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AB InBev Cost Savings are Starting to Dry Up

August 14, 2009

Analysis of:AB InBev Signals Profitability Gains Will Slow as Sales Shrink | www.bloomberg.com

InBev's costly acquisition of Anheuser Busch had to be offset with as many cost cutting measures as possible without negatively effecting sales. They have already reduced advertising expenditures, reduced the workforce, and eliminated duplication of processes. It remains to be seen how much more cost cutting can be done in light of declining sales in many import and domestic brands.

The Perfect Storm Drowns Brewer's Profits

February 23, 2009

Analysis of:Heineken, Carlsberg to cut costs amid ‘perfect storm’ in beer market | www.thegrocer.co.uk

Sales increased, but profits sharply declined. A combination of market factors have led to the downward pressure on profits. Cost cutting becomes the primary strategy to survive the storm

U.K. Pubs Suffer as a Result of Higher Beer Taxes

January 22, 2009

Analysis of:U.K. Pubs Close at Record Rate on Recession, Higher Beer Taxes | www.bloomberg.com

U.K pubs closed at a rate of 39 a week the second half of 2008 after the government raised taxes proving the regressive nature of taxes on specific industries. All told, 1973 pubs closed their doors in 2008 in light of the recession and tax increase. Government raised taxes 17% which has obviously had a extremely negative impact on the pub industry in the U.K

SABMiller is not Immune to the Global Recession

January 19, 2009

Analysis of:SABMiller Reports Unexpected Drop in Beer Shipments | www.bloomberg.com

SABMiller shipments declined 1% this past quarter caused by declines in many of their core markets in developing countries. SABMiller gets 80% of it's profits from sales in developing countries . MillerCoors shipments in the U.S. fell 2.3% on category weakness and aggressive pricing.

ABInBev Cuts 1400 Jobs in the U.S.

December 22, 2008

Analysis of:Anheuser-Busch-InBev will cut 1,400 U.S. jobs | www.msnbc.msn.com

Less than one month after InBev closing on their deal to buy Anheuser-Busch, they are eliminating 1400 jobs from the newly formed company, on top of the 1000 employees that were already given an early retirement package. Most if not all the jobs are being cut in light of duplication of services in the IT, engineering, and other corporate areas, however no Union jobs will be lost. InBev is also living up to their reputation to maintain a tight control over costs. I would anticipate further cuts, especially in the area of field sales.

Craft and Imported Beers Continue to Increase Sales in an Overall Flat Market

December 9, 2008

Analysis of:Craft Beer Sales Remain Strong | www.bierkraft.com

While the overall growth of the U.S. beer industry remains flat, Craft and Import brands continue to show solid sales growth. Consumption patterns continue to shift towards higher end brands. Craft and Import sales are up 15% year to date at Bierkraft, a New York City beer retailer that carries over 1600 different brand selections in their store.

Beer Drinker's Lawsuit - This Bud Will Still Be For You

October 10, 2008

Analysis of:Beer drinkers sue to stop InBev-Bud merger | www.msnbc.msn.com

A small group of beer drinkers band together to try and stop the largest merger ever in the beer industry by claiming it would create a monopoly and raise beer prices. Anheuser-Busch's current 50% market share already enables them to influence domestic pricing. The combination of InBev and AB does not alter the current pecking order of domestic breweries.

Miller Lite's Great Taste, Less Filling tagline revived

August 25, 2008

Analysis of:Miller Lite revives ‘Great Taste, Less Filling’ ads | www.msnbc.msn.com

The classic ad campaign for Lite is brought back to help grow sales. An original tagline," Great Taste,Less Filling"  became the identity of the brand and led to it's original success. Faced with declining sales,domestic beer companies are left to battle each other to try and gain market share.

InBev snags Anheuser- Busch: What does this mean for current AB Wholesalers?

July 15, 2008

Analysis of: InBev snags Anheuser-Busch and its marketing clout | news.yahoo.com

For InBev to cut costs they will need Wholesaler consolidation through out the U.S. Market. Will current InBev wholesalers be preferred over the existing AB wholesaler in a specific markets? Marketing dollars are not being cut, but will they be reallocated to higher margin brands?

Anheuser- Busch Fights to Remain Independent

June 30, 2008

Analysis of:Anheuser details plan to raise value | money.cnn.com

 Does Anheuser-Busch have the ability to go it alone in light of Inbev's buyout offer?  Will the changes they implement actually increase shareholder's value?  What is the long-term picture for the U.S. beer industry?

InBev's offer to buy Anheuser - Busch: A Wholesaler's Perspective

June 12, 2008

Analysis of:InBev Offers to Buy Anheuser-Busch for $46.3 Billion in Cash | www.bloomberg.com

Key concerns for Anheuser- Busch wholesalers   1) What long-term implications does this have for the current three tier system of distribution? 2) What is InBev's master plan for consolidation of existing wholesalers in the marketplace? 3) What will be Inbev's priorities be in regards to brand management. How will they allocate their resources?

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