BELGIUM: Anheuser-Busch InBev "surprised" by brewery blockades

• Brewer surprised by "agressive" opposition - source
• Blockade talks ongoing
• Little impact on sales - analysts

Anheuser-Busch InBev's management is "surprised" at the ferocity of opposition to proposed job cuts in Belgium, according to sources, as strikes have forced the brewer's operations in the country to a standstill.

Reaction to the Stella Artois brewer's plan to cut 10% of its workforce in Belgium has been "much worse than they anticipated", one source familiar with the situation told just-drinks today (21 January).

Management is "clearly surprised by the aggressiveness", said the source.

Supplies of A-B InBev's beers, which also include Jupiler and Leffe, are running dry across Belgium as workers continue to blockade the entrances to the group's breweries in the country.

A third round of direct negotiations with trade unions and Government mediators has been taking place this afternoon, a spokesperson for the brewer told just-drinks.

InBev Belgium said yesterday that its operations were at a "total standstill". It has a court order to forcibly stop the blockades, but has stated its preference for "constructive social dialogue".

Analysts expect rival brewers to try to take advantage in Belgian bars and retailers, but believe that the situation will soon be resolved and will not cause A-B InBev significant damage in Belgium. A-B InBev is the beer market leader in the country.

"In the big picture of A-B InBev, this is insignificant," said one analyst, adding that, in any case, "January is the weakest month for beer sales".

Another analyst agreed: "Competitors will try to take advantage, but the gains will be short-term. Their Belgian employees strike every year, and I’m sure it will blow over soon. Plus, it is their home market, so they’ll be able to claw back."

A-B InBev announced earlier this month that it would cut 10% of its workforce across Western Europe, to ensure the group's "long-term operations" amid falling beer volume sales in the region.

In Belgium, 263 workers out of 2,700 are set to lose their jobs. Per capita beer consumption in the country fell by around a fifth, from 99 litres to 82 litres, between 2000 and 2008, according to A-B InBev.

Since publication of this article, A-B InBev has announced a deal to end the blockades.