InBev, which is known for its cost-cutting culture, could make deep cuts to Anheuser's massive ad and marketing budget as it seeks to gain efficiencies from the high-priced acquisition. The "king of
beers" has a long history of memorable advertising. Much of it has been intertwined with pop culture -- from the "Whassup" craze to "Dude," the brewer's newest catchphrase.
Experts say
InBev -- the Belgium-based brewer of brands such as Stella Artois, Beck's and Bass -- will likely cut ad spending and use the savings to fight its competitors with price cuts. That's the
polar-opposite approach to A-B's, which shells out about $500 million for ads in the U.S. annually and forks over $300 million for sports sponsorships. InBev spent $58 million on U.S. ads last year,
according to TNS Media Intelligence.
One area that is vulnerable is sports marketing. A-B is affiliated with dozens of sports, from baseball to equestrian competitions. Most
sports-marketing specialists say that if A-B were to change hands and the combined entity were to cut back on sports marketing, that single event could create a drain on the prices for some
sponsorships. But budget slashing from A-B could leave the sports endorsement door open for smaller competitors.
advertisement
advertisement
Read the whole story at The Wall Street Journal »