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This Sustainably Sourced, Trump-Tariff-Hiked Bud's for You

Published on Mar 22 2018 9:40 AM in Drinks tagged: Sustainability / AB Inbev / Budweiser / Tariffs

This Sustainably Sourced, Trump-Tariff-Hiked Bud's for You

Budweiser’s owner needs to lift the brand’s sinking fortunes in the US. Its latest move? Letting you know the beer’s been made using only clean sources of power such as wind and solar.

Starting next month, Anheuser-Busch InBev will slap a battery symbol along with the phrase “100 percent” on its cans to let drinkers know it’s produced from renewable energy.

But there’s a potential glitch in the world’s largest brewer’s hopes for reinvigorated sales: those Budweiser cans could cost as much as 3% more before inflation once US President Donald Trump’s 10% tariff on aluminium imports is implemented, Chief Executive Officer Carlos Brito said in an interview in New York.

“Budweiser is going to be carrying the flag for renewable energy around the world,” said Brito, who expects AB InBev to spend about $2 billion on producing all of its beers using renewable energy by 2025.

To meet those goals, by the end of the year the company will have contracts with half of the power providers from which it’ll procure energy, he said.

Sustainability Moves

The maker of Stella Artois and Corona lagers joins a chorus of businesses seeking to do well by doing good, from Unilever’s ambitions to lessen air pollution in China to Nestlé’s acquisitions of sustainably sourced fare.

The move is expected to shore up Budweiser’s declining revenue from the US, the brand’s largest market, which contributed to a 3% fall in the company’s sales to retailers in that country last year.

AB InBev is also focused on addressing water scarcity through its Stella Artois brand’s partnership with the Water.org charity, Brito said.

While the brand enjoys strong demand abroad, the retail value of Budweiser sales in the US has fallen 17% to $3.3 billion from 2010 through 2016, according to data tracker IWSR. Bud Light was down 14%, to $7.4 billion.

Those beers are set to become more expensive on the back of Trump’s move to add levies to aluminium imports, which AB InBev has urged him to reconsider. About half of the company’s beers sold in the US are canned or bottled in aluminium, AB InBev has said.

“When you put tariffs on aluminium in the US, for sure that will increase the price of beer for consumers,” Brito said. “For example, 10% on aluminium at the current prices, that will represent 2% to 3% more pricing for the consumer. That’s more than inflation.”

News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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