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A-B Chief Isn't Fazed by MillerCoors

Busch Says Joint Venture Will Cause 'Transitional Confusion' His Company Can Exploit

By Published on .

CHICAGO (AdAge.com) -- The joint venture between Coors Brewing Co. and Miller Brewing Co. creates a more formidable competitor for Anheuser-Busch, but will also create near-term confusion the King of Beers can exploit, A-B CEO August Busch IV said today in a memo to employees and wholesalers.
Anheuser Busch CEO August Busch IV faces a formidable competitor in the new Miller-Coors joint venture.
Anheuser Busch CEO August Busch IV faces a formidable competitor in the new Miller-Coors joint venture.

"This new entity does not match our size or portfolio of beers, yet there are undoubtedly synergies that this new company will eventually realize," wrote Mr. Busch in the memo, which -- oddly enough -- was first reported on Miller's corporate blog, Brewblog.com. "There will be significant transition confusion from this change, and it's up to us to capitalize on this disruption now."

No stranger to struggles
Mr. Busch ought to know about the confusion transitioning lots of new brands can bring: A-B has struggled during his first year as CEO to balance its core Bud and Michelob brands with a growing number of import and specialty beers Mr. Busch has arranged to work into its exclusive wholesaler system. Last month it reorganized its top sales and marketing personnel to help it perform better going forward.

A-B, however, was adding brands in the import and craft categories, where it wasn't previously well represented, while MillerCoors will have to figure out how to balance possibly redundant offerings such as Miller Lite and Coors Light, the Nos. 2 and 3 premium light beers and the flagship of each merging party.

If the MillerCoors combination passes regulatory hurdles, it will create a new No. 2 brewer with a 29% market share, trailing only A-B (49%).
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