Anheuser discounts rumors of price war.
The company has increased promotional activities in some markets, which caused some industry watchers to predict an imminent price war. But A-B says that this outcome is unlikely. Stokes said that the company's pricing strategy aims to reduce an existing price gap in some markets, rather than undercutting rivals prices.
Stokes backed this up with some numbers. He said that in first quarter '04, Bud Light sold on average nationwide at a price 45 cents a case higher than Miller Lite. Of late, that gap has narrowed to 15 cents a case, due to Anheuser's tactical price promotion efforts.
Stokes said that the rhetoric of some in the beer industry overamped the situation. And he stressed that pricing will be only one arrow in A-B's quiver. Stokes said the company is also pushing new products, increasing ad spends, and punching up on-premise spending.
"When sales and market-share momentum are restored, we expect to return to our long-term objective of double-digit EPS growth," Stokes said.
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|Title Annotation:||Anheuser-Busch Companies Inc.|
|Publication:||Modern Brewery Age|
|Article Type:||Brief Article|
|Date:||May 23, 2005|
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