AB Plays the Patriot Card (fwd)

FYI/FYE Hey Roger D. Who owns PBR? Cheers, Jim July 11, 2005 Red, White and Beer? A Brewer's Strong Talk By HEATHER TIMMONS LONDON ANHEUSER-BUSCH is taking some chances by circulating marketing materials that may cross the line from patriotism to jingoism. The materials consist of at least two sheets of information that apparently are meant to depict Anheuser-Busch as the brand of choice for patriotic Americans. One sheet criticizes the company's major competitors, SABMiller and Molson Coors, for being "owned by foreigners." The other states that Anheuser-Busch is expanding internationally to bring profits "back to the United States." Anheuser-Busch refuses to answer any questions about the materials or respond to criticism of them. But executives in the beer industry say the information sheets have been given to Anheuser-Busch distributors, posted at the company's Busch Gardens theme parks and inserted in cases of beer. In the past, Anheuser-Busch has mentioned Miller's purchase by South African breweries in television commercials. But analysts said that the new campaign went further in its pro-American stance, striking a note that might seem dissonant for a company expanding rapidly overseas. There are also questions about the accuracy of the information Anheuser-Busch is circulating. One assertion is that SABMiller, which is based in London, is "owned by South Africans and left the country" after apartheid was abolished. It also says that "a majority of SABMiller's owners are South African." SABMiller says about 35 percent of its investors are South African and 32 percent are American; most of the others are European. Another claim is that "Anheuser-Busch is the only major American brewer still American-owned, with over 95 percent of our stock held by American investors." According to Bloomberg data, Barclays of Britain is one of the company's largest investors, with a 6.19 percent stake. Among the other assertions, Anheuser-Busch says that it recently bought Harbin Brewery of China "so we could generate more profit to bring back to the United States." That's also a reason it gives for its 50 percent ownership of Grupo Modelo, the Mexican brewery that makes Corona. And the company takes a shot at Coors: "Coors merged with Molson in 2005, and Molson Coors is 51 percent owned by foreigners," the information sheet says. Molson is a Canadian company. The campaign could provoke a backlash, because many beer retailers in the United States are immigrants, said Harry Schuhmacher, publisher of Beer Business Daily, a newsletter for beer distributors. In the United States, "we are all foreigners," he said, adding that Adolphus Busch, founder of Anheuser-Busch, was a German immigrant. Analysts outside of the United States who reviewed the materials found them puzzling. "I'm surprised they get away with that," said James Dawson, an analyst with Charles Stanley in London. "I don't think it's going to do Anheuser-Busch any favors." He added, "They are arguing that SAB is taking profits out of America to South Africa, and in the next line they say they are bringing profits from China to the United States. Why is it any better to repatriate profits to America?" SABMiller dismissed Anheuser-Busch's claims. "We think this is an extraordinarily shortsighted strategy from A-B," said Nigel Fairbrass, an SAB spokesman. "The world is a pretty small place, and any serious multinational wouldn't take these sorts of risks." A Molson Coors spokeswoman, Kabira Hatland, said in an e-mail message: " Molson Coors Brewing Company is incorporated in Delaware, is traded on the New York Stock Exchange and has a headquarters office in Colorado. In addition, the vast majority of the earnings and cash generated by Coors in the U.S. stays in the U.S." International growth is increasingly important to Anheuser-Busch, especially as more Americans forgo beer for wine and spirits. The company has been expanding steadily abroad: in part because of its purchase of Harbin Brewery in China, it sold 13.8 million barrels of beer overseas in 2004, up 64 percent from the year before and about one-sixth of its total volume. At the time of the Harbin acquisition, Stephen J. Burrows, chief executive of Anheuser-Busch's international division, said that his company was "taking the long-term view in China." He said then that he hoped to foster cooperation between Harbin and Tsingtao, a Chinese brewer in which Anheuser-Busch has a minority stake. The American campaign is in stark contrast to Anheuser-Busch's approach in Britain. A series of recent Budweiser ads play to the stereotype that Americans are simple, loud and aggressive, imagining what would happen if the United States tried to remake one of Britain's favorite sports, soccer, known here as football. In the commercials, Americans find several ways to ruin the game, including adding extra balls to it and introducing monster trucks. The ads close with the self-deprecating tagline: "You do the football. We'll do the beer." * Copyright 2005 The New York Times Company -- ------------------------------ *