ABI’s U.S. Volume Rises For First Time Since 2008, But Budweiser Still StrugglesFebruary 27, 2013
Anheuser-Busch InBev (ABI) is toasting its first volume growth in the U.S. in four years, with shipments to wholesalers up 0.7% for all of 2012 and accelerating to +2.7% in the fourth quarter. Growth was led by the rollouts of Bud Light Platinum and Bud Light Lime-a-Rita, as well as share gains by Michelob Ultra, Shock Top and Stella Artois. The company added, however, that “our share remained under pressure as a result of softness in Budweiser and our pricing strategy of closing the gap between sub-premium and premium brands within our portfolio.” Overall, ABI’s North American volume rose 0.6% to 125 million hectoliters for the full year.
As it hails the improving margin and volume progress in the U.S., ABI is being forced to counter charges that it waters down Budweiser, Michelob and other beers prior to bottling, thereby reducing alcohol content below the brands’ stated levels. Around a dozen related lawsuits on the matter are expected to be filed in various states, with lead attorney Josh Boxer asserting that high-level brewery employees confirm that the alleged watering-down process has been corporate policy since Anheuser-Busch was acquired by InBev in a $52 billion deal in 2008. ABI maintains that the charges are groundless.
Either way, the court challenge represents another obstacle to ABI’s continuing attempt to rejuvenate Budweiser in the U.S. market. The company said in today’s results announcement that Budweiser now sells more than half (51%) of its global volume outside the U.S. According to Impact Databank, Bud’s U.S. volume fell by roughly half, to 17 million barrels, from 2000 to 2011. The longtime U.S. market leader has for the past few years ranked third, behind stablemate Bud Light and Coors Light.
In other company news, multiple reports claim ABI is making progress in its discussions with U.S. regulators in its bid to acquire the 50% of Grupo Modelo it doesn’t already own. ABI and the Justice Department have agreed to suspend legal proceedings on the proposed $20.1 billion deal until March 19 while Justice examines ABI’s recent revision to the transaction, which would see ABI divest all production of Modelo beers headed to the U.S. market.
Tagged : ABI, beer, Budweiser