Anheuser-Busch And France

Anheuser-Busch and France
Introduction
Anheuser-Busch has been the nation’s largest brewer for more than 40 years. In the mid-1800’s Adolphus Busch became familiar with the beers of a small Bohemian town called Budweis. After immigrating into the United States he married into the Anheuser brewing family. In the 1870’s Adolphus Busch registered Budweiser as a trademark in the U.S. Adolphus Busch dubbed his company Budweiser, “the king of beers.” Budweiser is a registered trademark of the St. Louis-based Anheuser-Busch, One Busch Place, St. Louis, Missouri 63118-1852, which is the world’s largest brewing company. Budweis is a small brewing town in the Czech republic. The town has a 700-year-old history of beer brewing. The brewing company Budvar of Budejovice registered Budweiser as a trademark in Europe in 1895. Budvar’s Budweiser is considered by beer experts to be a greater beer than the American Budweiser. Czechs are very proud of the Budvar brewery and considers its beer to be a national treasure. In the days before a global marketplace, the American Budweiser and the Czech Budweiser have never really competed with each other. However, in the 1990’s with increased global competition in the beer market, this dispute over who actually owns the Budweiser name takes on increased importance. According to a 1958 agreement signed by the Czech government, brand names that denote geographic origin are protected. So the Czech government which owns Budweiser believes that they should be the only ones allowed to carry that name in Europe. However the United States did not sign that treaty in 1958, so they do not agree with this. They have decided that it was no longer necessary for them to have a trademark settlement to develop the American Budweiser business in Europe.
In recent years Anheuser-Busch has faced increased competition in the U.S. market. As a result of this increased competition the company has been looking overseas for growth and increased profits. The American market is a relatively stagnant market for Anheuser-Busch. There is very little growth in America and 94% of Anheuser-Busch’s sales occur inside America (Anheuser-Busch, 1999). Anheuser-Busch also has the resources to compete with any European brew in the European market. In many countries in Europe, Anheuser-Busch has begun to gain some market share and turn some profits. The American market is a relatively stagnant market for Anheuser-Busch. There is very little growth in America and 94% of Anheuser-Busch’s sales occur inside America (Anheuser-Busch, 1999). Imports like Amstel and Heineken have made inroads in the American beer market. To increase sales and profits, Anheuser-Busch must look for business in foreign markets. In order to compete with theses imports they created brands like Budlite, Michelob, Busch, and Budweiser. Their dominance of the US beer market has a 100-year-old history.
Budweiser Corporate Analysis
Anheuser-Busch Companies, Inc. continually seeks opportunities to maximize shareholder value and increase efficiency. The company has control of over 47% of the global market share (Anheuser-Busch 1999). In the process of doing this, Anheuser-Busch has become one of the most recognizable trademarks. Because of their world-renowned recognition Anheuser-Busch Companies Inc is always looking to maximize their shareholder value and increase efficiency. As noted in the Annual Report for 1999, Anheuser-Busch remains focused on three major objectives to enhance shareholder value: Increasing per barrel profitability which, when combined with continued market share growth, will provide solid long-term earnings per share growth (Anheuser-Busch, 1999). Profitable expansion of international beer operations by building the Budweiser brand worldwide and making selected investments in leading brewers in key international beer growth markets (Anheuser-Busch). The company has made significant marketing investments to build Budweiser brand recognition outside the United States and operates overseas breweries in Canada, China, United Kingdom, Ireland, Mexico, Spain, Japan, Italy and Argentina; and services beer to twenty-eight countries worldwide (Budweiser).
