Cette Bud pour Toi

I'm not going to rehash what happen with InBev, Anheuser Busch, and the world headquarters in St. Louis. We already know what unpleasant things are in store.


What I am going to do is examine (in my own thought process, not that of an economist or business analyst, which I am neither) who is at fault.


Americans love to play the blame game. Why do you think there is so much civil litigation? I'm generalizing here, but as a whole, we never want to believe anything is our own fault. Now, I'm not saying Joe Schmoe American is to blame for the AB merger.....don't get that idea from this blog, but I am going to entertain myself today, while I am stuck at a hospitality desk in Haliburton, ONT, by discussing possible people to hold accountable.



Disclaimer: Please remember this is the rambling of my mind, and not any kind of political statement. I'm going to try and have fun with this sobering (pun intended) topic. In fact, just keep the phrase "tongue in cheek" in your mind as you read this.....



1. First, let's start with InBev.

They are certainly hated around St. Louis. It's an old story, the big bad corporate giant comes in and takes over the little guys. Sounds very Walmartesque. Except that AB is not exactly the little guy. And how do you think AB became the huge successful brewer they were, until about a month ago, when this all started? They bought up other breweries (and farms, and packaging companies, and theme parks, you get the idea) around the world.


Let's look at InBev's recent history.


In 2005, when Carlos Brito took over as CEO, the company was a mess. In fact, this article I read yesterday in a Canadian paper (I was intrigued with reading about the merger from a source without an indignant American spin) said that when he took over InBev "he installed some harsh Brazilian financial discipline on a bloated company of French-fry-eating Belgiums." In a very short time, he turned things around, and made InBev very profitable. I'm not condoning his tactics, but bottom line, he is successful as a CEO. In my opinion, if InBev were an American company we were talking about, and not the evil raper of Americana, they would have been at the top of Fortune Magazines "Movers and Shakers" list.



2. Let's blame Anheuser Busch


After all, the Busch family is who sold off so much of the stock for capital a few years back. Also, the company has not been overly successful (if you measure success in terms of growth) or profitable since 2000. The stock price has been stagnant, leaving major holders with 8 years of nothing more than meager dividends. In fact, government bonds have had similar returns as AB stock in the millennium. Anheuser Busch has not really been able to lower operational costs, which is usually a company's prerogative when growth is minimal. Which brings me to the next player in my blame game......



3. Let's blame all the AB unions!

Everyone's favorite target. The big communist unions. Keeping operational costs high. When every other worker in the US is dealing with no raises, higher copay health care costs, and uncertain job security in this economy, the unions are still insisting that their employees are above all those effects. Now, AB was always very good to their employees, especially their union employees. I am not an expert on union relations, or labor law, but I will say that in my experience, the AB packagers, line employees, and pretty much all brewery workers had a pretty good deal. They were well paid. There were very few, if any, layoffs. They never actually had a good reason to strike for at least 8 or 9 years, and the last time a strike was eminent, it was not about pay, working conditions, or pensions....it was about the increased hiring of part time workers. And everything settled, the strike never happen. So, here's the unsaid assumption turned into a question...if the unions were not so strong at AB, would costs have been significantly reduced, and the company more profitable? But then again, a very simplistic question, would St. Louis people (or people in the 12 other cities with AB breweries in the US) have been so ridiculously and emotionally supportive of a company that wasn't really that great to its employees?



O.K. Who's next......


3. The American Drinker.


Americans are just not drinking as much beer anymore. This never really occurred to me until I was talking one day to a cousin of mine who works in marketing for AB, and he pointed it out. Then I realized, at least in my experience, he was totally right.


