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Annual A-B sales decline in 1991.

Annual A-B sales decline in 1991

Annual beer sales at Anheuser-Busch, Inc., fell slightly in 1991, the first decline in 15 years for the world's largest brewer.

Analysts said the 0.5-percent drop by the brewer is a result of the doubling of the federal excise tax on beer on January 1, 1991, and the recession, which caused beer drinkers to switch to cheaper brands.

The government now imposes a tax of $18 per barrel on beer, which comes to about 32 cents a six pack.

The St. Louis-based beermaker said it sold 86 million barrels of beer, down from 86.5 million barrels in 1990, a year that included a big sales jump in December.

The higher beer tax apparently affected Anheuser-Busch's business by inflating sales just before it kicked in.

"What happened, because of the excise tax, is that you saw a great deal of activity in December of 1990 before the tax went into effect and then things fell off around this time last year," said Joseph Doyle, a stock analyst with Smith Barney, Harris Upham & Co. in New York.

Doyle estimates that Anheuser-Busch sold about 600,000 barrels of beer in December of 1990 that normally would have been sold in 1991. If those barrels were included in the 1991 figures, the company's annual volume would have actually been up about 0.7 percent, he said.

The stagnant economy also contributed to the sales decline, Doyle said. Consumers were looking to buy cheaper, "popular priced" beers.

Anheuser-Busch has fewer brands in the popular-priced category than other breweries like Stroh and Heileman. Those brewers haven't released year-end figures but will probably do better than usual, Doyle said.

The brand-switching probably also contributed to the disappointing market share numbers the company released. A-B said it added 0.7 percent to its share of the domestic market and now controls 44.1 percent of the market.

"Anheuser-Bush is on target to meet our goal of a 50 percent market share in the mid-1990s," said August Busch III, chairman and chief executive officer of Anheuser-Busch, Inc.

Nonetheless, Doyle said the brewing giant usually isn't happy unless it gains at least a full percentage point in market share of the beer industry.

Anheuser-Busch said it expects its annual earnings for 1991 will continue the company's string of posting record earnings each year, Busch said. The earnings are due out in early February.
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Title Annotation:Anheuser-Busch Inc.
Publication:Modern Brewery Age
Date:Jan 27, 1992
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