InBev’s revolving door goes round, and round …
After several top executives decided to leave their desks permanently, the press finally took notice that all is not well at InBev Germany.
Some would call them job-hopping executives seized by some last minute panic to find a new position before they turn 50 – the magical age in Germany when employees suddenly turn unfit to be hired. That’s probably the Brazilians’ view of the matter - provided they were willing to answer the question why so many German executives have left InBev Germany in rapid succession.
The first one to leave – although it is hard to say when the Big Exodus began – was the man at the top, Roland Tobias, 44, who had joined Beck’s 12 years prior when it was still privately owned. Following the takeover of Beck’s by Interbrew in 2001, Tobias first had to report to the new Belgian owners and, after the combination of Interbrew and AmBev in 2004, to the newly-installed Brazilians who have since taken over first and second level management at InBev. Together with Tobias, the sales director Uwe Albershardt, 45, handed in his resignation. Shortly afterwards, the controller Jörg Söllner, 37, left. But he was not alone. Production chief Hans-Georg Eils, 49, also thought it best to seek new challenges elsewhere as did Jörg Schillinger, 46, the head of communications.
These are only the most prominent InBev employees who have stepped through the revolving doors never to return. As the German business magazine ManagerMagazin reports in its latest issue, every other employee working in the sales department is sitting on packed suitcases.
Never has the mood been as bad as now. But if it is bad in Bremen, the home of Beck’s, it is much worse elsewhere in the provinces where Interbrew has bought up a string of regional breweries which were integrated into Beck’s to become InBev Germany. One can only imagine the fear and loathing at those breweries whose back offices were nearly totally depleted as InBev centralised decision-making in Bremen.
Secretly, German brewers may feel no little malicious joy over the fate of Beck’s personnel. In the days before Interbrew, those who worked for Beck’s thought of themselves as masters of the universe. Indeed, at Beck’s they produced a good product, were renowned for their iconic advertising and most likely ran a rather profitable business too.
Despite the many creative escapes recently, when it comes to strategic marketing Beck’s is still sailing ahead of everybody else. According to a new survey by brand consultants Dragon Rouge, Hamburg, Beck’s had the highest brand value ranking of all seven nationally advertised German beer brands.
However, this is not good enough. Certainly, not for the Brazilians who today seem to run InBev. If you have read InBev’s annual reports carefully over the years, the small colony of Germany has always been alluded to as underperforming compared with the rest of InBev’s empire. This is probably true, especially if you are used to the profits that near-monopolistic markets yield. If anything, the Brazilians are profits-oriented. In vain Beck’s execs must have tried to explain to the Brazilians that over in Germany competition is cut-throat and margins low. According to the article in ManagerMagazin, whenever the Germans tried to explain this to the Brazilians, all they got for an answer was “you must try harder”.
To improve margins, the Brazilians have introduced their notorious “Zero Budgeting” system in all markets. At Beck’s, this perpetual cost cutting regime has led to some drastic measures. The outsourcing of accounts to Hungary has only produced chaos and angered many clients, while the change of telephone company – to a cheaper provider – has resulted in sales staff disappearing in non-communication black holes. Moreover, many of Germany’s wholesalers are fuming with anger over the apparent mismanagement at Beck’s although they dare not yet give up carrying Beck’s.
Years ago I wrote an article in Brauwelt on the cultural implications of globalisation, arguing that globalisation in the brewing industry does not live up to the standard critique of globalisation as a new variety of first-world colonisation because it was companies from emerging markets that seem to have bettered first-world brewers at their game. I wrote then that brewers like South African Breweries and AmBev would impose a new set of values on the brewing industry. Little did I know that what many European brewers and suppliers are encountering today is, in their eyes, just a reverse form of colonialism. Whatever historians in years to come will call the Brazilian’s policy – it will not make the feelings of those affected by it today any less acute.
