Comments on: Musing: So does it matter if A-B gets taken over?

By: Grumpy Beer Geek » Musing: So does it matter if A-B gets taken over?

Grumpy Beer Geek » Musing: So does it matter if A-B gets taken over? — Tue, 24 Jun 2008 15:56:24 +0000

[...] Syndicated from “Appelation Beer” [...]

By: SteveH

SteveH — Fri, 20 Jun 2008 12:07:35 +0000

“I fear the growth of Red Hook, Widmer and Goose under AB may come to a close when InBev buys them out. How big does a brand need to be for ImBev to want to keep it?”

If nothing else, these 3 establishments were thriving before their distribution deals with A-B, I’d like to think that they’d survive if ties to InBud were cut. Maybe they can band together themselves to build a micro-distribution group?

By: Swordboarder

Swordboarder — Thu, 19 Jun 2008 18:16:31 +0000

Jeff,
There’s no way that InBev and SABMiller are going to merge. InBev in the last year has moved all of it beer into AB distributorships. It’s very expensive and not something they’re going to do more than once. The buyout will happen, or a merge will happen somewhere down the road.

I fear for the major micros under AB’s wing. The AB distributors will do whatever AB tells them to do, and the same will be true for InBev. I fear the growth of Red Hook, Widmer and Goose under AB may come to a close when InBev buys them out. How big does a brand need to be for ImBev to want to keep it?

By: Jeff Alworth

Jeff Alworth — Wed, 18 Jun 2008 21:26:35 +0000

Don’t you think that it is the companies selling beer based upon price – and efficiency throughout their system – should be more afraid than small brewers who have proved masters of brewing and selling inefficient beers?

Absolutely. And apparently SABMiller had been really courting InBev and were enraged when they turned to Bud. The institutional advantage Bud already enjoys had eroded other companies over the past generation. Now, with macros flatlining and imports and craft showing the only growth, the pressures are greater.

But that’s only one of several reasons why I’m hoping this won’t go through.

By: Stan Hieronymus

Stan Hieronymus — Wed, 18 Jun 2008 05:15:02 +0000

Steve H – Good question. I’m not aware of deals where Inbev has been a partial owner, as A-B is in Widmer-Redhook, Goose Island, etc. Would they want to change that, going for full ownership or striking some other deal?

At this point just speculation.

By: Stan Hieronymus

Stan Hieronymus — Wed, 18 Jun 2008 05:04:14 +0000

Jeff – This is a conversation I was pretty much ducking, but . . .

Since you brought it up, don’t you think that it is the companies selling beer based upon price – and efficiency throughout their system – should be more afraid than small brewers who have proved masters of brewing and selling inefficient beers?

By: Jeff Alworth

Jeff Alworth — Tue, 17 Jun 2008 15:09:02 +0000

Sorry, a quarter of the world’s production (and half of America’s).

By: Jeff Alworth

Jeff Alworth — Tue, 17 Jun 2008 15:08:03 +0000

Stan, I think you focus too narrowly on the interests of the corporate behemoths–about whose welfare we should rightly care little. I’m not nearly as concerned with what faux craft InBud releases as compared to A-B’s faux craft. What I am concerned about is real craft’s access to barley and hops and, critically, distribution in local markets. I’m concerned what a company that owns half the world’s production means to inefficient but lovely regional breweries across the planet. When I was in Panama a few years back, I enjoyed Soberana and Panama beer. Can they compete against InBev-backed Budweiser onslaught?

Fortunately, it looks like A-B is fighting back. Since $40 billion of InBev’s offer is borrowed, A-B’s purchase of Modelo will make it too big for InBev’s creditors to swallow. I hate to support Bud on this one, but I think it’s best that InBev stays out.

By: Pivní Filosof

Pivní Filosof — Tue, 17 Jun 2008 12:21:22 +0000

What I find funny is that, according to what I’ve read on the press, InBev has promised A-B to tout Budweiser in the European market, pretty hard due to all the trade mark battles with Budvar. Unless InBev knows something we don’t.
If the Staropramen case is anything to go by. I don’t think a takeover will be good for A-B or their cunsumers. InBev’s business trategy is to make beer the cheapest possible way. Its Brazilian head honcho is a fan of fierce cost reduction (read corner cutting) and any underperforming unit (as seen by InBev) will have to close down, at most, the brand will remain if convenient.
Not to mention that InBev will use A-B massive distribution netowork and market muscle to forcefeed either Stella or Brahma Chopp to the American market

By: SteveH

SteveH — Tue, 17 Jun 2008 11:59:54 +0000

A question I posed at RealBeer, and I’d like to hear your opinion as well; what becomes of the shares A-B holds in some of the smaller breweries, such as Red Hook? And what of the distribution deals?

Many have speculated that InBev would honor all contracts, but your Rolling Rock example is poignant.