Raise a Glass!

by Don Boudreaux on July 14, 2008

in Balance of Payments, Trade

Anheuser-Busch is being bought by InBev of Belgium.  Although there is absolutely no reason to object to this transaction — indeed, the greater the interconnectedness of ‘national’ economies, the better — there nevertheless will be continue Lou Dobbsian moaning, groaning, and ignorant pontificating about it.

John Burger, an economist at Loyola University of Maryland, has a very nice answer to those who think this transaction to be bad for Americans.

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{ 13 comments }

Sameer Parekh July 14, 2008 at 4:13 pm

One might think that if Anheuser-Busch is bought by the Belgians then Budweiser will no longer suck. Ah, that is probably too much to hope for.

nunya July 14, 2008 at 5:43 pm

Sameer – If you don't like Budweiser don't drink it. Pretty simple, huh?

As far as the Belgians are concerned, like many who don't trust "furriners", I'm not a big fan of this transaction. Fundamentally, like many other expats I work with (I work, literally, all over the world on short assignments, usually 3-12 monhs, for an international consulting firm) we simply don't trust them.

That isn't going to change no matter how much the economistas at Loyola and this forum chide us for being "xenophobes". We work with people from many countries every day – I write this as an American in Australia. Bottom line, the Eurotrash who now control A-B (or will soon) have different "sensibilities" that are grating to many and I doubt they'll do such a great job with the "iconic American brands" they now supposedly cherish. What a load of Clydesdale crap.

InBev can buy A-B and I won't attempt to try to stop them. However, I don't have to like it and I don't have to support them. Carlos Brito may be able to wring out a few billion dollars by raping an American company, but he'll do it without my financial support. Unfortunately, no more A-B products will ever cross the threshold to my home nor grace my dinner table.

Xmas July 14, 2008 at 5:47 pm

The main thing to be sad about is that InBev is likely to drop the A-B theme parks (Busch Garden, Sea World, et al.)

No more cheap Buds in blue bottles and Roller-coasters.

The Albatross July 14, 2008 at 8:49 pm

As predicted, a U.S. Senator is already blaming the weak dollar (http://www.breitbart.com/article.php?id=080714191805.5txfyb2q&show_article=1). So other countries weaken their currencies to be predators, and we evidently do it to be victims? Well, good luck finding a mass produced domestic not owned by foreigners. Coors is owned by Molson, and Miller by SAB (South African Breweries—most of whose shares are owned in the U.K.). Somehow, I think we will survive, and, frankly I don’t care who my butcher, brewer, or baker are—it is all about their ability to satisfy my wants and those of my family and fellow man. Oh, and what ever happened to the Japanese owning everything? Have they lost out to Belgium? Also, the best part of Dr. Burger’s article are all the comments left—you would think the Belgians were buying nuclear weapons factories or something.

bartman July 14, 2008 at 8:55 pm

nunya, Eurotrash are much less annoying than American trash. Having lived in Europe and Appalchia, I know. BTW, Carlos Brito is Brazilian. You might want to check a map for the location of Brazil. Friendly hint: it's not in Europe.

A-B has played the part of the rapacious plunderer before (hello, Latrobe…), so this is just good karma. You can thank the anemic dollar and A-B management's lacklustre performance for making A-B a sitting duck.

And those dirty foreigners probably don't trust you either. I know that I have zero faith in the "integrity" of the BS artists known management consultants.

nunya July 14, 2008 at 9:03 pm

Bartman…um, nitwit, no one ever said what kind of work I do….so stick your smarmy comments where the sun don't shine.

bartman July 14, 2008 at 9:09 pm

What, you have some sort of monopoly on smarminess?

Babinich July 14, 2008 at 9:32 pm

"InBev can buy A-B and I won't attempt to try to stop them. However, I don't have to like it and I don't have to support them."

My sentiments exactly…

In the Midwest there are plenty of smaller breweries that make outstanding products: New Glarus, Bell's, Kalamazoo, Great Lakes Brewing, etc.

Let A-B & InBev combine but do not allow them to crowd out the smaller breweries from distribution.

jared July 15, 2008 at 12:02 am

(First time commenter)

The absolute marvel of free markets and international trade appeared to me in my college years. It was NOT in my economics classes, but rather in my beer drinking experiences that I learned the abundance of choice created by trade.

Each night I had choices of beer styles from Hoegarden to PBR, Yards to Colt 45, Dos Equis and Yuengling, local to import, craft to mass produced… All were possiblities, and I had a choice of taste, culture, and drunken escapades provided by each.

Yes it might have been mostly PBR in my college years, but the choice was there, and I believe I am better off because of it.

P.S. Do not get me started on liqours, and Pennsylvannia's "state stores".

LowcountryJoe July 15, 2008 at 6:50 am

>>Yes it might have been mostly PBR in my college years, but the choice was there, and I believe I am better off because of it.<<

What, not Heineken? Who are you, Frank Booth?

Billy July 16, 2008 at 10:35 am

Aside from the economic gains, I am reminded of what I first read in Bastiat's essay on protectionism and communism. Ultimately, this merger should be supported because the owners of Anheuser-Busch and Inbev want to do this with their properties and by doing so, they do not infringe upon the property rights of others. The politicians who wanted to block this to save "America's beer" are an embarrassment.

nunya July 17, 2008 at 2:14 am

Billy,

The only thing you said that I take issue with is that this merger should be "supported". I think a better perspective is that it should be neither hindered nor helped. I have trouble with using the word "permitted" (in place of supported) because it implies that someone else (i.e. the government) should decide if the transaction will be completed.

However, as an A-B stockholder (about 5,000 shares) I am very much AGAINST the transaction, but I don't have a choice. When I receive my proxy I shall vote against the purchase, but my shares will be forcibly taken from me regardless of my wishes on the matter.

In a sense, I am being forced into the transaction by InBev, simply because others choose to sell their shares. While this is a completely private sale, I am being coerced (at "private" gunpoint) into giving up my property. Yes, I will be compensated, but at a rate someone else has determined, not one I consider to be fair.

So, while I agree that the politicos who want to interfere are absolutely wrong, it's not all roses for the stockholders who do not approve of the sale.

David Johnson July 19, 2008 at 1:30 am

Who cares? There are so many wonderful breweries producing superb beers in this nation, that only an economic dolt would consider this purchase to be a catastophe. The competition in the field is astounding, the quality excellent, prices low, alternatives numerous, etc. In short, there is absolutely nothing economically troubling about this event.

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