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WRITER, CONSULTANT AND BROADCASTER SPECIALISING IN BEER, PUBS AND CIDER. BEER WRITER OF THE YEAR 2009 AND 2012

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Friday, 13 June 2008

Monster Mash



So Inbev have made their bid to buy Anheuser-Busch - $46.3 billion.

Boy, is this one difficult.

If you'd asked my view on this five years ago I would be whooping for joy. Back then, Inbev was still a big old brute, but it styled itself as 'the world's local brewer' and was the best of a bad bunch among the multinational brewing corporations. With its Belgian heritage and its acquisition of Bass, it did at least offer an alternative to characterless lagers. Most beer bloggers may turn their noses up at Leffe and Hoegaarden, but that's because you know the delights of Westmalle, Orval, maybe even Westverleteren. If the only choice was between the Inbev brands and Bud, you'd hand the Belgians your money every time.

That was then. Since Interbrew's merger with AmBev, the South Americans have taken the reins. Their number one global priority is Brahma, resplendent and sun-struck in its curvy, clear glass bottle. Bass - once the greatest beer the world has ever seen - is being subjected to a slow, wretched, undignified demise. When I worked with Interbrew they may have been a big corporation, but there were people who worked there because they were passionate about beer - even if that passion was frustrated. These guys have now been moved on, replaced by career marketers who believe beer can be sold by the same formulae and tick boxes as any other grocery brand. If they win in their bid for A-B, they will become even bigger, even more faceless and passionless, even less interested in beer itself.

So does that mean you say, as Roger Protz did recently, "Better the devil you know?" Hands off A-B?

I'm sorry, but no. Never. My last book, Three Sheets to the Wind, had to be read very carefully by libel lawyers before publication because of what I said about A-B in there, so I must choose my words carefully. The main reason I love the beer world is that beer attracts top people. It is the most sociable drink in the world and people who tend to spend most of their time around beer are decent, straightforward, unpretentious and above all, kind. Not A-B. In my humble opinion, based on having read detailed histories of the Busch family, they don't just see other brewers as competitors - they seem to actively resent anyone else who has the audacity to brew beer, and desire to see them crushed. Most people know about their legal vendetta against Budvar - from whom they stole the Budweiser name. They also went to court to have Belgium's wondeful Bush beer change its name to Scaldis, just because Bush sounded a bit like Busch. The brewer that churns out 93 million barrels of lager a year said that Dubuisson - who brew 21,000 barrels a year of a golden ale that weighs in at 12% ABV - was a threat to their business. You may well think "What mean-spirited bastards". I couldn't possibly comment. I've also heard unsubstantiated anecdotal stories of extraordinarily aggressive sale tactics, bordering on threatening. These activities go against everything that beer is about.

I know that business is business. I know that both Inbev and A-B are facing stagnating markets, with commodifying brands. I know it's a good strategic fit because Inbev is weak in North America and China, where A-B is strong. There are plenty of arguments why this is a good move from Inbev's point of view, and the markets are responding favourably.

But if there's any argument as to how the drinker benefits from this is in any way, I've yet to hear it.

10 comments:

chris_o said...

This rather reminds me of the Champions League final - an interesting spectacle but a shame they can't both lose. Have to say that some of the hysterical reaction over the pond has provided some cracking entertainment over the last couple of days though. And, if InBev does win, it seems that the strain on its finances might curtail its world domination designs elsewhere for a while.

Stephen Beaumont said...

I fear you've developed a bit of myopia, Pete. I've heard the same stories about A-B's behavior in the U.S. as you have, but I've also been privy to any number of tales of scurrilous InBev behavior in Belgium (and Diageo behavior in Ireland and Heineken behavior in Holland, and so on). Further, I know A-B people who are dedicated beer folk, even ones who drink other breweries' beer, just as I know InBev reps who still feel the passion.

Six of one, half a dozen of the other, my friend. Although given the choice between a Leffe Brune and a Stone Mill Organic Pale Ale, I know which one I'm going to drink, and it ain't the Belgian.

Troy said...

As an American, I think it's great for American beer. We can finally stop being the butt of the world beer jokes (Coors and Miller are no longer American either). While A-B and InBev are muddling with their new company, small brewers in America will get a better chance to show what they can do.

juliehg said...

I've consumed Budweiser only once in my life. It was so disgusting, I've never been tempted again. As a home brewer, and fan of the microbrew, I echo Troy's sentiment that hopefully craft brewers can increase their exposure should this merger go through.

However, given the political rhetoric already emerging to protect an 'American institution' such as A-B (*gag*), I'm not sure that there's much concern over this merger going through.

On a completely different note, William Brand in California highlighted your blog, which I'll be adding to my Google reader now that I've found you. Cheers!

Pete said...

Hi Steve,

Good to see you here!

Myopia? I don't think so. I 50% disagree with you, and 50% think we're violently agreeing, does that work? I'm not sure...

For my books I've extensively studied the histories of most of the big brewers, and in my day job I've worked with quite a few of 'em too. These days they're all acquisitive and aggressive. I can personally assure you that Heineken are breathtakingly arrogant, for example.

There are no saints here. But when you read something like 'Under the Influence', the unauthorised story of the Busch dynasty, those guys go beyond nasty corporate and into their own pantomime villian league. Apart from the dodgy allegations of racism that haunt members of the Coors dynasty, historically no-one comes close.

But what I was saying, and where I think we agree, is that where I once saw Inbev as the best of a bad bunch, they now seem to be trying really hard to become not just the biggest, but the meanest boys on the block. What's amazing about this story is that you can just about see A-B as the put-upon little guy. If you'd put that possibility to me a year ago, I'd have laughed until I had an aneurysm.

