US: Anheuser-Busch InBev dismisses Budweiser recipe change claims

By | 30 October 2012

CEO Carlos Brito is portrayed in a negative light in the piece for his cost-cutting strategy

CEO Carlos Brito is portrayed in a negative light in the piece for his cost-cutting strategy

Anheuser-Busch InBev has denied suggestions in a recent news article that it has changed the recipe of Budweiser in the US.

The Bloomberg BusinessWeek front-page piece, headlined 'The Plot to Destroy America's Beer', asserts that the brewer has made changes to some of its core products in the US. It claims that CEO Carlos Brito is "risking the devotion of American beer lovers by fiddling with the Budweiser recipe in the name of cost-cutting". 

However, Peter Kraemer, A-B InBev's North American brewery operations head, commented directly on the web version of the story. "I am very disappointed by your misleading and highly biased article because it conveys an inaccurate portrayal of our company and the products we proudly brew," he wrote. 

"We would never 'tinker' (as you suggest) with the recipe of Budweiser (or Beck’s) and any suggestion that we are doing so is simply not true." 

The wide-ranging Bloomberg piece also contains quotes from German hop farmers, who have seen a drop in business from the brewing giant. One farmer is indirectly reported as saying that A-B InBev is "brewing its beer with cheaper, less flavourful hops".

When contacted by just-drinks, a company spokesperson refuted this claim. "That is just not true," the spokesperson said. "We buy the best quality hops available, both domestic and imported." On Beck's brewed in the US, the spokesperson added: "We continue to use the exact same hops as when Beck’s was brewed in Germany; they are imported from the Hallertau region." 

The article also flags a decline in US sales for the company. "The company’s shipments in the US have declined 8% to 98m barrels from 2008 to 2011, according to Beer Marketer’s Insights," it said. 

But Kraemer highlighted that Budweiser's global volumes increased by 3.1% in 2011, following a 1.7% increase in 2010. 

"The growth trend continues with sales up 6.2% in the first half of 2012," he added. 

A-B InBev will report its Q3 results tomorrow (31 October).

Expert analysis

Anheuser-Busch InBev NVSA (ABI) - Financial and Strategic SWOT Analysis Review

Anheuser-Busch InBev NV/SA (AB InBev) is producer and distributor of alcoholic and non alcoholic beverages. The company, along with its subsidiaries, engages in the business of brewing and sale of beer and few non-alcoholic beverages, across the world. AB InBev is also involved in the export of beer and operation of one Theme Park in the US. The company manages a portfolio of nearly 200 beverage brands. It has operations in over 23 countries, across the US, Europe and Asia Pacific, and sells its products in over 130 countries. AB InBev's key brands include Budweiser, Stella Artois, Beck’s, Leffe, Hoegaarden, Skol, Bud Light and Staropramen. The company is headquartered in Leuven, Belgium. The strategic intent of the company is to form new alliances, enter new markets and improve its revenue. In the line with this strategy, recently, the company announced that it will acquire the remaining stake in Grupo Modelo, the Mexican brewing company.

Sectors: Beer & cider

Companies: InBev

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