Headline: U.S. beer drinkers could toast Anheuser takeover

"Once InBev's $52 billion takeover of Anheuser gets approved, it will be able to use Anheuser's far-reaching U.S. distribution network to sell its own beers, introducing brews such as Stella Artois, Hoegaarden, Leffe and Staropramen to drinkers across the United States."

http://news.yahoo.com/s/nm/20080714/lf_nm_life/anheuser_life_dc

I'm not familar with these beers, except Stella Artois, which struck me as about half a step up from a BMC, so a bit too expensive for what it delivered, but not a bad beer. I think that with the abundance of craft brews in this country, there really won't be anything to toast as the article puts it.

I've had Staropramen, meh at best. I think I've had Steel Artois as well. If I did it wasnt anything to remember obviously.

Hoegaarden is the only thing that I can think of that inbev is responsible for that is even remotely good.

I've had them all (I lived in Germany for 9 years), but I really like the Leffe Blond.

I had a 2 liter bottle I paid $25 for many years back. I opended it at my granddaughters wedding. I still have the bottle.

Will the takeover make their beers any cheaper

Hoegaarden is damn good. great beer for BMC people. Leffe, just had this a few months ago and was very pleased, a great beer. Stella is like my "Hey they have stella or BMC" "Ill have a stella"

Arneba28 said:

Hoegaarden is damn good. great beer for BMC people. Leffe, just had this a few months ago and was very pleased, a great beer. Stella is like my "Hey they have stella or BMC" "Ill have a stella"

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I forgot about Leffe. It is alright too.

Stella is the BMC of Belgium. I won't drink it.

Hoegaarden is waay more than remotely good. If I could only have one beer for the rest of my life (which would be a personal hell in itself) hoegaarden would make the short list.

Coastarine said:

Hoegaarden is waay more than remotely good. If I could only have one beer for the rest of my life (which would be a personal hell in itself) hoegaarden would make the short list.

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Yeah, I understated that. Hoegaarden is a great beer. Not in my top 10, but it is pretty damn good.

Hoegaarden is a great beer and Leffe is pretty good too in my opinion. Inbev has a ridiculous number of beers though like 50 or something so it wont just be those big ones you get to try it will be some little ones too.

Ok, dumb question time ... what is a BMC ?

BMC=BudMillerCoors. It's shorthand for Mass Produced American Lager.

You know, after my visit to France, I gotta say that this would be nice, actually. Most bars, in addition to their "BMC" (Kronenbourg), had Grimbergen, a nice Belgian blonde. If that becomes the norm here, even in crappy bars, it will be a net gain for us.

Personally as far as light lagers go Stella is number one in my book. I cant wait for the cost to go down.

After browsing InBev's website, it appears that almost all of their beers are of the BMC type (urine ), but there are a couple decent beers that will benefit from the AB distribution network. Althought AB already distributes Leffe and I see Hoegaarden in a lot of places around here.

My fear is that these brands will replace craft beers on the shelf and there will be big-time pressure to retailers from AB to do so.

olllllo said:

My fear is that these brands will replace craft beers on the shelf and there will be big-time pressure to retailers from AB to do so.

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There's already tremendous pressure. It helps to have "marketing limit" regs like in CA, I guess, but that's so disgustingly socialist...

The open question is whether it is easier to fight 2 formidable dogs or 1 giganitic dog.

The threat of having your Bud light pulled has to be pretty formidable so it might be an easy decision to toss out Lost Abbey for Grimbergen and Leffe, especially if there are to be Grimbergen Girls and other macro schwag.

olllllo said:

The open question is whether it is easier to fight 2 formidable dogs or 1 giganitic dog.

The threat of having your Bud light pulled has to be pretty formidable so it might be an easy decision to toss out Lost Abbey for Grimbergen and Leffe, especially if there are to be Grimbergen Girls and other macro schwag.

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That'd suck...I suppose time will tell.

The better stocked stores will always keep stock of good micro. The Fred Meyer (Krogers) around here, prides themselves at having a good craft/Belgian section. Even though the majority of sales is BMC - they keep a small stock of good selection - fewer bottles of more types.

It's my go to for beer unless I want something a little harder to find - then I go to a dedicated bottle shop.

Convenience stores around here will probably benefit from having a couple of the better InBev brands on the shelf - maybe take up some of the malt liquor room.

To a degree, I agree NWB, but vast swathes of the country do not have access to good beer. This will probably impact those areas more adversly.

The distro laws in most states create de facto monopolies or oligopolies for the distributors; the macro brewers have a lot of influence with the distributors b/c they can wave a ton of $$ under their noses. The craft brewers and the consumers are essentially powerless...look at what happened to Bell's in Illinois.

