July 17, 2008

Pabst Touts Ascent to No. 1 American-Owned Beer Maker

MILWAUKEE _ Pabst Brewing Co. doesn't operate breweries anymore, but it wants to be the first choice for every red-blooded American beer drinker.

The company, which owns dozens of beer brands and contracts with MillerCoors LLC to create most of its brews, is staking its claim as the largest remaining American-owned beer maker.

Just days after industry giant Anheuser-Busch Cos. announced its sale to InBev, a European brewer, Pabst is conducting an online survey, asking customers about it.

"Did you know that after this sale is completed, Pabst Brewing Company will be the largest remaining American-owned brewery?" the survey asks. "How likely is this information to affect your decision to purchase beer? Would information about Pabst's American ownership on packaging, like bottles or cans, impact your decision to purchase our products?"

Executives at Pabst, based in suburban Chicago, and spokesmen for St. Louis-based Anheuser-Busch couldn't be reached for comment Wednesday.

But a Pabst statement noted that it will be "the last of the famous iconic U.S. brewers to be fully independent and American-owned."

"Most of our brands (Pabst, Schlitz, Stroh, Schaefer, Rainier, Olympia, and others) have been around since the 1800s," the statement said.

It seems clear that Pabst is poised to snatch at the patriotic appeal long used by Anheuser-Busch.

That's probably a smart strategy, given that some drinkers of Budweiser, the Anheuser-Busch brand that's been sold with flag-waving ads, aren't happy about the King of Beers being acquired by a company based in Belgium, said Mike McCarthy, an associate professor of marketing at Miami (Ohio) University.

"I do think Budweiser has cultivated a very, very strong patriotic, all-American beer image for many, many years," McCarthy said. "I think there is a little bit of a sense that Bud is a quintessential all-American beer."

However, with Budweiser and other Anheuser-Busch brands being owned by a European company, calling those brands all-American beers "will be a little hard to say with a straight face," McCarthy said.

McCarthy said even if just 1 percent of Budweiser's customers dropped the beer and switched to Pabst Blue Ribbon, that would bring a huge boost for the brand. Its Americana image was immortalized in the 1973 Johnny Russell song "Rednecks, White Socks and Blue Ribbon Beer," and later in the 1992 Mary Chapin Carpenter song, "I Am a Town."

Budweiser has seen declining sales for several years as beer drinkers turn to Bud Light and other low-calorie brews. But Budweiser in 2007 still posted sales volume of 24.6 million barrels, accounting for 11.3 percent of the U.S. market, according to trade publication Beer Marketer's Insights.

Pabst Brewing, meanwhile, posted sales of 6.1 million barrels, or 2.8 percent market share, for all of its brands.

Anheuser-Busch's 2007 market share was 48.2 percent, while Miller Brewing Co. and Coors Brewing Co., which have since combined to form MillerCoors, posted a 29.5 percent market share. MillerCoors is a 50-50 joint venture of London-based SABMiller PLC and Molson Coors Brewing Co., which is based in Denver and Montreal.

Pabst's possible patriotic appeal could be seen as a bit ironic, given that its beers are made by MillerCoors, which is owned by one company based in Great Britain and another company that is co-based in Canada. Pabst, owned by the California-based Kalmanovitz Charitable Trust, closed its Milwaukee brewery in 1996 and shuttered its last remaining brewery in 2001 after hiring Miller to brew its brands. Pabst moved its offices from San Antonio, Texas, to Woodridge, Ill., in 2006.

Another irony: Anheuser-Busch in 2005 aired a TV spot that featured its employees talking about how they're proud to serve "the only major American brewery that's still American-owned," profits from which stay in the United States.

The spot was a not-so-subtle dig at Coors, which earlier that year had merged with Canada's Molson Inc., and Miller, which was sold in 2002 to South African Breweries PLC, which then changed its name to SABMiller.

In 2004, Anheuser-Busch put up posters in liquor stores and other retail outlets saying Miller is owned by "South African Breweries." U.S. District Judge Lynn Adelman ordered the posters be taken down, saying they were inaccurate because Miller was actually a subsidiary of SABMiller.


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