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Anheuser-Busch Reportedly Wants More Control Of Distribution

Anheuser-Busch InBev NV is looking to lower its costs while grabbing gross margins by someday selling as much as 50% of its U.S. beer volume directly to retailers through its own distributors, according to a report by UBS AG analyst Melissa Earlam. A-B currently directly sells about 7% of its volume.

But an InBev spokeswoman emailed the Journal's David Kesmodel that it will move slowly and not force the issue. "Consolidation has been occurring for many years, and we believe it will and should continue," according to her statement.

"I think consolidation is going to occur, but it's mostly still going to be because of competitive pressures [among distributors], and not because A-B InBev is going to swoop in and try to change the system," says Mitch Watkins, vice chairman of the National Beer Wholesalers Association and an A-B distributor in Twin Falls, Idaho.

Rival MillerCoors LLC itself has pushed for consolidation among its distributors since SABMiller PLC and Molson Coors Brewing formed the joint venture last year, but it hasn't tried to buy distributors itself, Kesmodel reports.



Read the whole story at Wall Street Journal »

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