Thursday editorial: Citizen Busch
Six days ago the Financial Times’ Alphaville blog first reported that InBev, the Belgian-Brazilian brewing conglomerate, was preparing a $46 billion takeover bid for Anheuser-Busch Cos. Since then, to borrow a line from any number of war movies, it’s been quiet out there.
Too quiet.
Oh, there have been speculative reports in the business press saying that August A. Busch IV, A-B’s current CEO, and his father, August A. Busch III, a member of the company’s board, are prepared to fight a takeover. There has been talk of a “Mexican defense,” wherein A-B would buy the half of Mexico’s Grupo Modelo brewing company it doesn’t already own, thereby making A-B too expensive for InBev.
The Alphaville blog reported Wednesday that if that happens, InBev, already the world’s biggest brewer, might take a run at SAB Miller, the world’s No. 2 brewer. Could Anheuser-Busch, now the No. 3 brewer, afford to run a distant second to a merged InBev-Miller, or would it roll over and welcome the boys from Brazil?
Analysts have mused about a potential culture clash between InBev’s bottom-line-oriented Brazilian managers and the marketing wizards on Pestalozzi Street. InBev, it’s reported, sees $1.4 billion a year in “synergies” between itself and A-B. “Synergies,” in this case, means “cost cuts.”
What would that mean for the relentless A-B marketing machine that paints “Budweiser” on anything that doesn’t move and much of what does; that makes TV stars out of lizards, dogs and frogs; that puts lime in Bud Light and “Wassup?” on every tongue?
Hard information on the rumored transaction is so scarce that there was a “Field of Dreams”-like report in Tuesday’s Wall Street Journal about tensions between Busch fils and Bush pere, quoting the younger Mr. Busch as saying, “I never, ever had a father-son relationship. It’s purely business.”
If only they’d had a catch.
But then August Busch III never much liked baseball. Baseball was August A. Busch Jr.’s thing, and the Oedipal tensions there were the stuff of legend. In fact, everything about the Busches has been the stuff of legend in St. Louis. That’s why the quiet is so troubling. If an InBev deal comes off, it will be profoundly dislocating for our city.
For decades, roughly since the end of Prohibition in 1933 and certainly after Gussie Busch talked the brewery into buying the Cardinals in 1953, the Busches have been St. Louis’ version of the Royal Family. Their births, deaths, marriages, divorces, car wrecks, tragedies, triumphs, plots and palace intrigues have been a long-running soap opera.
Far more important, though, is the business they built. Anheuser-Busch connects St. Louis to its past, to the 19th century German immigrants who helped build this city. August Busch Sr., and his son, Gussie, spent their own money keeping their brewery open during Prohibition. The jobs they saved created a loyalty that goes beyond brand preference. A job at “the brewery” became a family treasure handed from generation to generation.
And always there were those commercials with the tagline, “Anheuser-Busch, St. Louis, Missouri.”
Even as the brewery went national and then global; as leadership passed from Busch Jr. to Busch III to Busch IV; as beer became light and dark and dry and ice and craft and seasonal; and even as Busch III unloaded the baseball team, the Busches and their executives never stopped embedding themselves in local civic and political affairs.
No politician would dare run for office without first getting an audience on Pestalozzi Street, even after company headquarters officially moved to the less-charmingly named One Busch Place. Charities and cultural institutions found them an easy touch; the brewery and its employees have given away $370 million in the last 10 years alone.
For the Busches — first Gussie, then August III and now August IV — selling beer has been one aspect of a relationship. Philanthropy is another part of it. The company gets what it wants from City Hall and Jefferson City, but it pays a fair price.
Even as A-B was building or buying 26 other breweries around the nation and the world, becoming far more than just the local macrobrewery, it remained St. Louis’ leading corporate citizen. What’s a summer without a visit to Grant’s Farm? Or Busch Stadium? Is there an out-of-town relative who doesn’t take the brewery tour? Is there any other place in the world where 50,000 people will stand as one and cheer to an advertising jingle as horses prance around a baseball park?
But now, we’re told, the world is flat. Markets are global. You have to sell beer in China and Brazil, Belgium and Russia, Mexico and Mauritania. Bigger is better, and giant is best. Relationships are harder to maintain when beer is just a product.
Over the last 20 years, St. Louis has lost the headquarters of its major hometown banks, its hometown airline, its hometown aerospace company, its hometown agricultural feed company, its hometown telecommunications company . . . even, we dare say, its hometown newspaper. All of these losses have taken some getting used to.
But losing the brewery? With all of its roots, all of its involvement, all of its identity? That would be wrenching. And it’s quiet out there. Too quiet.
Well if the Buschs hold true to St. Louis form, this company is as good as gone.
AG Edwards
Mallinckrodt
MacDonnell Douglas
The May Co.
Stix, Baer and Fuller
International Shoe
Almost every bank you care to remember a name for
Southwestern Bell
General Dynamics
I call it “The Country Day Effect”
You see, the rich and powerful build a company here in town and being rich and powerful, send their children to Country Day. Where these young men learn that the only thing they want to do is sell off Dad’s company and live off the resulting trust fund.
So say good bye to Grant’s Farm, the Clydesdales, and that 370 million. Oh and all those jobs down there on Pestalozzi Street.
“Anheuser-Busch, Sold out from under St. Louis, Missouri.”