Belgian Brewers Move to New York

Sign On The Wall

Everything has its price. Last June when the Belgian company InBev made the effort to acquire the American Anheuser-Busch to become the largest brewery in the world, it was clear that a price had to be paid. And not just financially.

One of the concessions to content the Americans was changing the name: since November 18, the beer group is officially called Anheuser-Busch InBev, abbreviated AB InBev. A terrible name. But it is a grouser who will resent that.

The Belgians don’t have to mourn this change of name. It is purely an emotional issue. The name InBev- or before that Interbrew- did not refer in any way anymore to the roots of the group – the brewery Artois in Leuven and Piedboeuf in Liège.

However, the announcement of AB InBev yesterday that it is to establish

a management office in New York, which will cause the loss of 89 jobs at the Leuven headquarters, is disturbing. It was somehow to be expected. For AB InBev, the Belgian market is negligible and Western Europe is becoming less and less important to the group. That the center of gravity would more or less move to the United States as a result of the takeover of Anheuser-Busch, was obvious.

There is no drama in the fact that a some of the headquarter’s activities will be transferred to New York as long as the main headquarters remains at Leuven. But, the fact that the Brazilian top executive Carlos Brito will be in New York , is a sign on the wall. A diagram isn’t necessary: in the future AB InBev will manage its operations out of the U.S. Since AB InBev is a Belgian company, the stockholders’ meetings will take place in our country. And the Board of Directors will meet mainly in Belgium. However, this cannot prevent the headquarters in Leuven from becoming mainly symbolic.

Too bad? Indeed, because a headquarters brings with it other economic activities, such as supporting services like economic and legal advice and counsel. But maybe AB InBev became too big for Belgium and the move of the headquarters is an inevitable result of the development of the local brewery from Leuven into a leading worldwide player.

The move of the operational headquarters is not without danger, because the top management risks loosing the feeling of industrial activity. In Leuven, the headquarters is right next to the brewery. This may not be the case in New York.

The move will also will have an impact on the company culture. When top management lounges around in New York all of the time, their thoughts and actions will inevitably be influenced by that fact. The company culture, which laid the foundation of the amazing growth of the beer group may eventually be lost.