Jan 222019
 

As I write this blog, the governmental shut-down continues.  In fact, this governmental shut-down is now the longest in history.  We all know that such action means the TTB label approval process has ceased.  It has been reported that for every day the TTB is closed, three additional days are added for the label approval process.

Obviously, one would think that this situation is not good for the industry. There are some, however, that believe this shut down might not be so bad considering the markets are not currently being flooded with new or updated beers.  Many of the craft brewers survive by selling seasonal or one-off products with new or different flavors.  The bigger brewers are probably in good shape as their label approvals were completed last year, however, plans for later this year or next could suffer.

While the industry sits on new brands, more and more small local and regional crafts are closing their doors.  As noted in last week’s post, many of these financially strapped breweries are no longer able to raise or generate the funds needed to expand and/or stay in business.  Some industry pundits believe this is the long overdue industry shakeout that many have been expecting.

So the question in early 2019 is:  how is the beer wholesaler managing the uncertainty and turnover in brands in their respective markets?  It is no secret that the craft’s biggest issue with wholesalers is the lack of focus given to crafts.  As many crafts/breweries are closing and many brands are tabled, we see that the current environment is a personification of this lack of focus.

When a craft closes its doors, for whatever reason, how does a wholesaler retain and/or change that draft handle in their market?  If the wholesaler is an AB or MC distributor, is that handle converted to one of the AB or MC craft brands and at the expense of the local crafts?  Is such action fair to the locals who did what the wholesaler asked by putting people on the street and hustling chain authorizations?  Crafts experiencing such a situation could feel not only left out but perhaps even believe they have been lied to.

A craft brewer who has dedicated people, resources, money, and commitment to a wholesaler may perceive that they have no future with that wholesaler if that brewer is not on a wholesaler’s priority list.  If this is true, then that brewer has few options.

This is a no-win scenario for the wholesaler, brewer, and the consumer.  It is easy to believe that the wholesaler will support their “rainmaker” supplier but then not focus on their struggling brands or those that are more brewery-supported.  Either business model has a similar effect.

As more and more craft breweries close, along with the coming flood of new labels and brands, wholesalers should look at the ensuing push-back from their suppliers.  It will soon be coming to a head.

Action expresses priorities.

 Posted by at 7:00 am
Jan 152019
 

In the late 1970s and early 1980s, the prime rate for loans was in the mid-teens and prospective homeowners faced interest rates of up to15%.  Because the cost of money was so expensive, most people interested in purchasing a home or business looked for creative financing options, which typically meant the owner carrying back all, or part of the loan. Even at that, one would have been lucky to obtain rates lower than two or three points of prime.

Because an investor could invest in short-term CDs with no risks, it was unlikely that anyone during this time period would consider purchasing a beer distributorship with high rates.  This is exactly the position I was placed in when purchasing the Schlitz distributorship in South Texas.  Of course, this was also the era of highly leveraged buy-outs.  Purchasing any business with little to no equity, coupled with loans that were tied to the prime rate plus-one led to a road map for disaster.  While the distributorship had positive cash flow, the interest on the loans was too much to handle.  The interest rates, the selling of Schlitz to Strohs, and the unexpected collapses in the market, eventually quelled that opportunity.

On December 21st, Big Bend Brewing Company announced that they were closing their doors.  Big Bend, which opened six years ago, is located in the far West Texas town of Alpine.  While Big Bend enjoyed success in West Texas, the cost of freight across the state put the brewery at a disadvantage against other local beers. Big Bend thus decided to build a brewery in San Antonio in the hopes of easing the freight costs.

One year ago, Big Bend leased a building and reportedly paid Diversified Metal Engineering (DME) of Canada one million-plus dollar for the brewing equipment.  Soon thereafter, DME went into receivership reportedly owing $13.5 million.  Big Bend faced other challenges including difficulty in raising additional capital to build the San Antonio brewery.  Today, Big Bend continues to look for new capital but faces an uphill battle.  The brewery does have options:  they could sell their labels and the Alpine Brewery, but any new investor will demand control of the business.

With the Federal Reserve raising the prime rate coupled with the publicly announced future rates, the craft industry now faces its biggest challenge.  Big Bend could be the beginning of the real shakeout of the crafts.  Investors can now invest in low-risk notes or CDs with an acceptable return.  The question is: why would one invest in the brewing industry, an industry that many see as saturated.

