What’s Going on with A-B Pricing?

Soft in supers, rumors of discounts.

Ever since Anheuser-Busch slashed prices two years ago to fend of Miller Lite, one of the biggest questions in the beer business has been whether A-B would again take pricing actions to hold share.

It’s an important question to keep in mind in view of weak pricing in supermarkets and reports by beer industry trade magazines of aggressive promotion plans by A-B.

In supermarkets, A-B’s dollar share of beer sales slid by 0.2 points during the four weeks ended August 11, according to beer sales statistics from Nielsen. For the 52 week period, it’s slid by 0.4 points.

The reason: While Bud Light is growing, it’s not growing fast enough -- or at a high enough price -- to make up for ongoing volume declines by Budweiser and Bud Select.

Bud’s case volume dropped by 6.1 percent and Bud Select plummeted by 21 percent during the four week period.

Bud Light grew during the period -- case volume increased by 1.8 percent -- but on relatively soft pricing. While Bud Light picked up 0.4 points of case share in supermarkets, it only gained 0.1 points of dollar share. Overall the Bud franchise lost 0.7 points of dollar share.

Meanwhile, beer industry trade magazines in the past weeks have been reporting buzz of A-B discount activity. After previously reporting A-B discounting activity in Michigan, the e-newsletter Beer Marketer’s Insights Express followed up on Friday with a report that led off like this:

"Something is going on out there. But we don't have our arms around scope of it yet and haven't gotten AB's perspective on these changes.  Ain't just Mich tho.  Not by a long shot.  Word came in today that with ink barely dry on AB's 35 cent frontline price hike in Fla, it will simultaneously offer $2.15 quantity discount on 25 cases of 12-pack cans and bottles.  Price goes back to $15.20 a case." 

Beer Business Daily, which also has been reporting on discounting, quoted a Miller-Coors distributor on the Florida action:

“That’s cheaper than I’ve seen it in years,” said one blue-silver distributor to BBD, adding “Miller caught a lot of heat for this two years ago, and now A-B’s doing it. It’s really disappointing.”

The Beer Marketer's Insights home page is here.

Beer Business Daily is here.