Manufacturing Monday: Budweiser Goes Belgium (and Brazillian) on us
by johnny venom, Mon Jul 14, 2008 at 02:22:09 AM EDT
Now you may be asking, Budweiser? What's all this then? I thought you handled manufacturing stuff, you know gears, plastics and metal thingies? Yes we do, but here is something to keep in mind as to why food is also covered. When they (being the mainstream media) has a manufacturing story, sometimes they include that little nugget "yet America is still the largest manufacturer." Sounds crazy, I mean look around in stores, it seems like everything is made in China. Yet, this often-used tidbit is used because when this country calculates manufacturing, processed foods gets included. Yes..that's right, those chicken nuggets and mac 'n' cheese microwavable meals are considered "domestic manufacturing." And you know what else is also? Beer!
In another episode of "What American Industry Icon Did We Lose Today?", we can now count the loss of a good chunk of our beer industry. It seems the folks who run Anheuser-Busch have finally relented and agreed to be sold. Now this came to a surprise to many, as as long as a week or so ago, they were protesting. Things got ugly, I mean the Board at Anheuser-Busch were trying to get InBev in trouble for doing business in Cuba (oh please, lift that stupid embargo already!).
But if one looked closer, you'd see what all the ruckus was about from the Budweiser crowd. It wasn't a protest on nationalistic grounds, you know keeping it an "American" company. Nope, they were complaining that the price was too low. Oh you'll hear other things, but that's really what set off the hornets nest. InBev offered $65 per share. Anheuser-Busch said that the company was worth at least $70. In the end, InBev conceded.
But who is InBev? We all, well I should say mainly Americans (and Canada, though folks up there stand by their Molson, a good beer if I may be so bold) know who the famed St. Louis brewery is. Ironically, the company started in Europe, so you could say it has come full circle. Well, not really, ok nix that last bit. Anyways, InBev is one of those corporate creatures that was born from a long series of mergers. InBev came about with the merger of Belgian-based Interbrew and a Brazilian business concern known as AmBev. But wait, it gets a wee bit more confusing, as Interbrew was the product of a marriage between a much older Flemish brewery Artois and a Walloon-based Piedboeuf. Interbrew's first major purchase was Canada's LaBatt. I'm sure I missed a couple of buyouts and mergers. As for AmBev, the Brazilian outfit was a merger as well between the Antarctica and Brahma brands.
The new company, Anheuser-Busch InBev, will have a massive impact on the market share for beer. According to a CNN story, AB already had 48% of the market. Two of the world's four largest breweries will have come under one roof. Anheuser-Busch also has significant investments in foreign beers as well. According to it's 2007 Annual Report, it has investments in China's Harbin and Tsingtao brands, and Mexico's Modelo Group (Corona Beer). This, I assume will also be handed over to the new conglomerate.
Though spokespeople from InBev has said it will keep US operations, and even the St.Louis headquarters for North American Operations, to me something is amiss. You can expect layoffs, there's always layoffs in business deals like these. But also, a loss of pride somewhere. I look around, we have no American (or even Canadian!) television companies, or really any consumer electronics companies! And soon we could face the prospect of no North American-based automobile companies as well. Now our beer?
Really, I shouldn't say "our beer," judging by how fast the board turned. Though it has yet to be approved by regulators in both Europe and the US, I'm sure it will go through. But really, the larger shareholding families couldn't have protested? You shower us with all this, what really could be said, false patriotism in your ads to buy your product, yet when the price is right you sold out! It's a cold reminder that these companies are no more American or Canadian or (pick your country), they are what they are...companies for the shareholder. Economic fallout of a collapsed US Dollar. And you free trade/free-market guys out there that like to be gung ho about it, don't you dare tell us anymore that your system is as American as Apple Pie. We still make apple pies, don't we?