Change May Be Brewing

The Budweiser and Bud Light family of beer have a new home with the $52 billion takeover of one of America’s best-known beer maker, Anheuser-Busch, by a Belgian beverage conglomerate. The corporate blending of St. Louis, Missouri-based Anheuser-Busch into Belgium-based InBev will create a top, world-class brewer and one of its five biggest consumer products companies. Anheuser-Busch/InBev will generate $36.4 billion in annual revenues.

But for the people whose livelihood depends on the “King of Beer,” what will the deal mean? African Americans are employed in representative numbers in the unionized, hourly sector of the beer industry, says David White, a spokesman for the International Brotherhood of Teamsters, the largest union within the U.S. beer industry. Teamsters represent more than 7,000 workers at Anheuser-Busch’s 12 U.S. breweries, and 2,000 Miller employees at three of its six U.S. breweries.

Teamster production employees get an average pay of about $25 per hour, plus excellent health benefits and pensions. But if Miller’s 2002 acquisition by South African Breweries Ltd. (SAB) serves as an example of what foreign ownership will bring, the fizz is in danger of going flat for Anheuser-Busch’s unionized employees.

SAB’s takeover of Miller highlighted production streamlining techniques. “These operational changes are reducing the net number of employees at SABMiller, as those retiring are not being replaced with new hires at the same rate. SAB is using extraordinarily high demands for overtime work to get more productive capacity out of its production employees. Miller is also aggressively attempting to shift health insurance costs to its employees,” White says.

InBev’s reputation among unionized workers in other countries is not good, White says. “Our main priority is to preserve the jobs, healthcare coverage, and retirement benefits of our members who work in Anheuser-Busch facilities and who warehouse and deliver Anheuser-Busch products,” White says. “We intend to do whatever it takes to make sure that we protect the Anheuser legacy our members helped build, including safeguarding good American jobs at Anheuser-Busch and the communities that depend on those jobs.”

St. Louis will become the headquarters of InBev’s North American operations and remain the global base of the Budweiser brand. InBev spokeswoman Monika Driscoll says the company is committed to continuing Anheuser-Busch’s strong presence in St. Louis. “Because all U.S. breweries will be maintained, we believe there will be little or no impact on union jobs,” Driscoll says. “InBev intends to build on Anheuser-Busch’s reputation as a high quality employer and a responsible corporate citizen and looks forward to participating as a member of the St. Louis community.”

There may, however, be some managerial reductions. Before its acquisition, Anheuser-Busch devised a strategic downsizing plan outlining early retirement, pension change, and increased employee and retiree sharing of health-care costs for salaried employees. This downsizing plan will stay intact. The acquisition is expected to close by the end of 2008.

The nation’s 75-year-old system of bringing beer to market operates in three tiers: brewers, distributors, and retailers, says Rebecca Spicer, vice president