Packaging operations provide significant efficiencies, cost savings and quality assurance for domestic beer operations, while entertainment operations enhance the company’s corporate image by showcasing it’s heritage, values and commitment to quality and social responsibility to 19 million visitors to the brewery annually, as well as adding their profit contribution (Budweiser). The company’s strong commitment to achieve these objectives benefits all firms and individuals that maintain a vested interest in their corporation. Competitive With an estimated 47.5% of the total market share for 1999, Anheuser-Busch continues to widen the gap separating them from their nearest competitors (Anheuser-Busch 1999). Budweiser and Bud Light are the No.1 and No. 2 best-selling beers in the world. Miller, their closest rival maintains 22.1% of the market share (Anheuser-Busch 1999 ). In 1999, they achieved record sales and earnings, selling over 100 million barrels of beer worldwide for the first time in history (Anheuser-Busch 1999).
In Anheuser’s effort to broaden their boundaries, the company has made significant marketing investments to build Budweiser brand recognition outside the United States and operates overseas breweries in Canada, China, United Kingdom, Ireland, Mexico, Spain, Japan, Italy and Argentina; and services beer to twenty-eight countries worldwide (Budweiser). France is just one of the many countries that Budweiser operates in despite the European attitude against American Budweiser beer.
French Economy—overview:
One of the four West European trillion-dollar economies, France matches a growing services sector with a diversified industrial base and substantial agricultural resources. Industry generates one-quarter of GDP and more than 80% of export earnings (French Economy). The government retains considerable influence over key segments of each sector, with majority ownership of railway, electricity, aircraft, and telecommunication firms. It has been gradually relaxing its control over these sectors since the early 1990s. The government is slowly selling off its holdings in France Telecom, in Air France, and in the insurance, banking, and defense industries. Meanwhile, large tracts of fertile land, the application of modern technology, and subsidies have combined to make France the leading agricultural producer in Western Europe. A major exporter of wheat and dairy products, France is practically self-sufficient in agriculture. The economy expanded by 3% in 1998, following a 2.3% gain in 1997 (French Economy). Persistently high unemployment still poses a major problem for the government. France has shied away from cutting exceptionally generous social welfare benefits or the enormous state bureaucracy, preferring to pare defense spending and raise taxes to keep the deficit down. The JOSPIN administration is preparing to both lower unemployment and trim spending, pinning its hopes for new jobs on economic growth and on legislation to gradually reduce the workweek from 39 to 35 hours by 2002 (French Economy).
Manufacturing
In the early 1990s, manufacturing employed between 20% and 25% of the labor force (Country Reports). The principal industrial concentrations are around Paris, in the Nord-Pas-de-Calais and Lorraine coalfields, in the Lyon and Saint-tienne complex of the Rhne valley, and in the new industrial centers that have emerged in the English Channel ports of Dunkerque and the Mediterranean industrial complex at Fos because of the use of imported raw materials. Many French business enterprises are small to moderate in size, although the competitive business climate created by membership in the EC has forced many companies to be restructured and combined to form powerful corporations (Martinique).

