Anheuser-Busch’s Year Is Riding on the Next 7 Days

Not to put too fine a point on it, but things have not exactly been “going well” for the world’s biggest beer company lately. Anheuser-Busch InBev spent 2023 bargaining with the nation’s bigots, watching rivals old and new steal share, and casting about for lost marketing mojo. It sold half its pricey craft brewing portfolio for a song last summer. Its Super Bowl ads a couple weeks ago were flat, flabby, and feckless. And come April, Bud Light will start cycling through year-over-year comps that will show just how much progress its corporate handlers have — or haven’t made — shoring up the flailing flagship.

Still, once-mighty ABI is showing some signs of life lately. Its annual Sales and Marketing Communications Meeting (known simply as SAMCOM in the trade) in New Orleans earlier this year featured “plenty of thunderous applause” from formerly aggrieved wholesalers, according to a dispatch from Beer Business Daily. An approving message from former President Donald Trump, sent just hours after a lobbyist on the payroll announced a major MAGA fundraiser, prompted speculation among $BUD analysts that American conservatives may have finally found a new objet d’outrage. Bud Light sales are still down comparatively, but have long since stabilized. To this day, the firm’s stock is trading basically even with its price just before the Bud Light fiasco began — a testament to the staying power of diversified global portfolios, if not the public-relations acumen of ABI’s leadership.

It’s some limited momentum in the right direction for a company on the comeback trail. But if ABI is exiting one crucible, it’s stumbling perilously close to another. The biggest strike on the company’s American breweries in half a century is one week away, and 5,000 Teamsters say they’re ready for a fight. Is Anheuser-Busch?

The company did not respond to Hop Take’s request for comment.

It’s been a long and winding road to get to this high-stakes showdown, with plenty of off-ramps not taken along the way. In September 2023, the International Brotherhood of Teamsters opened up bargaining for a new five-year contract for its 5,000 members at ABI’s dozen megaplants vowing to “reset the clock” on the relationship between brewery labor and brewery management. After some promising progress — including a tentative agreement on health care that would eliminate “tiered” coverage, a common union bugbear — talks broke down. In mid-December, Jeff Padellaro, director of the Teamsters’ Brewery, Bakery, and Soft Drink Conference and the union’s lead negotiator, told Hop Take that ABI had walked away from the table rather than negotiate on job security, a key issue for rank-and-file workers. “I think they’re hoping, or betting that it’s going to be business as usual, which is crazy to me,” he said.

The union has repeatedly signaled that its workers will walk. The week prior to my last interview with Padellaro, 99 percent of ABI’s Teamsters voted to authorize a strike; in late January, Teamster negotiators tendered the company a fully fleshed-out contract approved by 94 percent of the workforce. Earlier this month, it doubled strike benefits — the money the Teamsters’ international body will pay out from its $300,000,000 war chest to sustain workers in lieu of wages while they’re on the picket lines — to $1,000 per worker per week. The union also announced it would cover health insurance costs in the event ABI cuts them off, an all-too-common strikebreaking move. (Hundreds of Heaven Hill distillery employees, unionized with the United Food and Commercial Workers, faced a similar gambit during their six-week strike in 2021.)

All these moves, from the authorization vote, to the pre-ratified contract, to the benefits boost, are signals of strike-readiness from the union. “The members have spoken loud and clear,” Padellaro tells me. Whether ABI is listening is an open question. When we spoke on Tuesday, he confirmed there were no bargaining sessions scheduled between now and the Feb. 29 deadline. That belies ABI’s claims in recent weeks that it “invites union leadership to return to the bargaining table,” part of a statement the company offered The Wall Street Journal on Feb. 1. Who’s full of it? “I’m not going to call anyone a liar, particularly not in the press,” Padellaro says.

As he has in previous interviews, the veteran negotiator again highlights job security as a major outstanding issue at the bargaining table. I ask whether that means closures. “There’s no commitment [on plant closures] and that’s part of the problem,” he says. “We don’t know exactly what their plan is. … Everybody’s going to automatically assume the worst when the company is not willing to make a commitment to the employees.” Still, Padellaro insists that job security is just one issue among many still on the board: “Any one of these open items potentially could derail a deal.”

To make that point more literally, workers have ramped up practice picket lines at all 12 ABI plants in the past few weeks. “There’s hope that we don’t have to strike,” says Tyler Tisdale, a 10-year worker at the Williamsburg, Va., brewery and a strike captain for Teamsters Local 95. “But we all know, if you’ve gotta go [on strike], you’ve gotta go. You have to handle your business.”

