" Shame On InBev "
Before the craft beer revolution I was a devotee of Becks beer, a pilsner brewed in
the city of Bremen in accordance with the Reinheitsgebot, the German Purity Law of
1516. It said so right on the label. Having moved away from it for a while I recently
decided to revisit my old friend. Sadly, it wasn't the same. That great German brew
was not light and bland. Then I checked the label. It wasn’t German beer anymore!
It was no longer brewed in Bremen but was now a “Product of the USA.” Why? AB
InBev (BUD), is now the owner of Beck’s and many other beers, including, of course,
There has never been a beer company like AB InBev. It was created in 2008 when
InBev, the Leuven (Belgium)-based owner of Beck’s and Stella Artois, swallowed
Anheuser-Busch, the maker of Budweiser, in a $52 billion hostile takeover. Today,
AB InBev is the dominant beer company in the U.S., with 48 percent of the market. It
controls 69 percent in Brazil; it’s the second-largest brewer in Russia and the third-
largest in China. The company owns more than 200 different beers around the world.
It would like to buy more.
Takeovers are not new for InBev. In 2005 it took over Hoegaarden, the famous
White ale. To many Hoegaarden drinkers the flavor of the beer changed at that
point. Many believe that when a local brand is taken over by a global brewer, the
taste becomes intensionally blander to expand the beer's appeal to a larger
InBev consistently puts profits above all else. When it took over Anheuser-Busch it
laid off approximately 1,400 people, about 6 percent of the U.S. workforce. Next they
sold $9.4 billion in assets, including Busch Gardens and SeaWorld. AB InBev also
tried to save money on materials. It used smaller labels and thinner glass for its
bottles. It tried weaker cardboard for its 12-packs and cases. The old Anheuser-
Busch insisted on using whole grains of rice in its beer. AB InBev was fine with the
In the Hallertau region of Germany, small farmers had long made a living growing
high-quality hops like Hallertauer Mittelfrüh, an integral component in Budweiser.
Budweiser, after all, was originally a Bohemian-style beer, brewed with European
ingredients. Hops provide the dry smack that rides atop the sugars in a beer. After
the 2008 takeover, however, AB InBev said it was cutting its purchases of the
Hallertauer hops and switching to lower grade, less expensive ones. Needless to
say, the change to inferior hops means your beers will have less taste InBev's
however cared only that they saved about $55 million a year because of the
One result is that Budweiser sales are declining as are sales for other beers
weakened by InBev like Becks and Bass. However the trade-off of higher profits for
lower volume is an acceptable one for AB InBev. The company also continues to
make changes to hallowed brands and try the patience of traditionalists with
inventions like Michelob Ultra Dragon Fruit Peach. Earlier this year, it reduced the
alcohol content of the UK's versions of Artois, Budweiser, and Beck’s from 5 percent
to 4.8 percent. Why? Well, with lower alcohol company saves money because taxes
in Britain are levied by alcohol content.
AB InBev recently released Bud Light Platinum, its first major new beer in the U.S.
since the takeover. It comes in a sleek blue bottle and has nearly 2 percent more
alcohol than its mother brand. It’s also more expensive. They followed up in April with
the rollout of Bud Light Lime-A-Rita, targeted at young women who prefer hard liquor.
When AB InBev bought Anheuser-Busch, it acquired about 50 percent of Grupo
Modelo, Mexico’s largest brewer and the maker of Corona, America’s No. 1 import. In
June, AB InBev announced would purchase the rest of the company for $20 billion.
According to InBev spokesmen, Budweiser and Corona would now be the company’s
flagships forgetting Becks my old friend.