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 of public affairs for the National Beer Wholesalers Association (NBWA). According to NBWA and Beer Institute data, U.S. brewing provides nearly 47,000 jobs that pay more than $4 billion in wages, while 91,000 wholesaling jobs pay $5.6 billion.Anheuser-Busch has three African American-owned U.S. distributors, says Patrick Beauchamp, president of Compton, California-based Beauchamp Distributing Co. (No. 65 on the BE Industrial/service 100 list with $65.2 million in revenues). Beauchamp Distributing and a South Dakota company are the only two black-owned Miller distributors, Beauchamp says.
Ces Butner owns Horizon Beverage Co., an Oakland, California, Anheuser-Busch distributor with sales of $24.7 million. Yusef and Jonathan Jackson, sons of civil rights leader Jesse Jackson, are part owners of River North Sales and Service, Chicago’s largest Anheuser-Busch distributorship. The third black-owned Anheuser-Busch distributor is in Memphis.
Black-owned beer distributors tend to be small. Would they be swallowed by larger distributors after an acquisition? Beauchamp says he can’t speak for Anheuser-Busch, but
because that brewer’s three black distributors are located in predominately African-American inner cities, he doubts the company will be asking them to consolidate with someone else. There was no consolidation of Miller’s two black-owned distributors after the brewer was acquired in 2002.In the late 1970s and early 1980s, there were up to 14 black-owned beer distributors. “It’s such a tough fight, and then you have a chance to maybe sell out for $20 million or $25 million, it’s pretty hard to turn that down. I’ve turned down offers maybe 50 times,” says Beauchamp, whose daughter, Stacee, is set to succeed him at his 37-year-old business. Given the opportunity, black-owned beer distributors could do a very good job for brewers’ products in some urban areas, Beauchamp says. “I hope that even with this InBev move, Anheuser-Busch-the biggest of all the breweries here in the United States-appoints some African Americans,” says Beauchamp. “They certainly have the wherewithal to make it happen.”