craft brewers. The larger the company the more tentacles they have into distributorships, the more leverage they have. If they tell distributors to only carry their products, and they have a large inventory of said products then the distributor may be enticed to work exclusively with them. This limits the choice for the consumer. Along with the InBev/A-B merger you have MolsonCoors and SABMiller merging their North American Distributors. This means in North America you have two brewing companies controlling (for the most part) beer and its distribution. How does this help the consumer? I don't think it does and that frankly is a shame.
Now I don't want to end on a downer, so let's talk about what I HOPE will happen. Reading the comments to stories, I've seen a lot of folks talk about "well I won't drink Bud anymore, I want an American Beer". Let's forget for the moment that Bud will still be made in America and focus on what that comment can mean. It means people want to drink American. Hopefully that can mean local. For instance here in Texas, maybe people go from Bud to Shiner, and from Shiner to Saint Arnolds or Real Ale, or Southern Star as their taste buds are opened to better beer. Could this happen? Why not? Even if a small percentage of Bud drinkers turn away and switch to craft beer, it could be a HUGE swing in over all sales. Its a unique opportunity for small craft brewers, to tout the localness of their products. As for me, I haven't had a Bud in years and years, I'll keep drinking my craft beer and promoting it, and talking about it as much as I possibly can.
Thanks to Jay for this last little tidbit. Maybe craft brewing is already on the upswing.....with Bud now being owned by a foreign company who is the largest brewer (a company that actually brews beer not contracts it) in the country? Boston Beer Co maker of Sam Adams.

2 comments:

KPeff said...

InBev are supposed to be ruthless cost-cutters, aren't they?

What kinds of cost-cutting decisions might they make which affect Craft Beer?

tedo said...

Kpeff,
Its an interesting question. You can be sure that there will be cost cutting, especially since InBev had to pay more than they initially wanted to. How that will affect craft brewers? Time will tell.