Tag: Anheuser Busch

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Light at the Top


Light or “lite” depending on your education level, rules the U.S. roost. Not a surprise, except for the fact that it just happened last year. That is one of my golden nuggets from recent 3rd quarter sales figures up at the top of the sales world.

The other takeaway is that Bud is still falling and that the U.S. seems to be the major ache for the beer as a commodity business. Anheuser-Busch InBev – North American revenues were down 5% to $4.3 billion. And Year to date, they’re down almost 4% which means Q3 was worse.

Why do I care about these things? Obviously sales of that magnitude are in the far future for independent beer but it does send a strong signal that the chipping away from the big sellers is still there and growing. Maybe not at the fast clip of the past but that may have been the low hanging fruit.

That fruit may next be plucked by Europe and then the rest of the world, at that point, we may see a drastic course change from the Bud Light – Coors Light – Miller Lite troika. And that change may lead to reactions.

We may well see reactions to Miller Lite taking the #3 spot by not losing as much ground. Will the big three return to fighting each other maybe?

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Fined, Not Dandy

Cheating is usually not spectacular. It is usually nicked at the edges. Slowly rolling through a stop sign in a quiet neighborhood and not speeding through a red light on a busy boulevard.

But you can get dinged by the authorities for either. Especially if you keep going back to the well. Which is what happened here in SoCal recently as Anheuser-Busch, LLC wholesalers settled a case for $400K (plus all the lawyering they had to pay for). In addition, Straub Distributing Company who distributes AB products in Orange County settled for $10K

They and numerous retailers were flagged for “Unfair Business Practices”. The distributors for paying for items and the retailers for accepting said items for either no cost or only partial cost.

The investigation started back in 2015 by the ABC’s Trade Enforcement Unit and resulted in one of the “largest penalty fines imposed in the history of ABC…” They will also have to install training programs for employees and anyone who has been to one of those, know what a time suck they can be as well as costly.

An additional fun fact is that, “In exchange for suspension of $200,000 of the fine, Anheuser-Busch, LLC agreed to extend the conditions of discipline to all Anheuser-Busch, LLC wholesalers in the state.” Why AB would want the $200K and make the disciplinary action statewide? Pre-empting further legal action? They need whatever amount of that $200K to pay the lawyers?

All I know is that this company is better at skirting rules and avoiding punishment. Much better than beer making for sure.

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Homebrew Lime-A-Rita

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I have zero idea what a “disruptive growth organization” is or how it relates to making beer but the DGO of SABInBevNoMiller, ZX Ventures is disrupting by purchasing Northern Brewer Homebrew Supply and its sibling Midwest Supplies.

The usual cut-n-paste explanation of the sale offered no clarity as to the future since it was written with enough vagueness to please a lawyer but whereas a beer BUYING community will certainly have members who either don’t know who owns the brewery or don’t care, the people in the home BREWING community are much more likely to know that using Northern Brewer is using the foreign owned company.
Other acquisitions by ZX were much more niche and under the radar.

This ownership change will affect a lot more people who have used products from Northern Brewer for their malt bills and hop torpedoing and I do think many will simply decide to go elsewhere even though it is easier to buy online which is the strong suit of the Midwestern company.

And perhaps that is what the goal is? To irreparably harm a growing company or at least shackle it and deprive home brewers of certain hops or malts or to just make it harder on them.

If the Behemoth from Belgium were truly altruistic, they could make hay with this acquisition but I doubt that is the case.

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Want this? Stop That.

For the mega-brew merger to go forward, along with divesting certain properties, it looks like the Federal Government also added some much needed assistance for smaller brewers. Whether it will be enough is another question.

1. The “Voluntary” AB Incentive for Performance plan is now shelved. This plan incentivized distributors who shut out brands that ABInBev did not want competing. The Department of Justice, in the settlement, wrote that it “prohibits ABI from instituting or continuing practices and programs that disincentivize distributors from selling and promoting the beers of ABI’s high-end and other rivals.”

2. Buying distributors is now capped as well. With ABInBev owning somewhere in the neighborhood of 7%, they will be barred from going over 10%. Which they more than likely will do.
Rest assured that the Brewers Association will be closely monitoring the situation. The group has been opposed to the merger of ABInBev with SABMiller from the get-go but, at least, there was some help given by the DOJ.

I have been of the opinion that if any of the industrial foreign owned breweries wanted to buy up little craft ones that it was sad to me personally but also part of the evolution into a new world of craft beer business. They could buy a brewery a month for years and not dent the overall numbers.

What I was worried about was that the beer that I wanted could be blocked from shelves or poorly handled by a distributor who was beholden to ABInBev or SABMiller. That blockage could seriously hamper the growth of a brewery.

Now we will see how well the rules are followed.

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Bitter Brew (and I don’t mean hops)

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I talk a lot about beer books.  If you put me on an island with a library and a brewery,  I would be happy, happy!  And this book would fascinate me.  I have already read one tome about the sorry saga of the Busch family and this one from a former L.A. Times writer William Knoedelseder sounds like a quick and juicy read.

“The engrossing, often scandalous saga of one of the wealthiest, longest-lasting, and most colorful dynasties in the history of American commerce—a cautionary tale about prosperity, profligacy, hubris, and the blessings and dark consequences of success.

Stretching across three centuries, from the start of the Civil War through two World Wars and Prohibition to today, Bitter Brew tells the astonishing story of how five generations of men—fathers, sons, and brothers—took a small, bankrupt brewery on the banks of the Mississippi and built it into an international colossus. It is the story of America’s past and present—a tale of promise and fulfillment for immigrants like Adolphus Busch, determined to strike it rich; and of a modern generation who squandered that dream. It is a story of breathtaking wealth, political power, and public acclaim—and of heartbreak, scandal, tragedy, and death. In chronicling the rise and fall of the Busch family and its business, the veteran journalist William Knoedelseder tells a broader story of American progress and decline over the last 150 years.”