what about the clydesdales?
by Liz Newton
Published: August 11, 2008
With the recent merger of Anheuser-Busch and InBev, whose headquarters are in Belgium, Anheuser-Busch has sucker-punched the American people. I grew up near the Williamsburg Brewery and have toured the propaganda-filled Busch Gardens. From bashing Miller and Coors for being non-American to the Here’s to the Heroes promotion, the owners of Anheuser-Bush would like you to think that they are the heart and soul of the USA. Apparently, though, both their heart and soul have a price tag: $52 billion.
Now, in all fairness, Anheuser-Busch did reject the initial bid of $65 per share; however, once the bid reached $70, the board just couldn’t resist. Way to show them who the “King of Beers” is.
So, who wins when America sells itself to foreign purchasers? The owners for sure. Anybody else? Not really. It’s hard to say how much, if any, of that $52 billion will trickle down to the American people who made Anheuser-Busch what it is today, either by working at the breweries or purchasing the products. It is disappointing and disconcerting that for $5 more per share, Anheuser-Busch quickly took its place alongside the growing group of American companies that are no longer American. Within the realm of alcohol manufacturers, Anheuser-Busch joins the ranks of Miller (South African Breweries-Miller), Coors (Canada) and Wild Turkey (France); once companies that were American owned and operated but who have recently set sail for foreign shores.
The losers during this transaction are clearly the employees of the factories and many theme parks owned by the company, whose jobs are now in limbo. InBev has already announced numerous changes that will affect Anheuser-Busch employees across the country. Quickly placed on the chopping block was the monthly perk of a free case of beer; according to rumor, the theme parks will go next. And as a signal that the company is no longer run within the borders of the U.S., many of the corporate jets formally used by executives have been sold along with a moratorium on all political contributions.
Though I’ll grudgingly admit that putting an end to the funding of political campaigns isn’t such a bad idea, I bemoan the symbolism of the act. If the age-old tradition of buying political favors is out the window, what’s next? The Clydesdales?
Anheuser-Busch owns over 250 Clydesdales, and has always prided itself on adding the best horses to its teams. Since 1933, the Clydesdale has been the symbol of one of the most powerful and recognizable businesses in America. Now, those horses are at risk of being relegated to the category of an unnecessary expense. Though it may sound facetious, if the Clydesdales are sold, Anheuser-Busch will but little more than a ghost of its former self. You can’t put Coke in a yellow can and expect a positive reaction. You can’t put thick horizontal stripes on a Yankee uniform and not expect baseball fans to puke. Likewise, you can’t send the Clydesdales out to pasture and not expect Beer drinkers to mourn the loss.
The Belgium people may not care, but we in America consider the Clydesdale to be the national horse - all thanks to Anheuser-Busch. It’ll be a sad day if one of America’s most “American” companies tears out its roots and plants itself of the other side of the world. But what can we do? Profits rule and traditions are something only sung about in Fiddler on the Roof. So do what you want InBev, but from what I can tell, this Bud’s not for me.
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August 11th, 2008 at 3:30 pm
My guess is that the Clydesdales have had a chance to look over this article:
http://online.wsj.com/article/SB121770579562707543.html
Political Diary
August 3, 2008
This Bud’s for Belgium
Politicians and Wall Streeters are starting to ask why the Belgian beer company InBev purchased Anheuser-Busch and not the other way around…..
But here’s the real question: Was the takeover basically financed by the savings Anheuser expected from escaping America’s increasingly uncompetitive corporate tax system? According to the Tax Foundation, Belgium’s corporate tax rate is 33%, but the effective tax rate can be half the nominal rate thanks to adjustments for something the OECD calls a “notional allowance for corporate equity.” Bottom line: InBev was paying around 20% of its profits in corporate taxes, compared to Anheuser-Busch’s rate of 38.4%.
Those crafty old horses are likely happy with their retirement deal, and are wondering when America is going to stop punishing businesses for being successful, and start rewarding them for continuing to invest here. With all the recent talk about ‘Windfall Profits Tax’ flying around, I imagine that Pegasus and a certain Tiger wondering the same thing.
August 28th, 2008 at 1:30 am
Insightful analysis Russ, but what’s the deal with the “Pegasus and a certain Tiger?” I’ve gotta know.
August 28th, 2008 at 8:34 am
Star,
Mobil Oil and Exxon used to have Pegasus and a Tiger, respectively, as part of their logo and advertising. Us old guys with long memories can be a bit obtuse, sorry. :-)