The Beer Institute recently released a study which showed that the US brewing industry, including wholesalers and retailers, provides 857,000 jobs and pays USD19 billion in wages. Add to that the 805,000 jobs at its suppliers’ and you’ve got a total of 1.6 million jobs and USD47 billion in wages. When it comes to taxes, the brewing industry and its consumers pay more than USD27 billion a year in excise taxes, sales taxes and personal taxes. In fact, the amount of taxes on a can or bottle of beer represents about 44 percent of its costs.

..seems to have been won by light and low-carb beers. According to market research firm Mintel, light-beer sales will surpass regular beer in the U.S. by next year as low-carbohydrate diets such as Atkins and South Beach become even more popular. Almost 30 percent of Americans now consume light or low- carbohydrate beer, such as Anheuser-Busch Cos.’s Bud Light and Michelob Ultra, compared to the 27 percent who drink regular beers like Budweiser, Mintel said.
Light and low-carb beers represented 47 percent of US beer sales in 2003 and were valued by Mintel at USD40 billion excluding bar sales and imported beers.
And you would have thought that Miller Brewing Co.’s turnaround was all the work of Norman Adami, who heads SABMiller’s North American unit.

What did we predict in our previous issue: Interbrew pulls out of FEMSA and Heineken or Coors like ardent students will cry "Miss, Miss". Shortly after we had gone to press, Heineken announced that its American subsidiary and FEMSA Cerveza have reached a definitive agreement that will make Heineken USA the sole and exclusive importer, marketer and seller of FEMSA’s beer brands in the United States.
The three-year agreement is expected to become effective towards the end of the year, 120 days after FEMSA completes its announced repurchase of a 30 percent stake of FEMSA Cerveza from Interbrew. At the end of the three-year period both parties will discuss how they will take this commercial relationship forward. The FEMSA brands are supposed to add about 1.9 million hl (+28 percent)..

Well, it was to be expected. Coca-Cola’s second in command, Steve Heyer, 51, will leave the company in a few months time after having been passed over for CEO. Instead the board chose Coca-Cola veteran E. Neville Isdell, 61, to succeed the outgoing CEO Doug Daft. In a surprise move, the board lured Isdell out of semi-retirement, probably by waving a fat cheque before his eyes. To become Coca-Cola’s chairman and CEO Isdell had to resign as a non-executive director of Scottish & Newcastle....

Remember Pabst Blue Ribbon - PBR for short? That former blue-collar brew whose heydays were in the 1970s when it sold more than ten million barrels? For years the brand has been in decline not least because Pabst’s parent, the San-Antonio-based Pabst Brewing Company, which does not own a brewery anymore but contracts out, eschews conventional advertising. In 2001 sales of the 160 year old brand PBR had fallen to fewer than one million barrels. The brand’s resurgence began when young consumers in Portland Oregon adopted the brew. In 2002 sales rose five percent although Pabst only spent a total of USD427,000 on advertising compared with Anheuser-Busch’s USD419 million and Miller’s USD275 million. Last year PBR’s sales were up 15 percent, even though no one quite understands why..

As the popular saying goes, most things nice are either fattening, unhealthy or illegal. Well, Anheuser-Busch has decided to prove us wrong on all accounts and introduced a low-carbohydrate option to its line of flavoured malt beverages, which are designed to cash in on the popularity of Atkins-style diets.
The new product, called Bacardi Silver Low-Carb Black Cherry, is the latest in Anheuser-Busch’s efforts to support weight-watching Americans in their strive to shed some flab. Bacardi Silver Low-Carb Black Cherry contains 2.6 grams of carbohydrates and 96 calories, compared with 32 grams of carbs and 225 calories for other Bacardi Silver drinks. Anheuser-Busch declined to give sales goals for the drink but said it would be targeted at 21- to 27-year-old consumer..

At the end of May SABMiller Plc.’s Miller Brewing filed a lawsuit against Anheuser-Busch Cos Inc. (A-B), claiming the top US brewer was making "false and misleading statements" about Miller Lite in its advertising. Miller also complained in the court filing that A-B’s distributors have been placing Anheuser-Busch stickers on Miller Lite cases, cans, bottles and advertising displays. The tactics are part of a subtle or not so subtle warfare between the two brewers, which are competing for weight-conscious consumers with their Bud Light and Miller Lite brands....

As we reported in our last issue, the auditors of microbrewer Redhook Ale Brewery had warned the board that ending the distribution agreement between Redhook and Anheuser-Busch early could cause Redhook to default under a bank credit agreement or force it to buy back some preferred stock. These matters, auditors Ernst & Young LLP wrote, raised "substantial doubt about Redhook’s ability to continue as a going concern." Apparently the auditors’ suspicion was justified. In May Redhook said it agreed with Anheuser-Busch Cos. on the major financial terms of a restructured distribution agreement, which should help ensure Redhook’s survival....

Interbrew and Mexico’s FEMSA have agreed to demerge their businesses. Following Interbrew’s combination with Brazilian AmBev, Interbrew will sell its 30 percent stake in FEMSA, held through its subsidiary Labatt Brewing Company Ltd for USD1.3 billion in cash. In addition, FEMSA and its affiliates have agreed to withdraw their lawsuit filed 12 March 2004 in New York, which sought a preliminary injunction of certain aspects of Interbrew’s planned combination with AmBev. The transaction is expected to be completed in the third quarter of 2004, conditional upon the closing of the InterbrewAmBev deal. Now that FEMSA is a "gay divorcee" (to use a phrase from the 1930s), suitors are beginning to line up outside its door....

In a move to shore up its North American beer operations (i.e. Canada and the US), Molson has hired the Unilever executive Kevin Boyce, 48, to the newly created job of President and Chief Operating Officer for North America. Boyce is expected to take the heat off CEO Dan O’Neill who has been deeply involved in trying to sort out the mess Molson has gotten itself into down in Brazil. Canada is Molson’s major market. Here the brewer leads the market with a share of 43 percent, followed closely by Labatt (42 percent). Imports and speciality brands account for 15 percent.