The cost of entry into the craft industry is relatively low, however, as the industry has learned, long-term growth in crafts is capital-intensive, without the ability to finance or raise the funding, brewers such as Big Bend will hit a wall.  2019 might be the first year that the industry sees more breweries closing than opening.  The days of zero interest rates are gone, as are the venture capitalists.

Nobody likes high-interest rates.

 Posted by at 7:00 am
Jan 082019
 

A review of the past fifty years reveals that there were years which not only defined a product but also changed the industry.  In 1975, after several years in test markets, Miller Lite was launched nationally.  This brand was not only successful, but its introduction created an entirely new category of beer.  Even in today’s market, the light segment remains the most viable.

In 1983, Corona transformed its bottle from a short, stubby brown container to the current clear longneck.  That alteration alone was the most successful package change in the history of the beer industry.  Corona’s victory drove the growth of Modelo Especial and all other Modelo products.  1983 was another defining year for the beer industry.

Five years later, in 1988, the craft segment secured its future with the founding of Rogue, Deschutes, Great Lakes, Brooklyn, Goose Island, North Coast, and Wynkoop breweries.  These breweries and others including Anchor, Boston, and Sierra Nevada have fueled a segment that has again transformed the beer business.  Such successes have led the industry to a record high 7,000 operating breweries.  During the last thirty years, the craft segment has provided wholesalers with the opportunity to add volume and margins while simultaneously solidifying their future.  Crafts have also enabled wholesalers to be less dependent on their main suppliers.

In 1999, AB tested a product in Florida which they believed would resonate with Baby Boomers.  That product was Michelob Ultra.  Twenty years later, Ultra is, and has been the industry’s fastest growing product and shows no sign of slowing down.  The lower ABV and carbs, tied to an active lifestyle, transcends all segments and demographics.  Craft brewers, now realizing the volume potential of the lifestyle segment have jumped on board with their offerings of sessionable beers.  Again, 1999 defined a growing and changing industry segment.

The next defining year in the beer business may well be 2018, given the impact of alcoholic waters and seltzers.  End caps, displays, and shelf space of local retailers are becoming more dominated by these products.  Investment money, from both inside and outside the beer industry, is pouring into this segment.  Seltzers with low ABV, low carbs, low calories, and soon, no carbonation, along with organic and natural ingredients have hit the mark with the Millennials.  Many in the industry see this segment as a short-lived one.  Many suppliers, however, do not see it that way. Boston Beers ’Truly, is planning to double their 2018 volume for 2019.  In fact, Boston Beers recently announced that their wholesalers are already building Truly inventory.  Expect other major suppliers to build inventory in anticipation of substantial growth.

Millennials believe spending six dollars or more for a Starbucks’ cappuccino is worth every penny, yet this same group will cut the cord for cable providers as they see no value in a cable.  Likewise, Millennials will spend the money on an 11.2-ounce seltzer as it fits their lifestyle.  This in itself will define the seltzers category.

Years from now the industry will look back on 2018 as a year that defined industry standards, as did 1999, 1988, 1983, and 1975.

Every new beginning comes from some other beginnings’ end.

 

 Posted by at 7:00 am
Dec 182018
 

Lone Star Brewing Co. was like many other successful regional brewers in the early 1970s. With the onslaught of AB, Schlitz, Miller, and Coors, Lone Star was losing volume and market share. At the time, Harry Jersig, the founder, owner, and boyhood friend of LBJ, decided to change things up and brought in a number of executives from Schlitz and other national breweries.  Harry felt a change was needed to ensure Lone Star’s survival and competitive nature in the marketplace. One of the executives that Harry hired was Ray Teutsch, who he appointed as Lone Star’s Sales Manager.

At the time, I was a route supervisor for the Julius Schepps beer division, which had Lone Star.  After about seven months on the job, Schepps decided to cut their supervisors from five down to three and, being the youngest, the company felt it would be easier for me to find a job elsewhere, so I was were laid off.  Shortly thereafter, I had lunch with Ray in San Antonio, and within a week had been hired as a district manager for West Texas. A year later, when the current district manager left, Ray moved me to Dallas.  This put me back in charge of Schepps.

Lone Star was touting the redneck rock music and the reintroduction of the Lone Star Longneck bottle and the brand was on fire.  In spite of numerous meetings that Ray and I had with Schepps, the company continued to resist investing needed funds into the beer division to ensure adequate service to the market.