When we were in college, everyone drank beer. At frat parties, in the bars, at sporting events, for the most part, we, and everyone around us, were drinking beer. Yes, we would do shots sometimes....and drink fancy cocktails on occasion. And yes, there were those few people (mainly girly girls who we made fun of) who didn't like beer. However, beer was always the staple. It was cheap, easy to transfer, came in its own container, and you always knew what you were getting. (no complaints about bars making it too weak or too strong)



After college, I started noticing a change to that. The TV networks started letting liquor advertise, so it was not all beer ads anymore. The vodka companies starting making their own bottled, flavored drinks that were heavily promoted. Old school, old fashioned, more grown up cocktails like gin and tonic, and martinis were trendy again. I know it's weird to think of a martini as old fashioned, but before the late nineties, early 2000s, the only people drinking them were ladies lunching, and business men in suits at a bar after work.



The biggest change in drinking habits I saw after college, and in the past decade, was the popularity of wine. People were drinking it a lot more, and everyone was trying to educate themselves at least a little. Before, you drank wine when you were out to a nice dinner, or at a wedding. Now, people were drinking it at bars and clubs.



Little did I know that the changes in drink choices I saw in my generation were actually a reflection of the changes in drinking habits of the entire country. Well, Anheuser Busch has seen, and is still dealing with, the fallout from the reduction of beer drinkers, and beer consumption in the US.



This is where I think common sense is missed with the American consumer. To put this very simply, we want iconic American companies to be successful, but a lot of us are choosing not to purchase their products. I equate this to the collapse of the American car industry....no one wants the American car companies to go bankrupt, and layoff thousands and thousands of people, but when we go to buy cars, we are not, for whatever reasons, choosing Fords, Chevys, or Chryslers.

And my next victim of the blame game on this issue.....

4. The Current Administration and its Economic Policy

Why not blame W? He's an easy target for anything these days. Now I know that presidential administrations are not necessarily responsible for recessions and economic turns that occur during their tenor. I know that there are a lot of economic issues and decisions that could go back years and decades to bring us to where we are now, but let's face it, that is not how the American public thinks.

History has proven that we credit, or blame, the economic situation of the country during a certain era on the president who is in power at that time. That is why Clinton is credited with balancing the budget, and a healthy, booming economy. We still refer to the wealth of the eighties as "The Reagan Years.", and we blame Carter for the economic disaster that was the late seventies.

That said, I want to point out the main reason that InBev was able to even attempt the takeover of Anheuser Busch: the devaluing of the American Dollar. It was cheap in Euros. And like it or not, in the 7+ years that Bush has been in power, the US dollar has been on a tailspin, and nothing has been done to stop it. Instead we have spent billions on an unnecessary war. We have borrowed ridiculous amounts of money from countries like China to fund an obscene governmental spending spree. And, I know this will make me unpopular, but what do we do when we have this unbelievable deficient, and the fear of radical inflation looming?....... we borrow even more money to fund the economic stimulus package that has no chance of actually stimulating our economy.

I don't mean for this to sound conspiracy theoryish or anything but, sometimes I feel like our country's economic house of cards could crumple at any time. In fact, a few cards have already fallen: skyrocketing gas prices, devalued currency, the bursting of the real estate bubble, and now the vulnerability of our most treasured American owned corperations.


5. When all else fails, lets just blame the French.

We hate them anyway. I know that Belgium is a completely different country, but let's face it.....it's near France. They speak French. I say we just blame those stupid, snobby, self righteous, never wanting to fight, but always expecting us to bail them out people of France. Flambe that, Mon amis.



O.K. This is the end of my fun blame game....I think I have made my point about some of the possible factors that brought St. Louis to the confused, post-AB city we will now have to just wait and see what happens to. The end of an era, if you will.

The scary part is that this is just the beginning. I heard something the other day that Coca Cola Inc. is in a similar financial situation as AB was. Definitely not losing money, but not making as big a profit margin as they had in the past. They have been very slowly losing market share. Oh, and their stock had been pretty stagnate for the last few years. Wow, this end of an era could reach further that just St. Louis........

So now that I have thoroughly depressed everyone, lets end on some lighter news....

Isn't it rockin' that Brad and Angelina named one of their kids Vivienne!!!! I was so excited when I heard that. Awesome!