Comment: Beer price rises will test Obama's tolerance
27 August 2009 Source: breakingviews.com
Both Anheuser-Busch InBev - purveyor of the president's favorite tipple - Bud Light - and MillerCoors are raising prices at the same time, during a recession and while beer demand is slumping. With an 80% market share between them, it almost begs for an anti-trust review of the industry.
While the increases are not unusual or unexpected, they still raise a red flag. Both companies typically re-adjust the price tag on a six-pack every year to reflect changes in the costs of, say, barley or hops. But the ability of the two big brewing groups to do so now, while their customers are hurting most, highlights the tremendous pricing power that has accompanied consolidation in the industry.
While Anheuser-Busch, acquired last year by Belgium's InBev, has long held a dominant share of the US market, the number of big players in the industry has steadily decreased over the years. From 1947 to 1995 the number of beer companies fell by over 90%. Though a surge in craft brewers followed, few of them competed directly with mass-market suds like Budweiser and Miller.
That was ok so long as the big three - Anheuser, Miller and Coors - were at each other's throats. And boy, were they. After South African Breweries bought Miller in 2002 it set out to nab market share from Bud. Its bigger rival responded by slashing prices, which the others were then forced to match. This competition fostered a better outcome for consumers - indeed, the summer of 2005 was a beer drinkers' dream.
That's all changed. Miller and Coors kicked off a joint-venture last year that combines the market powers of the second and third largest players. InBev, meantime, has no stomach for a price war following its $52bn debt-financed splurge on Anheuser. So despite slumping appetite for beer and tough times, prices are going up.
The Obama administration is taking a tougher line on monopolistic behaviour. Department of Justice anti-trust head Christine Varney has even signalled a willingness to re-examine deals that were approved under the previous, more permissive, Bush administration.
Taking on Big Beer might be politically popular. Moreover, there's precedent for doing so. Fifty years ago, the DOJ sued to prevent the merger of Pabst, then the 10th largest brewer with the 18th biggest, Blatz. The case went to the Supreme Court, which in 1966 ruled the deal was anti-competitive and forced Pabst to divest Blatz.
That's not an outcome Molson Coors, SABMiller or AB InBev shareholders would toast with pleasure.
By Aliza Rosenbaum and Rob Cox
Breakingviews.com is the world's leading source of agenda-setting financial insight. Breakingviews.com has 22 correspondents and columnists based in London, New York, Hong Kong, Paris, Washington, San Francisco and Madrid. Its aim is to become the lingua franca for the global financial community.
Thursday, August 27, 2009
Price Rise
Brewers Raising the Bar on Beer Prices
Thursday, 27 August 2009
ST. LOUIS—U.S. beer drinkers thirsty for lower prices are in for a disappointment, brewers say.Beer consumers will soon be socked by higher prices, as Anheuser-Busch InBev, the world's largest brewer and maker of Budweiser, and other producers around the world have announced price increases, CNNMoney.com reported Wednesday.In a statement, the U.S.-Belgian company said: "We plan on taking price increases on a majority of volume and in a majority of markets this fall. The increase helps cover some input costs," adding that prices will rise "across different price tiers," including its low-end brands.CNNMoney.com said MillerCoors, maker of Miller Lite, Coors Lite and Blue Moon, will also raise prices in certain markets."What is going to be a little bit out of the ordinary is that (prices) are going to be able to go up less than in a normal year because economic conditions are tighter," Benj Steinman, editor of industry trade publication Beer Marketer's Insights told the Web site.Anheuser-Busch InBev reported this month that total beer volumes were down 1.5 percent in the second quarter compared with the year-earlier period.Copyright 2009 by United Press International
Thursday, 27 August 2009
ST. LOUIS—U.S. beer drinkers thirsty for lower prices are in for a disappointment, brewers say.Beer consumers will soon be socked by higher prices, as Anheuser-Busch InBev, the world's largest brewer and maker of Budweiser, and other producers around the world have announced price increases, CNNMoney.com reported Wednesday.In a statement, the U.S.-Belgian company said: "We plan on taking price increases on a majority of volume and in a majority of markets this fall. The increase helps cover some input costs," adding that prices will rise "across different price tiers," including its low-end brands.CNNMoney.com said MillerCoors, maker of Miller Lite, Coors Lite and Blue Moon, will also raise prices in certain markets."What is going to be a little bit out of the ordinary is that (prices) are going to be able to go up less than in a normal year because economic conditions are tighter," Benj Steinman, editor of industry trade publication Beer Marketer's Insights told the Web site.Anheuser-Busch InBev reported this month that total beer volumes were down 1.5 percent in the second quarter compared with the year-earlier period.Copyright 2009 by United Press International
