Market Beat: The sinister plan to control the world’s beer supply
November 30, 2012
TRUCKEE, Calif. — On Nov. 15, AB InBev got approval from the Mexican authorities for the purchase of Grupo Modelo. Grupo Modelo is the company that makes the popular beer known as Corona, which is America’s numero uno imported beer.That means “number one” for those of you who don’t speak Spanish. The headline may seem innocent enough, like just another corporate acquisition, but in reality it’s a part of a much larger plot for one company to control the global beer supply.Now if one mega corporation were to have control of the world’s oil supply or some other necessity, that’s something I think we could deal with, like who really cares? But try to take over our beer? When I saw the headline I decided that further research needed be done to expose this evil plot.AB InBev was formed in 2008 as a result of a hostile takeover of Anheuser-Busch by InBev. InBev is based in Belgium and is the maker of Beck’s and Stella Artois. When they took over Anheuser-Busch they got all of the Budweiser products. Bud Light is still America’s number one beer.Their stock trades on the New York Stock Exchange under the old symbol “BUD”. It has a market cap of almost $140 billion, which classifies it as a large cap stock. It has a dividend yield of 1.79 percent and their earnings per share are $4.55.They have more than 116,000 employees worldwide and have about 250 beer labels under their control. The beers include Bud, Michelob, Stella, Beck’s, Bass, Corona and more. Many beer aficionados have been complaining that in their effort to streamline operations and make more profits, they have been tinkering with sometimes centuries-old beer recipes and lowering the quality of the product. They have lowered the alcohol content in Budweiser, Stella and Beck’s from 5.0 percent to 4.8 percent. Bass beer, which was always brewed in England, is now made in upstate New York.The global beer market is projected to grow over 2 percent by 2016 and Africa and Asia are projected to lead that growth. North America and Western Europe should have a small decline in beer consumption in the next four years.It will be interesting to see who their next acquisition target is after the completion of the Grupo Modelo purchase. Heineken and Coors are still independent and Miller is owned by SAB Miller, headquartered in London. AB InBev is also expanding in the soft drink area; they are the largest Pepsi bottler outside of the US.Kenneth Roberts is a Truckee based Registered Investment Advisor. Information on his money management service can be found at http://www.fusiontargetretirement.com or by calling 775-657-8065. Past performance does not guarantee future results. Consult your financial adviser before purchasing any security.