Brewer increases three year cost cuts to $2.25mil
Anheuser-Busch InBev, now the world’s largest brewer, continues to cut back hard on costs. The brewer today hiked its three-year cost savings target to $2.25 billion from $1.5 billion.
The takeover last November has the bloated cost structure of the U.S.’s biggest brewer to slice into and its fearsome reputation for cost cutting to ensure its tough targets are met.
The Belgium-based ABInBev moved quickly into cost savings mode with 1,400 job cuts already announced in the United States and Britain, and it now says $250 million of cuts were made in 2008, $1 billion are due in 2009 and the rest in 2010 and 2011.
“InBev was always a ruthless cost cutter but it is the early timing of the cuts that came as some surprise and shows it is determined to get to grip with costs at the old Anheuser Busch empire,” said one industry analyst.
Originally AB had looked to cut costs by $1 billion under its own ‘Blue Ocean’ plan, but that was quickly raised to $1.5 billion after the InBev takeover and it is now up to $2.25 billion with half those costs made by the end of this year.