A-B InBev Ignites Brewing Brouhaha

Ad sales execs are defying an Anheuser-Busch InBev directive that would have them wait as many as 120 days to be reimbursed for airtime, telling the Belgian-owned brewing giant to stick its ultimatum where the “zon don’t schijnen.”According to mulitple sources, all major broadcast and cable nets have condemnedA-B InBev’s unilateral order, refusing to comply with what one sales exec called “a shakedown.” The brewer has yet to respond to the opposition, which began fermenting on Feb. 5, after A-B InBev sent its media suppliers a letter spelling out the new payment schedule.“Effective March 1, 2009, Anheuser-Busch ... will adopt the A-B InBev policy governing payment terms for media supplier invoices at 120 days,” read the memo, which was signed by vp, procurement, Tom Adamitis and vp, finance, David Almeida. A-B InBev added that a failure to respond by Feb. 28 would constitute compliance.A-B InBev’s media partners were particularly disenchanted with the threatening tone struck by the letter. “If you are not able to work with the change … we may have to consider an alternative supplier,” Adamitis and Almeida wrote, adding that the terms are “consistent with standards used by other multinational companies.” “That stuff about how this is how we do business over in Europe is a load of [crap] and we told them as much,” said one cable ad sales chief.The danger of acquiescing to A-B InBev’s demands was apparent last month as London-based Diageo—the holding company behind powerhouse brands such as Guinness, Smirnoff and Johnnie Walker—began informing suppliers that it would push back payments to 60 days. The industry standard is usually accepted as 30.“We’re not going to change our policy for one client, because if we let A-B get away with this, everyone’s going to want to push their payments back,” said one ad sales boss. “I’d lose more money by agreeing to this than I would if I cut my price.” In a statement, A-B said the decision was made after a month-long review of its global payment policies and that the new policy would help them better manage their business.Many execs expressed concern that the letter was merely the opening volley in a protracted culture clash pitting the Belgians against the U.S. media business. “St. Louis is just following orders,” said one ad sales exec. “But what they’re going to find is when they try to muscle the big guys, the big guys are going to muscle them right back.” Also refusing to play ball are two major TV station groups and at least one radio group. Local stations willing to compromise are said to be negotiating for a 75- to 90-day schedule.

Convergent TV

A-B InBev Ignites Brewing Brouhaha

Anthony Crupi

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Anthony Crupi