AB-InBev’s CEO Brito refutes claims that cannabis hurts beer sales

USA | Could there be a correlation between declining beer sales in the US and the onward march of legal recreational cannabis? AB-InBev’s CEO Carlos Brito said that the company still does not have any data to prove that.

AB-InBev is the world’s number one brewer, whose North American beer volumes, including Canada, dropped 3 percent during the first nine months of 2018.

“We still don’t have enough data points because there’s noise to prove that beer – alcoholic beverages – suffers,” Mr Brito told interviewers on CNBC’s “Squawk Box” on 23 January 2019.

Incidentally, the interview was conducted in Davos, Switzerland, where the global elite had come together for the World Economic Forum’s annual gathering. This year, the WEF saw a new group joining the party: the cannabis elite. Davos featured the first ever “Cannabis Conclave”, a three-hour lunch at an alpine restaurant only accessible by cable car. It is not known if Mr Brito attended.

Recreational cannabis laws have been relaxed in ten US states so far, but the drug remains illegal on the federal level. States that have legalised cannabis have noticed a jump in tourism as enthusiasts travel to enjoy legally.

Colorado (population: 5.6 million), for example, legalised cannabis in 2014. The state’s tourism board reports that 15 percent of the 82 million people who visited Colorado in 2016 participated in cannabis-related activities. This makes it tough for brewers like AB-InBev to tell whether there is a genuine shift away from alcohol and towards cannabis, or if these tourists are skewing the results.

Meanwhile, AB-InBev has got into cannabis itself. In December 2018, it announced that it was partnering with Canadian cannabis producer Tilray. Mr Brito was keen to stress that USD 100 million joint venture was a research partnership only, and that there were no plans yet to commercialise beverages infused with CBD, a non-psychoactive marijuana compound.

This partnership is particularly interesting, given that Mr Brito had shown little interest in a cannabis joint venture as recently as June 2018, when he was interviewed by just-drinks.com.

In truth, it is still too early to tell if alcohol sales will suffer from the rise of cannabis, but it looks like alcohol producers are not going to take any chances.