Beer News

News by | Aug 2008 | Issue #19

By Andy Crouch & Todd Alström

Hello “Anheuser-Busch InBev”

After several rounds of heated battles between two brewing giants, the first major step toward the creation of the world’s largest brewery is now complete. After Anheuser-Busch’s board of directors rejected InBev’s initial offer to purchase the American brewer, the Brazilian-Belgian brewer responded by filing a consent solicitation designed to allow A-B’s shareholders to vote to remove the 13 members of its board. Not amenable to InBev’s hard-nosed tactics, A-B opposed the solicitation and upped the ante by filing suit against InBev in federal court in Missouri, alleging that InBev was trying to acquire A-B through an “illegal plan and scheme,” which included false statements about maintaining a headquarters in St. Louis and questioning InBev’s involvement with Bucanero, the second largest brewer in Cuba. After several salvos, both sides quickly quieted down in “friendly discussions,” which resulted in the announcement of a deal. If government regulators from several countries and A-B’s shareholders approve the $70-per-share deal, Anheuser-Busch InBev will become the world’s largest brewer. [AC]

Colt 45 Graffiti Mocks Philly’s Murals

The city of Philadelphia is known for its murals, which are encouraged by many organizations as an alternative to destructive graffiti that can contribute to neighborhood blight. Typically murals need authorization by the city, neighborhood, and building owner—unless you’re Pabst Brewing Company. The Milwaukee, Wis.-based company decided they were above the law and used “guerilla graffiti” tactics by paying shop owners to display large adult cartoon-style murals for their Colt 45 malt-liquor brand, allegedly targeting minority and struggling working-class neighborhoods with the tagline, “Yo, enjoy our frosty malt beverages responsibly!” Angered locals brought it to the attention of a graffiti watchdog organization, the Society Created to Reduce Urban Blight, who then complained to the Department of Licenses and Inspections, who eventually deemed the murals illegal, as they were not in zoned areas, and cited Pabst. [TA]

“Beer” Loses Some of Its Buzz

Anheuser-Busch has agreed to stop producing caffeinated alcoholic drinks such as Tilt and Bud Extra as part of a legal settlement with the attorneys general of 11 states, including New York and Illinois. The decision comes only three years after the products were released to the market. Legal proceedings alleged that Anheuser-Busch marketed the drinks to minors and misrepresented the health and energy benefits of the beverages. As part of the agreement, Anheuser-Busch agreed to remove caffeine from the orange-flavored malt beverage Tilt and the beer known as “B to the E.” The brewery will reformulate both products for re-release to the market. Under the terms of the settlement, Anheuser-Busch did not admit to engaging in any unlawful behavior but will pay $200,000 to the investigating states. Despite growing concern over caffeinated alcohol brands, the Miller Brewing Company announced that it would not pull or reformulate its Sparks brand drinks, which contain caffeine, taurine, ginseng and guarana. [AC]

Photo by Sheryl Sulistiawan

Photo by Sheryl Sulistiawan

Redhook & Widmer Merge

Though they’ve been collaborating under the Craft Brands Alliance—a joint marketing and sales venture—since 2004, Redhook Ale Brewery and Widmer Brothers Brewing Company have officially merged to form one of the largest American craft brewers. With over four decades of combined experience and headquarters in Portland, Ore., the newly formed Craft Brewers Alliance Inc. will be run by co-CEOs David Mickelson (president & CEO of Redhook) and Terry Michaelson (president of Craft Brands Alliance), with Kurt Widmer (co-founder) as chairman of the board and Paul Shipman (Redhook chair and CEO) as chairman emeritus. Anheuser-Busch remains a minority equity holder and distributor for all brands. “Our dedicated and talented team of employees continues to craft some of the most respected beers in the industry. Together, we’re in a much better position to compete on a national basis in the increasingly popular and fast-growing craft beer industry,” said Kurt Widmer in a recent press release. [TA]

Ontarians Call for an End to Beer Duopoly

Once a nonprofit brewers’ cooperative, Ontario’s The Beer Store (TBS) is now a chain of over 440 stores that controls roughly 30 percent of the beverage market and is owned by Labatt (InBev), Molson (Molson Coors) and Sleeman (Sapporo) and works closely with the Ontario government. The government-owned Liquor Control Board of Ontario (LCBO) controls over 50 percent. Local brewers and retailers are fed up with the stranglehold, calling for major changes and a free market that would allow licensing for corner stores and give smaller brewers an edge to compete with larger brands, while consumers are taking action with online petitions and websites like Those opposed to change are worried about the dangers involved with not being able to properly enforce underage buying at locations outside of TBS/LCBO control, even though many already have measures in place for fireworks, lottery tickets and tobacco. A panel of experts reported that the government could safely let go of their control, however, the government stated that the public wasn’t ready yet. [TA]