InBev bought A-B largely for access to the US distro system. Why? So they could more widely distribute their beers here. This is largely a zero-sum game...if something gets added, something else gets dropped, either in the distributors lineup or on the retail shelf. It's not gonna be "I can now get Stella, but I can't get Bud Light anymore"...it will be more like "I can now get Stella, but I can't find anything from that craft brewery from OH any more".

The impact overall may be minimal, but the pressure will definitely be there, and not in our (craft brew drinkers's) favor.

Bike, thanks for the excellent link. I knew liquor laws were, to a large extent, dictated by a crazy maze of greed and special interests, but I didn't know how bad it was in Il.

In an ideal world, all these regulations would be repealed, the brewers would brew and the drinkers would drink. Supply and demand would dictate who made $$, just as it should. Inbev buying Bud is clearly not a step in that direction, but I still think that if we all do our part to support micro brewerys market demand for quality beer will win in the end. BMC isn't going to go out without a fight, but the history of business is littered with examples of companies that did not meet the market's demand and failed despite all of their best efforts to the contrary.

If I lived in Il, I'd drive to the border this weekend and pick up a 6 pack of every variety Bell's offers.

olllllo said:

To a degree, I agree NWB, but vast swathes of the country do not have access to good beer. This will probably impact those areas more adversly.

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I guess that I can only speak for my neck in the woods, olllllo.

Out of curiosity, what kind of selections do you guys get in your areas?

If you have a place like this near you, support it. They have over 1000 different beers. I love being able to walk into a store and grab any beer I have ever heard of, plus many that I haven't. This could have a large long term impact on the availability of craft brews. I just hope they are able to survive if they get pushed out of supermarkets and small package or convenience stores.

Hercules Rockefeller said:

Bike, thanks for the excellent link. I knew liquor laws were, to a large extent, dictated by a crazy maze of greed and special interests, but I didn't know how bad it was in Il.

In an ideal world, all these regulations would be repealed, the brewers would brew and the drinkers would drink.

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That's why we homebrew. Brewer=drinker. Eliminate the middlemen!

If I lived in Il, I'd drive to the border this weekend and pick up a 6 pack of every variety Bell's offers.

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I've been plotting just such a run...I needs me some Two Hearted. But I'm waiting until I have some other reason. And when I get one, I gurantee it will be more than 6-packs!
"Kids, you can't come with Daddy...he needs to fold the seats down"

We have a fairly decent selection at normal grocery stores.

I agree we as beer geeks should (and probably already do) go out of our way to support good beer. Unfortunately craft beer needs those swing drinkers that are largely unaware of the bait and switch that is going to occur.

Theres been a theory about the success of craft beer that has been bandied about in the past 10 years or so, about how the growth of craft beer is dependent on taking market share away from the green bottle brewers.

Essentially it goes like this. Craft beer is unlikely to convert drinkers from the BMC crowd. There is, however a 20% market of beer drinkers that buy European lagers (green bottle) that do so for the cache and feeling that they are buying a premium product. Craft beer needs to cut ito that market because there is no growth potential from BMC drinkers and it doesn't make sense to cannibalize from other craft breweries.

This is why, I feel the InBev deal is so significant. It's a scary proposition, but perhaps there is an opportunity here.

olllllo said:

My fear is that these brands will replace craft beers on the shelf and there will be big-time pressure to retailers from AB to do so.

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Here in PA, the way it works is a distro will become the 'master' for a company. There is only one master allowed (I am guessing based on population?) in a given area, so I think it may not be a terrible concern here. The one main benefit is the master will have the best price on a brand (or brands under a company like InBev) because the other distro's in the area must buy from them. But the door swings both ways because f'instance on distro is the master for Spaten products and another was the AB master and they'd each have the other's products on the shelf.

So the long and short is the non-master distro's for InBev will probably not change their product line nearly as much as the master for InBev potentially could.

.....and to make it more interesting

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http://www.spiegel.de/international/business/0,1518,565898,00.html



The brewing world, on the heels of InBev's acquisition of Anheuser-Busch, contemplates future industry consolidation.



Could SABMiller, the brewer of Miller beer, be the next takeover target?
InBev's $52 billion acquisition of Anheuser-Busch seems like the merger to end all beer mergers, the climax of several decades of industry consolidation. What could possibly top it?

Well, how's this: A few years from now, after it has digested Anheuser-Busch, InBev joins up with other brewers such as Heineken and Carlsberg and makes a joint bid for giant SABMiller. The companies carve up SABMiller's portfolio, with InBev taking over SAB brands in regions such as Africa, where it is weak.