I know A-B are dedicated brewers (they actually think beer should taste like that), and that they've started to make some decent beer in response to the success of the micros. Is Stone Mill Organic Pale Ale one of theirs then? Don;t think we'll ever see it over here...

Stephen Beaumont said...

True, Pete, we're closer than we are further apart. (Does that even make sense? Well, I'm sure you get my drift.) I've read "Under the Influence," and also have some interesting stories about InBev, nee Interbrew, from both sides of the pond. You're right (and I'm right): Six of one...

Yes, Stone Mill is an A-B brand, and one for which they commissioned a particular grower, over a span of years, to produce organic barley because (they say) they weren't happy with the quality of the organic malt then on the market. Whether or not their reasoning is true, that's still a rather phenomenal dedication to beer.

I admit it, I'm still pissed at InBev for the changes I've perceived in Hoegaarden over the years. Back in the day, that was one of my epiphany beers, so it pains me to taste the watered down shadow of its former self it is today.

Evan Rail said...

Most people know about their legal vendetta against Budvar - from whom they stole the Budweiser name.

Pete, I'd like to agree but disagree here. Clearly A-B have a bizarre vendetta (by way of love affair) against Budvar. However, the facts make it hard to justify saying that A-B stole the Budweiser name from Budvar.

Instead, I'd point out (as I have elsewhere) that both A-B and Budvar have taken the Budweiser name from the original beer from the city once known as Budweis: the brewery now called Budweiser Bürgerbräu (aka Budejovicky Mestansky Pivovar, aka Samson), which has been brewing its Budweiser in Budweis since 1795.

If I'm not mistaken, A-B has been making its "Budweiser" since 1876. Not being anywhere near Budweis, they clearly have very little right to call their beer Budweiser.

However, Budvar was only founded in 1895.

A-B clearly stole the name from someone in 1876, but since Budvar wasn't around at that time, it's hard to argue A-B stole the name from Budvar.

The facts suggest A-B stole the name from Budweiser Bürgerbräu, not from Budvar.

There's an interesting linguistic twist here. As noted in Jeremy King's academic text "Budweisers into Czechs and Germans" (Princeton, 2005), Budvar was founded by Czechs in direct political and linguistic opposition to the local German owners of the brewery in Budweis.

It is thus extremely ironic that a Czech brewery — founded during the era of political and linguistic self-determination known as the Czech National Awakening — now finds itself fighting to be able to use a German name.

Budvar's use of the Budweiser name, while correct in geographic terms, clearly comes last in chronology. In terms of history, ethnicity, politics and linguistics, Budvar arguably has less claim to the name than either of the two earlier breweries.

Lew Bryson said...

Thank you, Evan Rail.

I've been arguing this for years: why would a Czech brewery want to identify with a German name? The whole Budweiser/Budvar argument is nowhere near as clear-cut as most would have us believe.

Well-put, Evan.

As for other arguments, I thought "Under the Influence" was a hatchet job, a piece of crap. The Busches may have given money to Hitler!!! Well, no, actually, they didn't. One of the Busches committed suicide because of a tragic secret! The, um, tragic secret was that he was dying of an extremely painful disease. And on and on.

"Citizen Coors", on the other hand, revealed how much of the Coors hatred is baseless (still plenty of room for some, like the brazen pollution of local waterways).

Do I want to see InBev buy A-B? Definitely not. I'd really rather not see any more big brewers buy any more brewers. Period. It's never about the beer, or the customer, or even the business. It's about the short-term interests of the shareholders. Someone needs to smack the shareholders in the head and tell them to stop wrecking businesses in the name of quick profits.

BLTP said...

I can't believe seemingly sensible people are spending so much time defending A_B they make piss flavoured rice beer and the world would be better off without them.

Pete said...

Some really thoughful comments on here - what the fuck's got into you, people? - and I stand guilty as charged of having over-simplified the issue.

The Budvar/Bud thing is trickier than it looks - I accept that.

But what angers me about it is that in 1894 Adolphus Busch stood up in a court of law and said the name had been chosen because he wanted to emulate the beer of Budweis (after long periods of German rule, most towns in the Czech Republic are still known at least as much by their German spelling as they Czech one). Despite the fact that this is a matter of legal record, for most of the last 100 years A-B have consistently denied it, which is just bollocks.

Yes, they registered the trade mark first. But a beer from Budweis should surely be able to call itself a Budweiser beer? If a nasty American orange cheese trade-marked the word 'cheddar', would you support them in their bid to stop cheeses made in Cheddar calling themselves Cheddar? Just because the trade mark owners had more money?

And while we're talking trade mark priority, in the Belgian Bush/American Busch beer case, guess who registered the tarde mark first? It wasn't the Americans. But this didn't stop them completely ignoring the key principle on which they're basing their Budweiser defence, just because it didn't suit them this time around.

Strip down their comments about 'protecting our investment' in these legal cases, and their defence essentially boils down to 'we've got more money than you'.

Also, before WWII they reached a legal agreement with the Czechs in the Bud case about an amicable sharing of the Budweiser trade mark. When the former Czechoslovakia disappeared behind the Iron Curtain, A-B simply ripped up this agreement, and went back on everything they had agreed to when the Czechs finally re-emerged and started trying to build an international brand.

So there.

On another note, I do sympathise with the North American posters who must be deeply unhappy at the prospect of their nation's biggest brewer falling into foreign hands. With the recent break-up of Scottish & Newcastle, every one of the 'big four' UK brewers is now foreign-owned. You have to move down to some relatively small companies before you get a British-owned one. You don't have to be a right-wing jingoistic twat to have a problem with this. You don't even have to like their beers. As I said at the end of my original post, you just know that in the relentless cycle of big brewer consolidation, the last person to benefit is the beer drinker.