Schepps had made George Schepps, then close to 80 years old, in charge of their beer division.  George had a professional background in owning and managing professional baseball teams. It soon became clear that George was spending his days at the Ranger’s ballpark instead of helping sell beer.  Being a longtime friend of Harry Jersig, George used that relationship to protect his job.  George complained to Jersig of being targeted by Lone Star and Jersig responded by having Ray remove me from the market.

At this time Ray suggested that I decide how best to deal with this turn of event and that he, Ray, would support my decision.  I asked for, and was granted a meeting with Jersig on a Friday.  During the meeting, Ray stood next to me and supported my actions with facts and details of Lone Star’s successes in DFW.  Ray also filled Jersig in on all of Schepps’ actions and ended the meeting by suggesting a new wholesaler might be the better option in Dallas.

Jersig relented, and I was back in Dallas.  Within several months Ray and I had persuaded Schepps to agree to a sell-out. Schepps sold to Billy Bob Barnett (Billy Bobs of Texas, which is another blog) and Steve Wooster, the former All-American football player for Texas.

I soon left Lone Star for Schlitz and shortly thereafter, Ray also left Lone Star for Standard Sales of West Texas.  Ray became President of Standard Sales, an AB distributor with operations in Texas, Colorado, and Mississippi.  Ray ended his successful career at Standard and retired to a ranch in central Texas.

To this day, I am grateful for the support Ray provided me. He could have easily moved on without me, but instead, he stood with me and provided support.  It was a very powerful lesson for me and one that I have never forgotten.  Ray’s actions spoke to his character.  Ray Teutsch, the rancher.

2018 – Ray Teutsch – AB Distributor

2017 – Charles M. Duke, Jr. – Coors Distributor

2016 – Carter S. Huber – Schlitz/Miller

2015 – Albert Jaenicke – Hops

2014 – R.D. Hubbard – Coors Distributor

2013 – George Henricksen – Royal Imports

2012 – Diane Fall – Warsteiner

THIS IS THE LAST POST OF 2018.  I WISH EACH OF YOU A HAPPY HOLIDAY SEASON AND A MERRY CHRISTMAS.  NEXT POST WILL BE ON JANUARY 8, 2019.  

Geoff

 

 Posted by at 7:00 am
Dec 112018
 

Just a couple of weeks ago, the University of North Carolina announced it had hired Mack Brown as its new head football coach.  Coach Brown had previously been the head coach at NC, but left that position for a 10-year stint to the University of Texas. While at UT, Brown experienced a great deal of success, including winning a national championship in 2005.

After the announcement that Brown would return to the University of North Carolina, a sportswriter wrote a column in which he explained why Brown had left the university and why he, Brown, had now decided to returned.  During those years at NC, Coach Brown had built the school’s football program into a powerhouse, even in competition for a conference title.  Brown was twice undefeated with 10-win-seasons but had no success beating Florida State University which had runs for the national championship.

The thrust of the writer’s article was that Coach Brown had improved the football program to the point that fans, alumni, and administrators had unrealistic views of where that program should be, given that the university did not provide the resources to NC that were available to Florida State and Alabama.  Coach Brown bolted to Texas and the NC program has struggled since.

During the years I ran Warsteiner Importers Agency, our ultimate goal was to grow the brand to the size of Beck’s, a competing import from Germany.  Beck’s, at that point, was almost two and a half times larger in the U.S. than Warsteiner.  We were, however, able to make some progress until the end of 2008. At that time Warsteiner decided to increase prices and cut marketing and staff.

Despite the cutbacks, the talk continued as to why Warsteiner had to play “second fiddle” to Becks.  While I supported the goal to grow Warsteiner to the size of Becks, I reiterated the point that I needed the financial investment to reach those volumes.  The brewery’s response, however, was always the same: if you want that support, generate it internally in the U.S.

Ten years later, Warsteiner is still half of what it was in 2008, this time, however, with more internal issues than before.  Warsteiner, not unlike the University of North Carolina, did not understand the success they were experiencing at the time.  One could say that neither Warsteiner nor the University of North Carolina knew what they had until it was gone.

Coach Brown will return and will now face more realistic expectations from the NC.  Ten wins a year is truly a good season, and it appears the fans, alumni, and administration have come to accept that fact.  Warsteiner, along with many crafts and other imports have yet to reach this point of realization.  No doubt it is, and should always be, a goal of all brands to grow.  One needs, however, to have realistic expectations.  There is only one Corona!

