It may have been a year since the merger between Anheuser-Busch and Belgian beer giant, InBev, but the effects of the marriage are just starting to reveal themselves.
The changes might play well for smart restaurant owners, says Tom Pirko of Bevmark Consulting in Santa Barbara, Calif., who has consulted for many of the major U.S. brewers, including A-B Inbev, MillerCoors and Heineken. “A-B InBev will have to raise prices to pay off the huge debt incurred in buying A-B last year,” Pirko notes. As part of the debt repayment, he predicts, they’ll consolidate or bypass distributors.
Backing up the self-distribution theory are comments made in June by A-B InBev head, Carlos Brito, during a meeting with UBS financial analysts. During the meeting, Brito said A-B InBev’s goal was to go from seven percent to 50 percent self-distribution. While A-B InBev may have backed off from those remarks after they created an uproar in the beer distribution community, some observers still believe that 50 percent self-distribution is the goal.
Pirko predicts that A-B (and one can assume MillerCoors, too) is going to have to be “aggressive and make friends on the street—their customers—giving away goodies. This creates a new dynamic in the trade.”
Whether A-B InBev is changing its distribution system or merely raising prices, operators would be wise to take a look at their distributor contracts and see if they can renegotiate or lock in lower beer prices before an increase, says Pirko.
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