Tuesday, August 18, 2009
Gluten free
Gluten-Free Beer Can Be Labeled As Such, FDA Says
Tuesday, 18 August 2009
When is a beer not a beer? When it's gluten-free.And as of Monday, the Alcohol and Tobacco Tax and Trade Bureau, which regulates the labeling of beer, wine and spirits, handed off regulation of said cold, sudsy brews to the Food and Drug Administration.That's good news for the nation's estimated 2 million sufferers of celiac disease, for whom consuming any kind of gluten can cause chronic diarrhea, arthritis, bone loss and a host of other symptoms. Their immune systems react to gluten, a protein found in wheat, rye and barley, which causes inflammation in their small intestine and interferes with the absorption of nutrients.Beers brewed the traditional way, with malted barley, contain gluten. But small craft brewers and then Anheuser-Busch began making beer from malted sorghum, an African grain, and sometimes rice. Both are gluten-free. That was great for celiacs but didn't fit in the Federal Alcohol Administration Act of 1935's definition of beer, which was a beverage brewed from malted barley and other grains.On Monday, the FDA issued new guidelines covering non-barley beers. To the benefit of the one in 133 Americans who can't eat anything containing gluten, the beverages can now be labeled gluten-free once they've been tested by the FDA."For the longest time, I couldn't put 'gluten-free' on the label, because there wasn't a definition" under previous regulations, says Russ Klisch, whose Lakefront Brewery in Milwaukee makes a popular sorghum beer, New Grist.Gluten-free beer makes up less than 0.1% of the beer market, says Paul Gatza of the Brewers Association in Boulder, Colo. The biggest players are Anheuser-Busch's Red Bridge, Klisch's Lakefront in Milwaukee and Bard's Tail of Norwalk, Conn., he says.Celiacs have been buying these gluten-free beers for years, says Elaine Monarch, executive director of the Celiac Disease Foundation in Studio City, Calif. But accurate labels will be nice, and the new FDA regulations may make it easier for European gluten-free beverages to enter the market, she says.Copyright 2009 USA TODAY, a division of Gannett Co. Inc.
Tuesday, 18 August 2009
When is a beer not a beer? When it's gluten-free.And as of Monday, the Alcohol and Tobacco Tax and Trade Bureau, which regulates the labeling of beer, wine and spirits, handed off regulation of said cold, sudsy brews to the Food and Drug Administration.That's good news for the nation's estimated 2 million sufferers of celiac disease, for whom consuming any kind of gluten can cause chronic diarrhea, arthritis, bone loss and a host of other symptoms. Their immune systems react to gluten, a protein found in wheat, rye and barley, which causes inflammation in their small intestine and interferes with the absorption of nutrients.Beers brewed the traditional way, with malted barley, contain gluten. But small craft brewers and then Anheuser-Busch began making beer from malted sorghum, an African grain, and sometimes rice. Both are gluten-free. That was great for celiacs but didn't fit in the Federal Alcohol Administration Act of 1935's definition of beer, which was a beverage brewed from malted barley and other grains.On Monday, the FDA issued new guidelines covering non-barley beers. To the benefit of the one in 133 Americans who can't eat anything containing gluten, the beverages can now be labeled gluten-free once they've been tested by the FDA."For the longest time, I couldn't put 'gluten-free' on the label, because there wasn't a definition" under previous regulations, says Russ Klisch, whose Lakefront Brewery in Milwaukee makes a popular sorghum beer, New Grist.Gluten-free beer makes up less than 0.1% of the beer market, says Paul Gatza of the Brewers Association in Boulder, Colo. The biggest players are Anheuser-Busch's Red Bridge, Klisch's Lakefront in Milwaukee and Bard's Tail of Norwalk, Conn., he says.Celiacs have been buying these gluten-free beers for years, says Elaine Monarch, executive director of the Celiac Disease Foundation in Studio City, Calif. But accurate labels will be nice, and the new FDA regulations may make it easier for European gluten-free beverages to enter the market, she says.Copyright 2009 USA TODAY, a division of Gannett Co. Inc.