Wholesalers continue to hear from their suppliers as to the size they desire their brand to, but is such a goal always realistic and achievable?  More likely it is not.  The rush by craft breweries to increase in size is one of the main reasons that this segment struggles today.  Had these owners been realistic when considering the investment, we might not be where we are today.

You are not defeated when you lose.  You are defeated when you quit!

 

 Posted by at 7:00 am
Dec 042018
 

In the 1960s, Willowbrook Distributing warehouse, used by Coors of Dallas, was considered an upscale building.  The facility was large, the trucks were able to load indoors, the warehouse temperature was controlled and there were rail sidings.  The warehouse also provided multiple offices, a break room, locker rooms, a hospitality room, a check-in area, and of course, executive offices.

Until this time, I had little knowledge of the differences between beer warehouses.  While at Lone Star, I had two distributors whose warehouses were actually old barns.  Both warehouses were similar with a couple of pallets of beer and a forklift.   There was an Oklahoma distributor who operated out of a former railroad station.  The trucks would pull up alongside the passenger docks and the beer was hand loaded onto the vehicles.  Obviously a great deal of manual labor was involved.

In Chicago, a number of the current beer warehouses still have roots dating back decades with little to no updates.  This is difficult to understand considering the onslaught of new brands, flavors, and SKUs.  In today’s high tech market, warehouses are computer driven with little that remotely resembles the beer facilities of 50 years ago.  Interestingly, the one exception to this rule is the beer pallets, which remain basically unchanged.

A four year old West Texas AB house is a great illustration of a state-of-the-art beer warehouse.  The storage area is computer operated, the temperature is controlled with high tech equipment, and the facility boasted all the bells and whistles one could imagine.  And, of course, the warehouse was built with future growth in mind. Interestingly, when taking a tour of the facility we discovered that the sales department was dark and empty. It was also immediately apparent that the modern-designed desks were not in use…there were no computers, no phones, no papers, no p-o-s, no glasses…empty.

The only people in the building, outside of the warehouse, were the reception and financial staff in the front of the facility.  The most heavily used portion of the building; however, was the new gym and workout facility installed by the distributor.  The distributor indicated that the gym was most heavily used by the staff during the early mornings, late afternoons and on the weekends.

The question in today’s beer industry is what will the modern beer facility look like and how will it function?  It is obvious that a sales department, now automated, is out selling.  There is no need to go into the warehouse, except for meetings.  Will such an arrangement be sufficient going forward?  Should the empty desks be removed and a game room added?  Maybe provide a ping pong table, a couple of X Boxes and big flat screen TVs with overstuffed chairs and music.  Many of the companies who want to attract younger, educated Millennials are modifying their offices to meet this generation’s expectations.

It is safe to say that parts of the beer industry are slow to change, warehousing, however, is not.  Companies have to keep up with industry trends and this should apply to their current and future employees.

The future belongs to those who prepare for it today.

Editor’s Note.  Attention all former Schlitz employees and Schlitz Distributors: The family of James Haire is searching for a booklet created by Jim during his tenure at the Schlitz training institute years ago.  The booklet is approximately 20 pages in length with a plastic cover complete with Jim’s photo.  If you have a copy, or know where one can be located, please let us know.  The family would like be most appreciative.

 

 

 Posted by at 7:00 am
Nov 272018
 

Last week it was announced that Scott Metzger, the founder of Freetail Brewing Co. of San Antonio, had, after 10 years, left the company he created.  Despite Freetail’s success, Metzger brought in the Turner family two years ago to provide support in growing the business.  It is hard to know if this was part of Scott’s initial exit plan, but either way, Freetail will benefit from the increased support provided by the Turner family.

Freetail, like other breweries that have sold to a major brewery or capitalist, will grow in the short term. The question is, how do distributors see these somewhat successful, local breweries as continued players in their portfolios?  Which would be of more interest to a distributor: a start-up local craft brewer or an established, successful, imported brand that had never attempted to develop the U.S. beer market?

Even if the local craft has the financial support, experienced team, lab, brewpub, and commitment, the distributor might look at the local brewery with some skepticism.  Will that craft sell or will it fold?  How much time, effort, and money should be invested in this brewery?  If the brewery succeeds and sells out, will it sell out to one of my current suppliers?  Remember what happened to Goose Island, Ballast Point, Lagunitas, Revolver, Karbach, Golden Road, and others who became a key part of their buyers’ companies, a move which made their wholesalers happy.

