MILWAUKEE -- Miller Brewing Co. CEO Tom Long said the company is starting to see cash-strapped drinkers trading down to economy beers. He told the Associated Press that the Milwaukee-based brewer saw some shift between higher-priced, premium beers and economy beers starting in January.
Long said that this shift to beers like Miller High Life and Milwaukee's Best is being driven by Americans dealing with high gasoline prices and other soaring costs. But he added that volumes of beers sold remain stable.
Americans also are spending less in bars and restaurants, and Long told reporters [image-nocss] in a conference call Thursday that Miller is seeing declines in sales to those businesses.
Meanwhile, Anheuser-Busch Inc. said it has signed a letter of intent to terminate its U.S. importing rights to the Grolsch beer brands. Miller Brewing will become the importer of the Grolsch brands. The deal will provide enhanced protections for A-B equity wholesalers. A-B expects the deal to close by August 1.
Grolsch has been imported by A-B since April 2006 under an agreement with brand owner Royal Grolsch NV. In February 2008, SABMiller plc, parent company of Miller Brewing, completed its acquisition of Royal Grolsch NV and the Grolsch brands. Financial terms of the deal were not disclosed.
"The time is right to end our importation of these brands," said David A. Peacock, vice president of marketing for A-B, St. Louis. "It is important that our wholesalers who transition these brands are able to protect their investments. This agreement includes provisions for our distributors that will compensate them appropriately."
He added, "Since the time we began importing Grolsch, [A-B] has expanded its portfolio to include a full range of other high-end imports such as Stella Artois, Beck's and Bass Pale Ale, as well as craft-style beers and non-alcohol beverages. Together with our best-selling American brands, including Budweiser, Bud Light and the Michelob family, we now offer the country's most comprehensive lineup of products, and are well positioned in today's changing beverage marketplace."
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