The Mango Blogger

Bud & Bud Light Draft, Still on Happy Hour Mon-Friday 4-6:30 @ Alexandria Mango Mike's

From: Slate.com

An international beer war is brewing. On June 11,InBev, the behemoth formed by the 2004 merger of Brazilian brewer AmBev and Belgium-based InterBrew, offered a hefty premium to buy Anheuser-Busch, the dominant and iconic U.S. beer maker. InBev, which is run by a Brazilian, Carlos Brito, is eager to add Budweiser to its international portfolio of brands.

Anheuser-Busch's board and chief executive officer, August A. Busch IV, who represents the sixth generation of his family to run the brewer, dismissed the unwelcome offer as inadequate. Bud partisans, especially in and around St. Louis, have reacted with even more vigor. Both of Missouri's senators, Republican Kit Bond and Democrat Claire McCaskill, oppose the deal. McCaskillsays it is "patriotic" to do so. In a letter to Anheuser-Busch's board, he writes: "[D]o not hesitate to contact me to discuss ways that I and community leaders can work with you to improve the company without changing its ownership."

Opposition to InBev's takeover is rooted in national and regional pride and, perhaps more importantly, in overarching anxiety about the role of America in the global economy. So far this decade, two of America's big-three beer makers have been sold to foreign buyers. Second-place Miller was sold in 2002 toSABMiller, a company with roots in South Africa and headquarters in London. Canada's Molson acquired third-place Coors in 2005. (Combined, the big three have 78 percent of the U.S. market, with Anheuser-Busch holding down about 50 percent.)Officially, Anheuser-Busch's principal resistance is financial. On Thursday, it said that InBev's $65-per-share price "does not reflect the strength of Anheuser-Busch's global, iconic brands Bud Light and Budweiser, the top two selling beer brands in the world. … The proposal also undervalues the earnings growth actions that the company had already planned, which have significant potential for shareholder value creation; the company's market position in the United States, the most-profitable beer market in the world; and the high value of its existing strategic investments."

This rhetoric, which could merely be a negotiating ploy to get InBev to boost its offer, highlights the very reasons Anheuser-Busch is in danger of being taken over. Yes, the company does own iconic brands that have a global presence. But Bud is different from global brands such as Coca-Cola or McDonald's, which developed distinctly American consumer experiences that didn't face much resistance when they entered foreign markets. Today, they derive the vast majority of sales from abroad. But beer isn't an American invention, and in virtually every market, strong local brands proliferate. So while Anheuser-Busch sells Bud in scores of foreign markets and has linked up with brewers in Mexico, China, and India, the company has remained largely dependent on the massive U.S. market, where it has about a 50 percent market share. In the first quarter of 2008, 83 percent of the sales of Anheuser-Busch brands were in the United States.