There are other crafts that employees purchased.  Full Sail was acquired by their employees, who in turn sold the brewery to an investment firm, thereby maintaining their jobs.  New Belgium employees still own their brewery.  These breweries and others continue to do well.  But at what point does the distributor take a risk and at what point are they forced to draw the line?

This summer, after almost 100 years in business, Great Western Brewing Co. of Saskatoon, SK, Canada brought their beer into the U.S.  On the surface, a distributor might look at Great Western as a local craft.  Great Western is the predominate brewery in that part of Canada with outstanding products and a top brewmaster.  Its brewing capacity is well over 300K HL. Unlike a number of crafts, the Great Western strategy is to grow and build their volume while maintaining their long-term ownership.  They know building a U.S. market will take time, and they are committed to doing so with a strategy.

The odds are that Scott Metzger will return to the industry in some capacity and, of course, Freetail will continue to be a viable brand for its wholesalers.  Great Western will expand in the U.S. as planned.  The success of either brewery, like other breweries, will be tied to their commitment.  In the end, that is the distributor’s dilemma.

Get out, stay out, and don’t come back!

 Posted by at 7:00 am
Nov 202018
 

Thanksgiving posts in the past have been a myriad of topics within the beer industry, the majority of them; however, have focused on subjects for which we are all thankful.  The most popular Thanksgiving story was the 2014 post on Lone Star Beer.

Many of the posts have highlighted past events for which we were thankful.  We are currently witnessing how these occurrences, for which we were once thankful, have shaped the future of the beer industry.  Let’s now project what the industry might be thankful for in the coming years:

  • Continued growth of the craft segment and the excitement that craft brings to the industry,
  • Premiumization of all beer,
  • The size of the millennial generation, the largest segment of the population in history,
  • Seltzers, FMBs, and spiked water which appear to be the beer industries’ next major growth segment and the best weapon against the onslaught of wine and spirits,
  • Taprooms and local breweries which signal a return to neighborhood connections,
  • Lower taxes and more jobs,
  • Higher incomes,
  • Lower gas prices,
  • Continued lower taxes on beer (all beer!),
  • Favorable legislation on both the Federal and State levels thereby fueling growth in the beer industry,
  • A growing export business for all makes and sizes of U.S. brewers,
  • Continued technological advancements which thereby enhance efficiencies and profitabilities,
  • Michelob Ultra,
  • Constellation Brands,
  • Boston Beer,
  • Higher quality in craft brewing.

These are just a few of the items the beer industry can be thankful for in the coming years.  If you know of additional future trends, please let me know.

By the time this is posted, perhaps there will be an end to the Pabst Brewing Co.’s suit against MillerCoors; a suit which is currently being litigated in Milwaukee.  There is much at stake for both breweries in this suit, but the outcome will also affect many wholesalers and consumers.   More on this after the suit ends.

I would like to take this time to wish all of those in the beer industry an enjoyable Thanksgiving holiday, and especially recognize all who make, deliver and service beer!  Happy Thanksgiving!

 

 Posted by at 7:00 am
Nov 132018
 

During the 60s and 70s, wholesalers represented only one brewery and the future of that wholesaler depended on the success of that one brewery.  Partnering was critical, and if the marketing did not connect with the consumer, both the brewery and the wholesaler felt the negative consequences.  The wholesaler had little choice but to support the breweries’ plans.

As previously discussed, today’s wholesalers spread their exposure across many suppliers and brands.  If one supplier hits a bump, the wholesaler might feel a slight repercussion, but the negative experience will not adversely affect the wholesaler.  Today’s model also allows wholesalers to take a more aggressive stance against a vendor when the vendor’s marketing or programs are questioned by the wholesaler.  Partnerships are strained and tenuous at best.  One really must question whether the relationship between the wholesalers and the brewery could truly even be considered a partnership.

During the summer months, majority of vendors develop their annual budget and marketing plans for the upcoming year.  Once approved internally, the vendor presents the upcoming years’ plans to the wholesaler.   These plans, which are created by the vendor, are based on the goals and strategies of the vendor.  The vendor has built their future around certain platforms and has invested their dollars against that strategy. In the business meetings, the wholesaler has input and many times these plans are modified, but typically the core plan remains.  Only when the strategy totally fails are the business plans changed.

