Global Union Co-operation an Urgent Necessity as InBev/Anheuser-Busch Merger Creates World's Largest Brewer

Posted to the IUF website 08-Sep-2008

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Merger creates the world's largest brewer

On 14 July, InBev acquired US-brewer Anheuser-Busch (A-B) for USD 52 billion (USD 70 per share). The deal created the world's largest brewer ahead of SABMiller and the recent Heineken/Carlsberg consortium that took over Scottish and Newcastle. The new company, to be called Anheuser-Busch InBev, will employ about 150,000 workers in more than 50 countries, controlling 31% of the world beer market with a combined turnover of USD 10.7 billion (EUR 7.8 billion). With the merger, InBev secures top performing brands in key markets, such as A-B's own flagship beer Budweiser, Mexican Grupo Modelo's Corona and China's second largest brewer Tsingtao.

North American unions concerned about possible cost cutting/ restructuring

In order to finance the acquisition, InBev has taken on a large amount of debt. Despite its announcement that it does not intend to close any of the 12 A-B breweries in North America, move or diminish the role of A-B's headquarters in St. Louis, Missouri, employees are concerned that the sale of A-B's theme park (Busch Gardens), packaging (SeaWorld) and other non-core businesses will not generate enough cash to offset the considerable liability. Shortly before the merger was approved, A-B had announced a workforce reduction of 10-15 percent (about 1,300 jobs) in an attempt to boost share price prior to closing the deal.

Teamsters rally at A-B St. Louis headquarters

The IUF-affiliated Teamsters union representing more than 7,000 A-B workers in the US and Canada is concerned about future restructuring measures and about InBev's continuation of A-B's commitment to quality health care and wages negotiated with the union. Key US employee concerns are the introduction of InBev's "zero-based budget", outsourcing, and the continuation of collective bargaining agreements and their negotiation process. The Teamsters collective agreements with A-B expire on 28 February, 2009. Negotiations started on August 18. Two days before, on August 16, Teamsters rallied in St. Louis to demand that InBev continue the relation with the union, honour existing agreements and keep its commitments to A-B workers, retirees and communities.

Watch an extract of the the St. Louis rally and listen to union leaders by clicking on the video link below.


Reaching out to InBev workers worldwide

The Teamsters invited union leaders from InBev operations in Brazil, Belgium and Canada to a special meeting in St. Louis with Teamster local leaders at A-B to talk about their experiences with InBev management. InBev's focus on individual productivity is very strong in Brazil, where workers can be penalised for underperformance. In Canada two breweries were closed in Toronto and Vancouver since InBev's takeover of Labatt's, while Canadian workers have seen an erosion in their pension schemes. Belgian unions reported on the deterioration of union/management relations after a change in management following the Interbrew/AmBev merger, on historic brewery closures and consolidation and on the company's introduction of more outsourcing, flexible, part-time and temporary employment.

IUF and affiliates must take the lead in building union power!

The increased consolidation in the beer industry and the newly created beer giant A-B InBev highlight the urgent need for international union co-ordination and concrete solidarity among its employees and their unions everywhere in the world. This is a strategic priority for the IUF that will be tackled in the next IUF global brewery workers' meeting planned for 2009 with the creation of a Global A-B InBev Union Alliance.