Jump to content

Belgians drinking less beer

Recommended Posts

The Wall Street Journal has an article today about the gradual decline in Belgian beer consumption. Once among the highest in Europe, it's now dropped by 19% per capita in the past decade. One consequence is the closing of older breweries, and a loss of "Belgian-ness", an important aspect of international marketing.


Pub culture remains a key part of Belgians' social life, and the lore and prestige of Belgian brewers have added cachet to Anheuser's business around the world. Even though Belgium represents just 1.6% of Anheuser's global sales, the company has shown concern that a sour feeling developing in its home market could have an impact on the global image.


At Anheuser, managers say they need to trim operations in an unpromising market, while continuing to promote themselves as "an international company with Belgian roots that go back to 1366," according to spokeswoman Karen Couck.


The brewer that evolved into Anheuser has long been enmeshed in Belgian life. In 1987 two of the country's biggest brewers—one around since the Middle Ages—combined to form Interbrew, based 20 miles east of Brussels in Leuven, a medieval university town—launching a two-decade march of mergers and acquisitions resulting in today's global behemoth. In Belgium, it has a 57.7% market share, and Belgians drink 20 gallons of beer per capita, seventh in the world.


The 2004 merger with Brazil's Ambev brought into the fold a cadre of Brazilian executives intensely focused on cost-cutting, especially in stagnant beer markets like Europe. They ushered in a new corporate culture, cutting travel budgets, setting up more open-plan offices and introducing a system where budgets are written from scratch every year. The most recent round of belt-tightening prescribed the loss of 10% of Anheuser's work force of 8,000 in Western Europe, including 263 Belgian jobs.


Anheuser has been trying to reduce its presence in Belgium, where per capita beer consumption has fallen 19% in the past decade, so it can focus on profits in growing markets. An attempt in 2006 to shut its brewery in Hoegaarden was dropped after workers protested, but in 2007, it sold 90% of its stake in 824 Belgian cafés and restaurants.


In response to Anheuser's latest planned cutbacks, Belgium's powerful labor unions fought back. In January, workers blocked the entrances to three breweries for three weeks, preventing raw materials from entering and beer from leaving. Politicians and newspapers lambasted Anheuser for cutting jobs during a recession while making profits—over $3 billion in the first nine months of 2009. Jean-Claude Marcourt, economy minister for Belgium's Walloon region, said he was "scandalized."


Contrary to some reports, Belgium didn't run out of Stella, a light lager that is the company's most popular brew in Europe, but many bars and drinkers decided they didn't want any more. "There was a psychological reaction against InBev," says Jean-Marie Dewandeleer, president of the association of Belgian café owners. He says distributors have told him that ABI sales in Belgium were down 30% in January. The company declined to comment on the figure.


A few years ago, Mr. Dewandeleer stopped selling Anheuser beers in his own downtown Brussels café, The Black Sheep. "They were increasing their prices too much," he says. He complains the company is losing its identity by buying so many foreign breweries and taking its focus off Belgium. "We're waking up to realize that Belgian beer isn't Belgian anymore," he says.


Belgium has several hundred beer appreciation societies, and their members aren't happy. Besides lauding the merits of small breweries who produce more interesting beers, they adopt Belgium's prevailing socialist ethos that workers deserve strong protections.


"The Belgian beer community is outraged by the idea that even though you're making profits, you want to lay people off," said Joris Pattyn, author of "100 Belgian Beers To Try Before You Die.


During the protests, Haacht, a brewery employing 450 people with annual sales of €100 million ($139 million), took on Anheuser in an ad campaign. The slogan: "Haacht is a real Belgian brewery, family-owned and independent," a dig at Anheuser's size and international management. "We wanted to spread the message that there is more in Belgium than just AB InBev beer," says commercial director Luc Vandroogenbroeck. Haacht's leading brand, Primus, remains behind Anheuser in sales.


Anheuser was concerned enough by the headlines on the protests to suspend the job cuts for now and renegotiate with the unions. Anheuser managers are scheduled to meet with union officials on Wednesday to discuss a compromise solution.


The company has been downsizing its U.S. workforce, too. Since the 2008 merger, it has eliminated over 1,500 jobs. Over 350 more job cuts are planned in the coming months, say people familiar with the matter.


Brand experts say Anheuser shouldn't worry too much. "In a global marketplace, people have to be dying and there has to be blood on the bottles before people change their buying habits," says Derrick Daye, managing partner of the Blake Project, a Rochester, N.Y., brand consultancy.


Anheuser representatives point out that the company owns three of Belgium's most popular brands—Jupiler, Hoegaarden and Leffe—and is a great promoter of traditional Belgian beer practices. For example, every year it holds the Stella Artois World Draught Master contest, an international beer-pouring contest involving bartenders from 25 countries.




Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Create New...