Brewer AB InBev braced for flat times

Published on Saturday 18 April 2009 14:08

BREWING giant Anheuser-Busch InBev is to reorganise its top team at Tennent's as the recession forces it to shelve a raft of new product launches and review the future of its existing brands.

It is understood a number of redundancies are expected in the Scottish lager brands marketing department while InBev's UK director of marketing, Sandra Mitchell, will rejoin the team.

The news comes as extensions to Beck's and Budweiser brands have been postponed by the brewer amid fears that cash-strapped consumers are being more conservative in their choices and may be less willing to buy something new.

This month, it emerged that InBev is also exploring the sale of its struggling Rolling Rock brand. Bidders for Labatt USA, which AB InBev struck a deal to divest in to satisfy antitrust concerns, have expressed an interest in buying Rolling Rock.

AB InBev has been willing to consider the sale of Rolling Rock at the right price, but offers were not sufficient and it is not conducting an active sale process to divest the brand. KPS Capital, a US private equity firm, bought Labatt USA in a deal that held $90m (61m) to $100m (67m) in value for InBev.

Stuart MacFarlane, InBev's UK president, said: "We don't think it's right to innovate now. We have had mixed reactions from retailers about innovation. Andy Bond at Asda said the focus was on value and getting back to basics. Consumers are nervous, they are retreating back to big brands."

Beer sales in Scotland are now estimated to be at their lowest since the 1940s. The latest industry figures showed beer sales across the UK had dropped 8.3% in the fourth quarter of 2008, the highest fourth-quarter fall since records began in 1997.