17 July 2008 - Monday's announcement of the Anheuser Busch takeover bid by Belgian-Brazilian brewer InBev has caused a plethora of reactions within the U.S. barley industry. The $52 billion deal, which is subject to shareholders' and regulators' approval, has brought both concern and guarded optimism among U.S. barley producers.
“We are concerned because Montana has traditionally been a significant provider of malt barley to Anheuser Busch through established contracts and open market purchases,” said Kim Falcon, executive vice president of U.S. Grains Council member Montana Wheat and Barley Committee.
“We are cautiously optimistic right now and hope that InBev will continue to value the Montana producers and the quality barley grown in the state,” she said.
Barley producer Jim Broten of the North Dakota Barley Council, also a USGC member, said North Dakota growers are also “cautiously optimistic” about Monday’s announcement.
“Things will probably remain the same for the first year, but growers are worried because there is always some uncertainty when working with new people. There are some concerns about having different contracts as a result of the takeover,” said Broten, who is also USGC vice chairman.
Kelly Olson, administrator of USGC member Idaho Barley Commission, said she didn’t foresee any immediate impact as a result of the takeover.
“Anheuser Busch is still the largest brewery with 12 U.S. breweries and three malting plants,” she said, adding that the company is the largest buyer of Idaho barley and has promised to honor its commitments with Idaho barley producers despite the takeover.
“This is just a sign of the times and these developments won’t change the new company’s need for high quality barley,” she said.
The InBev takeover is the latest example of the consolidation trend now taking place within the brewery industry. Last year, SABMiller embarked on a joint venture with Molson Coors to form MillerCoors and in 2006, ADM purchased French firm Lesaffre’s 50 percent interest in International Malting Company.
Both Falcon and Olson acknowledged that the Anheuser Busch–InBev takeover bid is consistent with trends taking place within the industry and both said their organizations look forward to working with the new company.
“The last five to six years have seen a path leading toward consolidation within the industry and Anheuser Busch was the last big entity to be absorbed,” Olson said. “In Idaho, we are not alarmed at this point and will closely monitor developments in regards to the takeover bid.”