A-B Inbev: Consumers up in arms
(Originally published in the Telegraph on 7/14/08)
ALTON - InBev's pending buyout of Anheuser-Busch has River Bend bar owners and beer drinkers seeing more red than the label on a Budweiser longneck.
Anheuser-Busch Cos. Inc. agreed to the sale on Sunday at a cost of $52 billion to the Belgian-based brewery and maker of beers such as Beck's, Stella Artois and Hoegaarden. At $70 per share - a $5 increase over the offer Busch rejected in June - shareholders will reap benefits of the merger, which will create a new entity called Anheuser-Busch InBev.
Still, many in the area fear the buyout will change the historic St. Louis brewery's business practices in ways that could harm the community.
Area residents bristled at the thought of the loss of jobs and charitable donations - some considering boycotting as a means of protest.
"I don't like being bought by the Belgians," said Star Diserens, owner of Alton Sports Tap. "I think the saddest thing will be that we'll probably lose Grant's Farm, Busch Gardens and all the charity that A-B does. I don't imagine InBev will care about Grant's Farm and the Clydesdales."
"I realize the stockholders will benefit, but I don't like seeing foreign companies buying out American companies," said Kenneth Smith from Houston, Ala., originally from Rosewood Heights. "I've never seen a takeover where the employees didn't take it in the shorts."
"I think it's a big mistake," Alton resident Todd Ontis said. "All the charities that Anheuser-Busch supported will probably be eliminated.
"Nobody buys a company to not trim the fat," and donations would be the first expense cut in order to lower overhead, Ontis said.
Ontis threatened to quit drinking Anheuser-Busch products if he found out InBev raised prices or significantly cut its charity work.
"Either or, I'll be done," he said.
"I would not still drink Bud if the price went up," Chris Witt of Brighton said. "Why should the price go up? It's still Anheuser-Busch."
Mike Mehilos, owner of Mike's Ten-Pin Lounge in Alton, suspects some union workers will boycott Budweiser products.
"It's another shoot-down for American workers and union guys," Mehilos said. "The local economy is bad enough as it is, and Anheuser-Busch is about the biggest employer in St. Louis."
Diserens said she expects beer prices to climb.
"Every time there's a buyout, and with pricing the way it is, there's always an increase," she said.
Anheuser-Busch would have raised prices by September with or without the merger, said Tom Halvorsen, co-owner of Norb's Tavern in Alton.
"Hops and wheat have gone up," requiring Anheuser-Busch to pour more money into raising crops to produce beer, Halvorsen said.
Some diehard fans vow to keep buying Bud.
Martin Keemey from Brighton, a customer at Roper's Regal Beagle in Godfrey, said he would drink Budweiser "as long as they don't change their recipe.
"The only reason I would be (upset) is if people lost their job over it," Keemey said, admitting he did not want to switch to Miller products.
"When you come to the St. Louis area, you drink Bud," Smith said. "What would a Cardinals (baseball) game be like without hearing, ‘Get your Bud here?'"
"(Anheuser-Busch) has been an American icon, and it still is, as far as I'm concerned," Halvorsen said. "Ninety percent of the people (who visit Norb's) are A-B drinkers. I'm sure we'll lose a couple, but the product is the same, the taste is the same. It shouldn't have any effect on business whatsoever."
Bar owners said they believe InBev will maintain the current distribution scheme.
"It's such a structured company that, unless they change the structure, I don't think it's going to make any difference as far as delivery goes," Diserens said.
The sale still is pending. Government regulations require Anheuser-Busch to hold a stockholders' vote and go under a customary review, but "the combination should not encounter any significant regulatory issues, and is expected to be completed by the end of 2008," Sunday's Anheuser-Busch news release said. InBev's controlling shareholder already pledged to vote in favor of the buyout.