The world's largest brewer and owner of the controversial Bud Light beer brand, Anheuser-Busch InBev (AB InBev), narrowly avoided a major strike by reaching a preliminary agreement late Wednesday with the Teamsters union.
Key concerns raised by the union included wages, job security, and pension benefits. The deadline given for the strike was February 29, just a day before the new agreement was announced.
“Teamsters make the beer, Teamsters make Anheuser-Busch successful, and our members deserve the best contract. That is what we fought for and won today,” Teamsters President Sean O’Brien said in a statement.
This averts a major disruption to beer production in the US, particularly in the crucial summer season. AB InBev’s most popular beer brands include Bud Light, Budweiser, Michelob Ultra and Stella Artois.
What the Tentative 5-Year Agreement Includes
- Wage increase: A $4 per hour immediate raise, followed by a total increase of $8 per hour over five years, resulting in a 23% average wage increase.
- Job security protections: The deal addressed union concerns regarding job losses due to automation and consolidation within the industry.
- Improved benefits: This includes increased vacation accrual, higher pension contributions, and the restoration of retirement benefits for both active and retired members.
- Ending the two-tier healthcare plan: This ensured all workers would receive the same level of health benefits.
- Signing bonus: Each union member will receive a $2,500 ratification bonus.
Union members still have to vote on the agreement to make it official.
While the AB InBev deal averted a strike, rival brewery Molson Coors workers in Fort Worth remain on strike after their walkout two weeks ago.
Deal Comes After Months of Negotiations and Ad Backlash
The crisis followed months of negotiations between AB InBev and the Teamsters, representing over 5,000 brewery workers across the country.
Just hours before the announcement of the new deal, O’Brien expressed extreme discontent about what the beer giant is offering.
“The new offer that Anheuser-Busch put on the table this morning continues to ignore many of the Teamsters’ key issues. They are lowballing workers on wages, they’re not investing enough money in our members’ pensions, and they’ve made no firm commitment on job protections,” O’Brien stated at the time.
The union also criticized AB InBev’s advertising and marketing spending.
In the first half of 2023, the company spent $3.5 billion on marketing alone, which includes expensive Super Bowl ads.
This also included a June 2023 campaign titled “That’s Who We Are” that celebrates its 65,000 employees.
“Our commitment to our amazing network has never wavered — it has only grown stronger. We are looking forward, and it’s time to recognize and salute the people behind the scenes that drive our industry forward,” AB InBev CEO Brendan Whitworth commented about the launch of the ad.
But instead of pacifying its employees, the union labeled the ad as insensitive and focused on the ad spending that they thought was better spent on providing better job benefits and security.
The increase in marketing initiatives was brought about by Bud Light encountering public backlash and boycotts from conservatives following a social media marketing campaign in April 2023 that featured transgender influencer Dylan Mulvaney.
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Some AB InBev facilities even faced threats, with the brewery having to work with law enforcement to address them.
Even though Bud Light also drew support from people condemning extreme right-wing activism, which includes California Democratic Rep. Ted Lieu, it wasn't enough to quell the damage.
This resulted in Bud Light losing its top-selling position in the US market, with its overall revenue per 100 liters of beer dropping 13.5% in the third quarter of 2023.
The coming months will be crucial as AB InBev works to rebuild relations with its workforce and regain market share for Bud Light and its other brands.
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