In "The Plot to Destroy America's Beer," Businessweek's Devin Leonard chronicles the rapacious AB InBev, a multinational, publicly traded giant corporation that is buying up American (and European, South American and Asian) family owned breweries, cutting them to the bone, lowering the quality of the ingredients used, shutting down breweries that have been running for more than a century, laying off thousands of workers who've given their lives to the companies AB InBev acquired, and changing the recipes to make all the different sorts of beer once on offer taste more or less the same.
InBev was never a sentimental company. Shortly after the merger, it shuttered the 227-year-old brewery in Manchester, U.K., where Boddingtons was produced. It encountered more resistance in 2005 when it closed the brewery in the Belgian village of Hoegaarden, from which the popular white beer of the same name flowed. InBev said it could no longer afford to keep the brewery open. After two years of protests by brewery workers and beer aficionados, it reversed itself. Laura Vallis, an AB InBev spokeswoman, says Hoegaarden exports spiked unexpectedly. “The brand’s growth since is positive news for Hoegaarden and for consumers around the world who enjoy it,” she says.
Yet some Hoegaarden drinkers say the flavor of the beer changed. “I think now it’s not as distinctive tasting,” says Iain Loe, spokesman for the Campaign for Real Ale, an advocacy group for pubs and beer drinkers. “You often see when a local brand is taken over by a global brewer, the production is raised a lot. If you’re trying to produce a lot of beer, you don’t want a beer that some people may object to the taste of it, so you may actually make the taste a little blander.” (Vallis’s response: “The brand’s commitment to quality has never changed.”)
Despite occasional setbacks, Brito’s assiduous focus on the bottom line produced the intended results. InBev’s earnings margin (before taxes and depreciation) rose from 24.7 percent in 2004 to 34.6 percent in 2007. Its stock price nearly tripled. Then he started running out of things to cut. In early 2008, InBev’s results plateaued, and its shares stumbled.
Investors hungered for another deal. Brito complied with the takeover of Anheuser-Busch. He had intimate knowledge of his target: America’s largest brewer had distributed InBev’s beers in the U.S. since 2005. Anheuser-Busch’s CEO, August Busch IV, the fifth Busch family member to run the company, was no match for La Máquina and his mentor, Lemann, who was now an InBev director. Anheuser-Busch’s board of directors accepted InBev’s bid of $70 a share on July 14, 2008.
The Plot to Destroy America's Beer
(Thanks, Fipi Lele!)
