AB InBev said it will continue with other incentive plans

AB InBev said it will continue with other incentive plans

Anheuser-Busch InBev is to drop a controversial US wholesaler incentive scheme to comply with conditions for its takeover of SABMiller.

The brewer told just-drinks today that the Voluntary Anheuser-Busch Incentive for Performance (VAIP) will cease "immediately". The company told its US wholesalers of the change yesterday.

"VAIP was an important programme but just one of an array of programmes we developed with our wholesalers as part of our three-year planning process - and all those programmes but VAIP will continue," AB InBev said. "It is important to note that while VAIP will no longer exist, we can continue to incentivise our wholesalers in the US in other ways."

The move follows the US Department of Justice's approval late yesterday for AB InBev's SABMiller takeover. The approval is conditional on changes to AB InBev's distribution network in the US, which has come under fire from craft brewers for allegedly attempting to keep them out of the market.

In allowing the US$107bn acquisition to proceed, the DoJ prohibited AB InBev from providing incentives or rewards to a distributor based on the percentage of AB InBev beer it sells compared to sales of AB InBev's rivals. 

VAIP proved controversial for the DoJ because the scheme judged distributor performance against how many AB InBev brands it sold compared to rival brands. The Budweiser brewer's remaining incentive programmes are based on factors such as organisational performance and do not calculate how many rival brands the distributor sells.

VAIP critic the Brewer's Association said of the DoJ's judgement yesterday: "While we continue to believe that the merger of the world's two largest brewers is bad for both the beer industry and consumers, the DOJ's significant requirements, including the termination of incentive programs such as VAIP, a cap on AB InBev's self-distribution volume and other measures to protect distributor independence, appear to address some of our major apprehensions with the merger."