The last time the Teamsters called a major strike at Anheuser-Busch (pre-InBev) was on March 1, 1976 — 48 years to the day prior to the slated expiration of the union’s current contract with the since-merged macrobrewer. That strike lasted 95 days and idled 8,000 workers at all of the firm’s eight plants nationwide. It also created openings for A-B’s competitors: The St. Louis Post-Dispatch reported at the time that Milwaukee trucking companies running nonstop shuttles to St. Louis with 40,000-pound loads of Miller Brewing Co. beer, and beer history shows the ‘76 stoppage also helped Old Style and other brands endear themselves to hard-drinking Chicagoans. (“We never got the business back,” August Busch IV, the company’s heir apparent before InBev came along, told The Chicago Tribune in 2006.)

By the time the Teamsters returned to A-B brewhouses in early June 1976, the stoppage had cost August Busch III & co. an estimated $30 million in contemporary dollars — over $160,000,000 today when adjusted for inflation. The late journalist Dan Baum, in 2000’s “Citizen Coors,” reported the strike at the Rocky Mountain brewer’s rival halved Budweiser production and sent overall market share from “over a quarter to less than a fifth.” A-B stock hit a nine-year low. Even the legendarily steely “Three Sticks,” who some industry observers still believed had gotten the best of the Teamsters by retaining managerial control of production, acknowledged the dear costs in his annual meeting with shareholders, reported William Knoedelseder in the 2012 book “Bitter Brew.” “A strike leaves scars,” Busch III said.

(Forty-eight years later in Williamsburg, Local 95’s Tisdale takes a different lesson from history. “We have some old members who were still around [during the ‘76 strike] who are telling us, ‘Hey, it’s going to be OK,’” he says.)

The old Twain saw dictates that history never repeats itself but often rhymes, and there are shades of that Teamster standoff with A-B visible in the strike now looming in ABI’s path. Coors and Miller are one company now, and they’re taking shelf space from Bud Light. The Super Bowl’s in-game air was still open to all beer advertisers, like it is once again after the recent expiration of a three-decade exclusivity agreement the macrobrewer had with the National Football League. Public sentiment toward unions is actually higher now than it was in 1976, according to Gallup polling. And perhaps not surprisingly, given the considerable reduction in union labor at the macrobrewer despite its growth in the intervening years, a key focus in today’s negotiations is job security — just like it was in 1976.

(Another late-breaking echo: Since Saturday, Teamsters Local 997 has been striking Molson Coors’ plant in Fort Worth, Texas, in an unrelated grievance over what the union calls a “disgusting pay package” offer from the company. Brewbound reported Wednesday evening that the ABI rival had brought in nonunion salaried employees to end-around the picket — much like Busch III infamously did in ‘76. What that developing situation augurs for the looming strike on ABI, if anything, remains to be seen.)

Of course, the King of Beers’ current predicament has no historical precedent in the corporate annals. The once-mighty company is headed into the final week of bargaining on shaky standing. Its competition is closer than ever. Its wholesalers are finally coming back to the fold. Its union knows what it wants, in a moment where the public wants unions. Not to put too fine a point on it, but there are only two ways next Friday ends — and for ABI, only one of them is “well.”

🤯 Hop-ocalypse Now

Believe it or not, that controversial $24.6 billion merger of Kroger and Albertsons that the firms proposed back in October 2022 is still alive despite various legal and political challenges to stop it on antitrust grounds. Grocery being the most important retail channel for beer sales in this country, independent experts have expressed alarm for what further consolidation of the market would do to small, independent breweries. Meanwhile, in the absence of a Federal Trade Commission suit, state attorneys general are still trying to block the deal out of concern for fair competition and labor conditions in their jurisdictions. For example, a lawsuit filed last week by Colorado’s AG alleges that the two grocers have already “colluded” in “unlawful activity” — including forging a “nefarious bargain” to undercut a 2022 strike at Kroger’s King Soopers locations in the state.

📈 Ups…

The United Kingdom’s broadcasting watchdog dismissed BrewDog chief executive James Watt’s complaints about a 2022 BBC documentary about the controversial firm… The brand, recipes, etc. of New Jersey’s erstwhile Flying Fish Brewing Co. may live on after being acquired by Guilford Hall Brewery of Maryland… Big Grove Brewing Co. outta Iowa is the latest craft brewery to enter the cannabis seltzer market, taking a majority stake in the Climbing Kites brand… The governor of Indiana’s signature is the only thing left standing between Hoosiers and happy hour…

📉 …and downs

The Brewers Association’s organizational revenue dipped around 2 percent in 2023… More reshuffling afoot in New Belgium Brewing’s c-suite as decades-long veterans depart… Tilray Brands rolled out an awkwardly named Smirnoff Ice ripoff under the 10 Barrel Brewing Co. brand… One bill that would outlaw cold beer in Tennessee (to curb drunk driving) (???) has been withdrawn, but another still lives on…

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