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Anheuser-Busch Considers Expanding Beyond Beer

Market forces are leading giant beer marketer Anheuser-Busch to consider moving beyond its core product offerings and into other alcoholic beverages. Earlier this month, A-B president August Busch IV acknowledged beer's sliding market share and said, "If this trend continues, we at Anheuser-Busch will have to re-evaluate our business model going forward in terms of expanding beyond beer and broadening our position within the total alcohol industry." His words caught many experts off guard, even though the company has already taken several small steps and formed alliances geared toward expanding its product portfolio. "I think a lot of people were surprised by it," said Lynn M. Walding, president of the National Conference of State Liquor Administrators and administrator of the Iowa Alcoholic Beverages Division, who was present at Mr. Busch's speech. "While [Anheuser] has been testing the mixed-drink market as of late, Mr. Busch's remarks suggest that greater inroads into the spirits category can be expected in the not-too-distant future." It is unknown what form Anheuser's interest in the liquor industry could take. One possibility is a joint venture or partnership. Anheuser already has its relationship with Bacardi, which recently acquired the upscale Grey Goose vodka line. Another frequently mentioned possibility is Louisville-based Brown-Forman Corp., maker of Jack Daniel's whiskey.

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