ProBrewer.com

An Online Resource Serving The Beer Industry

  • News & Articles
    • Featured – Brewing Education
    • Beverage Industry News
    • Front of House
    • Operations
    • Packaging
    • Production
    • Real Estate
    • Sponsored
  • Events
    • All Events
    • Essential Virtual Resources for the Brewing Industry
    • Virtual Brewing Conference Guide
  • Classified Ads
    • Latest Ads
    • Ads By Category
    • Help Wanted / For Hire
    • Search Ads
    • Post Classified Ad
    • Post Catalog Ad
    • About Classified Ads
  • Jobs
  • Discussion
  • Tools
    • IBU Calculator
    • Beer Specifications
    • Water Chemistry
  • Advertise
    • Advertise & Sponsorship on ProBrewer
    • ProBrewer Advertisers
  • Allied Trade Directory
    • Search Allied Trade Directory
    • Your Companies
    • Submit New Allied Trade Company
  • Login / Register
    • ProBrewer Login
    • Register
    • Password Reset
» Beverage Industry News » Price War Ahead?

Price War Ahead?

Beverage Industry News» Beverage Industry Newsposted Jun 1st, 2005 12:00:00AM by Pat Hagerman

A price war in the US beer market is being widely predicted as executives at leading brewer, Anheuser-Busch, promised investors that it would do “whatever is necessary” to grow its market share and increase profits.

However, A-B said it wasn’t a question of undercutting competitors but simply reducing its premium to competitors’ prices. While A/B is pricing its beer aggressively, it isn’t engaged in a price war with its rivals, Patrick Stokes, A-B’s president and chief executive, told analysts at an investment conference in St. Louis. Stokes said the company would regain sales momentum by increasing its promotional pricing activity in selected markets.

Nevertheless, analysts are expecting a summer of extremely tough competition. “If everyone was playing nice in the sandbox, this would be OK,” Marc Greenberg, a Deutsche Bank analyst, told Down Jones News Service. “But we sense a much more competitive attitude among domestic brewers.” Greenberg added that A-B’s main competitors, SABMiller Miller and Molson Coors Brewing, “seem unlikely to let A-B off without a worthy fight.”

Norman Adami, chief executive of Miller, has repeatedly cautioned against a discounting battle, saying that any progress made would simply be a question of “renting share.” But Adami still expects the coming summer to be “one of the most competitive,” and said Miller would match competitors’ moves on pricing.

Last year, Anheuser-Busch saw anemic sales-volume growth due to the rising popularity of distilled spirits and wine as well as reinvigorated competition from Miller Brewing Co.

In response, A-B swiftly rolled out new products and packaging, boosted advertising and dramatically increased marketing spending and staff at bars and other on-premise locations, where spirits are on the rise.

Those efforts are hurting profit, and A-B expects second-quarter per-share earnings to decline compared to the year-ago quarter.

What affect a price war among the three major domestics would have on the craft and specialty segment is unclear, but in the past it has had little impact. Most consumers swayed by discounted major brands are either not in the buying market for specialty beer or may in fact “add on” a six pack of better beer with the money saved. The biggest impact seems to be in distracting distributors in-store time away from specialty beers and in many cases, excluding display space for high-end beer brands.

Share this:

  • Facebook
  • LinkedIn
  • Reddit
  • Twitter
  • Pocket
  • Email
Pat Hagerman

Posted by Pat Hagerman

Pat Hagerman is co-founder of ProBrewer.com. When he's not leading operations for ProBrewer you can find Pat working on Internet of Things (IoT) infrastructure and systems. If you're having a beer with him ask about some of the more original skills he's taught Alexa.

Search

Subscribe to ProBrewer Daily

ProBrewer Subscriptions

View previous newsletters.

Connect With @ProBrewerPage

 Instagram    Facebook    Twitter

 

 

 

Join the ProBrewer mailing list

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Privacy Policy and Cookie Policy

Connect With @ProBrewerPage

 Instagram    Facebook    Twitter

Go Somewhere Else

News • Classifieds • Help Wanted / For Hire • Discussion • Library • Contact • Advertise • Contact Details • Help

Copyright © 2021 · RealBeer Media · Privacy Policy · Terms and Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.