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Miller's MacDonough speaks of "trust gap." (Miller Brewing Pres. Jack N. MacDonough's relationship with beer distributors)

Miller Brewing Co. is striving to close a "trust gap" between the brewer and its distributors, company president Jack N. MacDonough said in a letter to wholesalers and Miller field employees.

Miller needs to address a "host of thorny issues" with distributors to build market share, MacDonough said in a letter dated Monday but mailed last week.

"At the most primary level, our vision must begin with a closing of the trust gap that often gets in the way of our field efforts," MacDonough wrote. "Too much time and energy is spent in conflict with one another. It is a horrible waste not to vent that energy on the competition rather than internally."

Miller posted a decline in beer shipments for the 12 months ended June 30, according to Beer Marketers Insights, a West Nyack, N.Y.-based industry newsletter that mentioned the letter in Monday's issue.

Miller shipments fell 0.4 percent to 43.1 million barrels, a volume slightly less than half that of Anheuser-Busch Inc., the nation's largest brewer, the newsletter said.

A team of Miller personnel and outside consultants found the company must strengthen bonds between Miller and distributors and improve communication between the two parties, MacDonough wrote.

The company also must work to find aggressive but more practical local marketing plans, the Miller Brewing Co. president said in his missive.

Benj Steinman of Beer Marketers Insights told the Milwaukee Sentinel relations between beer companies and distributors sometimes get strained.

"But more recently it has been getting more difficult because earnings are bad and business is lousy," Steinman said.

A Miller distributor told the Sentinel that Miller was more frequently turning to wholesalers for promotion costs, a request that in turn eats into distributors' profits.

And several brewers have been taking up to 70 percent of price hikes, but asking distributors to share half the price cuts, he said.

Several distributors of various brands have reported profits down by as much as 50 percent, Beer Marketers Insights reported.

Also in Beer Marketers Insights, Pabst Brewing Co. showed strong growth in shipments for the second quarter.

Pabst shipments were up 5.8 percent for the quarter to 2 million barrels, while shipments by other brewing companies fell or showed smaller growth.

Miller shipments for the same period increased 2.1 percent to 12.4 million barrels, although they remain down for the past 12 months.

Anheuser-Busch shipments in the quarter were up 0.9 percent to 22.6 million barrels.
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Publication:Modern Brewery Age
Date:Aug 23, 1993
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