The leading manufacturing industries are metallurgy, mechanical and electrical engineering, chemicals, and textiles. In 1986, France ranked third in Europe in steel production with an output of 14.8 million metric tons and second in aluminum output (Martinique). These and imported metals are fabricated into a wide range of mechanical and electrical equipment marketed throughout the world. French locomotives, turbines, electronics equipment, nuclear power plants and submarines, and television systems are famous for their innovative design, as are French automobiles, such as Citroen, Peugeot, Simca, and Renault, and French aircraft, such as Mirage, Concorde, and Airbus. A wide range of chemicals, including perfumes, pharmaceuticals, nitric acid, sulfuric acid, and fertilizers, are also produced. The French textile and garment industry has long been known for its high fashion, although in recent years the industry has lost many former markets to lower-priced imports from countries with lower labor costs. (Martinique).

Mining
Less than 1% of the labor force is engaged in mining (Country Reports). In 1988 coal production was 14.5 million metric tons (16.9 million U.S. tons), most of it from two principal coalfields — the Lorraine coalfield near Metz, which is an extension into France of the Saar coalfield; and the Nord-Pas de Calais coalfield around Lille, which is an extension into France of Belgium’s Sambre-Meuse coalfields and is similarly thin-seamed, faulted, and difficult to work (Country Reports). Since the 1950s many inefficient mines in the north and in the Massif Central have been closed, and coal output has declined by about 75% (?). Large bauxite deposits (from which aluminum is produced) are mined in the south; France is one of Europe’s leading producers of bauxite. Potash deposits, used in the chemical industry, are extensive in the vicinity of Mulhouse. Natural gas deposits have been worked since 1951(Country Reports). Small amounts of petroleum are produced at the Parentis oilfield in the southwest, and the search for petroleum deposits continues off the coast of Brittany and in the Bay of Biscay (Country Reports).

Power
France’s fuel resources are inadequate. The country has to import three-quarters of the fuel, mainly petroleum, needed to meet its requirements. However, production of electrical energy is significant. In 1988 output reached 372 billion kW h, with nuclear energy representing 70% of the total (Martinique). France is the world’s second-largest supplier of nuclear power after the United States (Martinique). Hydroelectric plants operate on the Isre, Durance, Rhine, Rhne, and Dordogne rivers. A tidal power plant is located on the Rance River in Brittany (Martinique).
Agriculture and Fishing
France is the leading agricultural nation in Europe and about 7% of the labor force are engaged in agriculture, forestry, and fishing (Country Reports). Three-fifths of the land area is used for farming; about 31% are cultivated, 3% is in vineyards and orchards, and 24% is used as meadow and pasture (Country Reports).
In 1988, 47.6% of France’s farm income came from livestock raising (Country Reports). Cattle are raised mainly in the north and west; sheep and goats are raised primarily in the drier, more mountainous south and east, and pigs and chickens are raised throughout the country. France is Europe’s leading producer of beef, veal, poultry, and cheese and a leading producer of milk and eggs (Martinique).

Crops contribute about 52% of farm income, with cereals and sugar beets the most important products (Country Reports). Wheat is widely grown in the Paris Basin, and France ranks fifth in world wheat production (Martinique). Other grains grown are barley, corn, and oats, which, with sugar beet factory residues, are used primarily for livestock feed; some rice is grown under irrigation in the Rhne delta. Wine is a major crop throughout the country, both the vin ordinaire, everyday wine, of the region and the appellation controle, or quality-controlled, wines of such regions as Burgundy, Champagne, Bordeaux, and Alsace. Flowers are grown for perfume at Grasse, and a wide variety of fruits and vegetables are raised in the warm Mediterranean region for shipment to northern and central Europe. (Martinique).

Fishing, unlike agriculture, occupies only a modest place in the economy, but France ranks 20th among the nations of the world in total fish production (Martinique). Fishing is locally important in the coastal areas of Normandy and Brittany, the Southern Atlantic coast, and the Mediterranean. Concarneau, Boulogne-sur-Mer, Lorient, and La Rochelle are leading fishing ports (Martinique).

Trade and Tourism
France is the fourth largest exporter and the fifth-largest importer on the foreign trade market. The two principal ports are Marseille and its annexes on the Mediterranean, and Le Havre at the mouth of the Seine on the English Channel. In 1989 major imports broke down as follows: machinery (26.6%); chemicals and chemical products (15.7%); agricultural products (11.6%); automobiles (5.8%); petroleum and petroleum products (4.5%); other fuels (4.3%) (Country Reports). Major exports were machinery (27.7%); agricultural products (17.5%); chemicals (15.1%); and transportation equipment (12.7%) (Country Reports). Most trade is conducted with other members of the EC. In 1997 more than 67 million tourists visited France, which ranked third among the nations of the world in number of tourists (Country Reports).

Conclusion
Anheuser-Busch has achieved excellence around the world as the leader in the beer industry. While the company ran into problems with its home town counterpart, Budvar’s Budweiser, it eventually gained respect and stature among the beer drinkers community around the world. Although many Europeans dismissed the beer at first it has made a place in each European country. France is known for it’s wines and gourmet food but the people have grown to love and enjoy our American tradition Budweiser from Anheuser-Busch.


Economics