Recently, a major AB distributor notified their beer vendors of a wholesaler–initialed price increase. The increase included price points and margins that the wholesaler was not only taking for themselves but, also what they were allowing their vendors to take!  This even included the date the beer price was to increase.

There was no discussion with any of the vendors as what effect this increase would have on their 2019 market planning, goals, or strategies.  The increases, which were deemed final, were focused on all keg sizes.  One wonders if ALL their vendors were affected or just a targeted few?  When a vendor has questioned the wholesaler in the past, the wholesaler’s continued response is “this is the policy.”

Leegin Creative Leather Products, Inc. v. PSKS, Inc. 551 U.S. 877 (2007), is a U.S. antitrust case in which the United States Supreme Court reversed the 96-year-old doctrine that vertical price restraints were illegal per se under Section 1 of the Sherman Act.  The aforementioned case replaced the older doctrine with the rule of reason. Resale price maintenance (RPM) is the practice whereby a manufacturer and its distributors agree that the distributors will sell the manufacturer’s product at certain prices: at or above a price floor, or, at or below a price ceiling. If a reseller (distributor) refuses to maintain prices, either openly or covertly, the manufacturer may stop doing business with the said wholesaler. This marked a dramatic shift in how attorneys and enforcement agencies addressed the legality of contractual minimum pricing and essentially allowed the reestablishment of resale price maintenance for most commercial situations in the U.S.

Simply put, if the wholesalers’ pricing has a negative effect on the vendors’ products, the vendor may have the ability to take legal action against the wholesaler.  If that happens, then who wins?

Alliances and partnerships produce stability when they reflect realities and interests.

 

 Posted by at 6:00 am
Nov 062018
 

Recently announced third-quarter results for ABI showed that; once again, the company’s depletions are down -1.5%.   ABI’s market share also continued to decline this quarter -.5%. This all equates to a year-to-date market share loss of -.45%.  Even with all the cutting and consolidations that ABI has done in recent years, their debt exceeds $100 billion!

ABI also announced that they will be cutting their dividends by 50%, thus saving four billion dollars per quarter to pay down the aforementioned debt.  The markets’ response to ABI’s announcement was a 40% drop in the beer giant’s stock value.

Is the clock ticking on Carlos Brito?  Regardless of the fact that under Brito’s leadership, AB has lost millions of barrels in volume and market share, it is the financial results that have afforded Brito the ability to be the darling of Wall Street and his shareholders.  The industry knows all too well that Brito’s cost-cutting measures and aggressively price increases have produced great financial results and returns for the company.  The question is, now what?

Brito has accomplished this position by buying large beer companies and applying ABI’s cost-cutting measures and pricing tactics.  In recent years, AB, Modelo, and SAB Miller have all gone down Brito’s path.  Perhaps Brito has run out of beer companies to buy and costs to cut.

Diageo is not going to sell Guinness. And for generations, Carlsberg and Heineken have been tied into a family and will not sell.  While nothing is certain, it is safe to say that these companies have no interest in selling to ABI.  What else is there?  There are still some nice breweries out there, including the six million Hectoliter Krombacher, but that, too, is family owned.  Unless ABI jumps deeply into China’s breweries, there is nothing with significant volume remaining to be purchased.

What about Pabst?  Since Pabst is a virtual brewery, adding that volume to the declining volume of AB would certainly help with the latter’s excess brewing capacity.  Pabst’s portfolio, however, does not fit ABI’s strategy.  ABI, not known for effective brand marketing, would up-selling Pabst’s products resulting in accelerating ABI’s declining volume even more.  In addition, ABI might violate their DOJ agreement regarding the purchase of more U.S. companies.

How does Brito increase shareholder equity, make his board happy, and reduce ABI’s debt for future expansion?  What if Brito sells all or part of AB in the U.S.?  Why not?  When ABI acquired Modelo, brand rights were sold to Constellation Brands in the U.S., similar to the situation in which Miller was sold to MolsonCoors when they bought SAB.  By selling the U.S. market, ABI could retire the debt, AB stock would soar, and ABI would be in a much stronger position to buy Coke or Pepsi!

In the end, Brito is not going to continue doing what he is doing now. His make-up will not let him.  He will, however, do something to move the needle for his board and selling AB in the U.S. might just be the icing on the cake!  Sound crazy, well nobody thought AB would ever sell either!

Egotism is the anesthetic that dulls the pain of stupidity.

 

 Posted by at 5:00 am