Wednesday, August 12, 2009
On the way to zero
Anheuser-Busch Debuts 55-Calorie Beer
Wednesday, August 12, 2009
St.Louis - Anheuser-Busch announced the launch of Select 55, touted as the world's lightest beer, in select test markets throughout the US. Described by the brewer as a smooth, golden lager with 55 calories and 1.9g carbohydrates per each 12-ounce serving, Select 55 answers a growing demand among a segment of drinkers who are seeking lower-calorie alcohol beverages to complement their busy lifestyles.
Whether adult drinkers are looking for light refreshment after a busy day or if they simply enjoy delicious calorie-conscious foods and beverages, Select 55 offers an unparalleled clean, crisp flavor with fewer calories any other beer currently available, according to A-B.
"Select 55 is ideal for adults who want to enjoy beer without feeling guilty about the calories," said Pat McGauley, Vice President of Innovation, Anheuser-Busch, Inc. "Perfect for a variety of occasions, adults will enjoy Select 55 at a double-header baseball game, while grilling on a hot summer day or relaxing a home with friends."
Featuring a light, golden color, Select 55 is made with caramel malts and a blend of imported and domestic hopping. Brewed to complement the full flavor of Budweiser Select, Select 55 features a unique recipe that gives the beer its crisp finish with aroma notes of toasted malt and subtle hopping.
Select 55 is available in 15 markets across the country including: Tampa, Ft. Myers, Orlando (FL), Chicago, Peoria (IL), Louisville, Green Bay, Bloomington (IN), Cincinnati/Dayton, Des Moines (IA), San Diego, Dallas, Austin, Wichita Falls (TX) and Arizona.
Brewed at Anheuser-Busch's St. Louis brewery, Select 55 is available in 12-ounce, clear signature crown glass bottles in 6- and 12-packs, and 12-ounce aluminum cans in 12- and 18-packs.
Copyright (C) 2009 PRNewswire. All rights reserved.
Wednesday, August 12, 2009
St.Louis - Anheuser-Busch announced the launch of Select 55, touted as the world's lightest beer, in select test markets throughout the US. Described by the brewer as a smooth, golden lager with 55 calories and 1.9g carbohydrates per each 12-ounce serving, Select 55 answers a growing demand among a segment of drinkers who are seeking lower-calorie alcohol beverages to complement their busy lifestyles.
Whether adult drinkers are looking for light refreshment after a busy day or if they simply enjoy delicious calorie-conscious foods and beverages, Select 55 offers an unparalleled clean, crisp flavor with fewer calories any other beer currently available, according to A-B.
"Select 55 is ideal for adults who want to enjoy beer without feeling guilty about the calories," said Pat McGauley, Vice President of Innovation, Anheuser-Busch, Inc. "Perfect for a variety of occasions, adults will enjoy Select 55 at a double-header baseball game, while grilling on a hot summer day or relaxing a home with friends."
Featuring a light, golden color, Select 55 is made with caramel malts and a blend of imported and domestic hopping. Brewed to complement the full flavor of Budweiser Select, Select 55 features a unique recipe that gives the beer its crisp finish with aroma notes of toasted malt and subtle hopping.
Select 55 is available in 15 markets across the country including: Tampa, Ft. Myers, Orlando (FL), Chicago, Peoria (IL), Louisville, Green Bay, Bloomington (IN), Cincinnati/Dayton, Des Moines (IA), San Diego, Dallas, Austin, Wichita Falls (TX) and Arizona.
Brewed at Anheuser-Busch's St. Louis brewery, Select 55 is available in 12-ounce, clear signature crown glass bottles in 6- and 12-packs, and 12-ounce aluminum cans in 12- and 18-packs.
Copyright (C) 2009 PRNewswire. All rights reserved.
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