The scenario may sound far-fetched, but analyst Gerard Rijk at ING Wholesale Banking in Amsterdam points out that SABMiller, which markets Miller beer in the US, is the one big brewer still vulnerable to takeover. Heineken's family owners are unlikely to sell, and Carlsberg is controlled by a foundation. The London- and Johannesburg-listed shares of SABMiller, which will lose its status as the world's biggest brewer after the InBev-Anheuser deal, are widely held. "The big one that's left that can be taken over is SABMiller," Rijk says.

Setting Precedent

There's already beer industry precedent for such a combined bid. Earlier this year, Amsterdam-based Heineken and Copenhagen-based Carlsberg finalized their joint takeover of Britain's Scottish & Newcastle. Heineken will take S&N's assets in markets such as Finland and India, while Carlsberg will take S&N brands in France and Vietnam, among other places.

The fact that people in the industry are even talking about who might buy SABMiller is a sign that pressure to get bigger remains. With little growth in overall beer volumes, the companies are focusing on operating more efficiently, and marketing their most profitable premium brands in as many countries as possible. In a conference call with analysts July 14, InBev CEO Carlos Brito said the Belgian-Brazilian company wants to market Budweiser as a premium brand in fast-growing markets such as China and Russia, while saving $1.5 billion annually by 2011 by combining duplicate operations and other measures.

Obstacles to Further Deals

Before there are any more big deals the big brewers will need to spend a few years restocking their war chests and paying off the debt they have built up. InBev is borrowing a cool $45 billion to buy Anheuser-Busch. And InBev won't be doing any more dealmaking unless it gets the Anheuser-Busch merger to work. That won't be easy, says Michel de Carvalho, a member of the Heineken supervisory board and husband of Heineken heiress Charlene Heineken.

InBev will have to overcome Anheuser-Busch's focus on the US, where it has almost half of the beer market. "They don't feel comfortable going outside the US," says de Carvalho, who is also vice-chairman of investment banking at Citigroup in Britain. "When you have such a wonderful business, you don't want to take the risk of going into emerging markets as we did."

In fact, InBev's competitors almost seem to welcome its play for Anheuser-Busch. The job of combining the two companies will keep InBev management busy for some time. In addition, InBev, which is known for cost-cutting, may be tempted to pare the advertising budget for Budweiser and Bud Lite. "Miller might in fact benefit from the fact there will be less competitive pressure from mainstream brands," says ING analyst Rijk.

But if InBev manages to successfully integrate Anheuser, expect the dealmaking to resume.

olllllo said:

We have a fairly decent selection at normal grocery stores.

I agree we as beer geeks should (and probably already do) go out of our way to support good beer. Unfortunately craft beer needs those swing drinkers that are largely unaware of the bait and switch that is going to occur.

Theres been a theory about the success of craft beer that has been bandied about in the past 10 years or so, about how the growth of craft beer is dependent on taking market share away from the green bottle brewers.

Essentially it goes like this. Craft beer is unlikely to convert drinkers from the BMC crowd. There is, however a 20% market of beer drinkers that buy European lagers (green bottle) that do so for the cache and feeling that they are buying a premium product. Craft beer needs to cut ito that market because there is no growth potential from BMC drinkers and it doesn't make sense to cannibalize from other craft breweries.

This is why, I feel the InBev deal is so significant. It's a scary proposition, but perhaps there is an opportunity here.

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I agree that craft beer won't convert long time BMC drinkers in large proportions. But one area where craft beer can grow is in new drinkers. personally, I never became a BMC drinker becuase I started drinking when I went to college in Ft. Collins CO (GO RAMS!). In Ft Collins, you can barely walk across the street without running into a micro brewery, and they practically run Fat Tire through the municipal water lines. Sure, I drank my fair share of 40's and Old Milwaukee when the funds were short, but my freinds and I would pick up any 6 pack of micro we could find on sale and try any variety we could.

now, I'm not advocating that microbreweries market to 18 yr olds, but as young people approach legal drinking age with all of the options previous generations didn't really have, I think craft brewing can only grow.

Boston Brew Guy said:

If you have a place like this near you, support it. They have over 1000 different beers. I love being able to walk into a store and grab any beer I have ever heard of, plus many that I haven't. This could have a large long term impact on the availability of craft brews. I just hope they are able to survive if they get pushed out of supermarkets and small package or convenience stores.

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Impressive!
My closest beer specialist doesn't have that much I think http://www.internationalbeershop.com.au My local pub has 120 beers though, only 20-30 are on tap, most are bottled.