business news in context, analysis with attitude

by Kevin Coupe

The New York Times reports this morning that Anheuser-Busch InBev-owned Labatt, one of Canada's two major breweries, is ending a decades-long benefit offered to employees and retirees.

Free beer for life is no more.

The story notes that Labatt was acquired by 3G Capital, a Brazilian private equity firm, in 1995; 3G has subsequently acquired Anheuser-Busch and a number of other breweries, and it has been engaged in cost-cutting measures at virtually all of them.

"The end of beer for life, announced in late October, appears to be its most recent measure," the Times writes.

What interests me about the decision, beyond the fact that employees say that the decision will hurt company morale, is the reason cited by a company spokesman in defending it.

The decision was reached reluctantly, the spokesman said, after a review of "the retirement benefits offered by other Canadian breweries and consumer packaged goods companies," and the discovery that "none of the companies we surveyed offered free product to retirees."

One can argue the wisdom about free beer for life, and how much it cost the company. But what the decision really has cost the company, it seems to me, is a differentiating characteristic. They had something that made them different, and they cast it aside so they could be like everybody else.

That's not a great message to send to current and prospective employees. It isn't a good message to send to customers, especially in Canada, where citizens can be highly loyal to the beer made in their country ... but now are being told that those foreigners who own the company are taking away something that made it different.

It is not the specifics of this decision that bothers me. It is what appears to be corporate-think, corporate-speak, and a willingness to embrace similarities rather than differences. It is an Eye-Opener, and not in a good way.

Pass me a Full Sail. Or a Fat Tire.
KC's View: