Yankee Doodle brewer gets taste for imports

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Even as it waves the American flag in advertising and decries the foreign ownership of its rivals, Anheuser-Busch is prowling for distribution rights for imported beers.

The country's largest brewer-which mocked the taste of imports in a recent JibJab online cartoon for Budweiser-is now embracing them because they are selling well while the domestic beer business is sick. Adding high-priced imports would help its formidable wholesaler force, which is getting squeezed by margin pressures amid the pricing war and high fuel prices. At wholesaler meetings this summer, A-B said that wholesaler profits are down 20% this year.

The seeming attack of un-Americanism looks to be prompted by weaknesses in the domestic beer business. Since A-B holds nearly 50% of the domestic beer market, the brewer is disproportionately affected by the 1.4% slide in the segment reported through August by Beer Marketer's Insights. Imports, meanwhile, surged 4.5% through July.

A-B declined to comment, but a move to imports "fits in with [A-B's] stated objective of bringing in some high-end [products] into the fold," said Benj Steinman, publisher and editor of industry newsletter Beer Marketer's Insights.

It would, however, represent an about-face of sorts for the brewer, who has long pushed wholesalers to devote "100% share of mind" to its brands, causing them to drop other beers, including imports. That served them well when A-B brews-particularly Bud Light-posted steady growth. Now, however, it's a drag.

As a step toward taking on imports, A-B recently filed for trademark "Import Brands Alliance," a term similar to its "Craft Brands Alliance," a marketing joint venture between two small brewers that have a distribution arrangement with A-B.

But rounding up imports won't be easy. The big brands are already spoken for and wholesalers who stand to lose strong-sellers could take legal action to block the moves.

There's competition as well, as imports gain urgency among rivals seeking to capitalize on the growing trading-up phenomenon and rising Hispanic population. Archrival Miller Brewing Co., a unit of SABMiller, is believed to be eyeing additional imports to its portfolio and hired Tom Cardella, a former marketing exec at InBev USA, as senior VP-international brands and market development. Miller currently handles Foster's, Peroni and Pilsner Urquell.

On target

"We think that our SABMiller global portfolio gives us a big potential advantage and Tom is here to make sure we turn that potential into reality," a Miller spokesman said, noting that its "premature" to talk about bringing in additional brands.

It's unclear what brews A-B is targeting. One possibility, industry executives said, is Grolsch, a Dutch lager handled by United States Beverage. A-B also might try to pick up some beers owned by InBev, the world's biggest brewer by volume. In the U.S., InBev markets such brands as Labatt Blue, Beck's and Stella Artois. InBev brands "will remain distributed by InBev USA," a spokeswoman said; a representative for United States Beverage declined to comment.

A-B has gone down the import path before. From 1986 to 1997 it had a distribution deal for Carlsberg.%%

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