THE KINGS OF BEER, FROTH AND ALL
UNDER THE INFLUENCE: THE UNAUTHORIZED STORY OF THE
By Peter Hernon and Terry Ganey
Simon & Schuster -- 461pp -- $24.95
During the 1860s, Eberhard Anheuser and his son-in-law Adolphus Busch, partners in a small St. Louis brewery, were having trouble persuading consumers to buy their beer. So, they tried a new approach. They began paying taverns to promote the brew. They even bought some taverns, which began to serve their beer exclusively.
In the years ahead, such tactics served the partners well. The little brewery grew into Anheuser-Busch Cos., the world's biggest beermaker, which dominates its industry in a way matched by few, if any, other consumer-product concerns. Thanks largely to its bestselling Budweiser brand, the company produces 44% of the nation's beer. Miller Brewing Co. is a distant second, with 22%. A-B's share seems to grow inexorably, while those of rivals fade.
A-B makes good beer. But the main reason for its success, according to Under the Influence, the first book about the company, is that the beer giant is tougher, rougher, and shrewder than its competition. Its marketing tactics sometimes resemble military assaults. When Miller threatened its lead during the 1970s, for instance, A-B launched a campaign consisting of 10,000 separate sales-promotion programs that divided the country into not only cities and neighborhoods but also individual streets and bars. A-B has been accused of such hardball tactics as illegally monopolizing beer sales at ballparks, racetracks, and arenas. Retailers would agree to sell A-B beers exclusively, and, in return, the company allegedly would give them fixtures, advertising services, and other inducements. While the company has denied some allegations, in other cases it has admitted such tactics, claiming they were used "for competitive reasons."
As remarkable as A-B's hegemony over the industry is the family that has run the company since the days of Adolphus Busch, who eventually pushed out the Anheusers. In this gossipy, fact-filled account by Peter Hernon and Terry Ganey, journalists with the St. Louis Post-Dispatch, the Busches, a five-generation dynasty without parallel in American business, are the chief focus.
Bloodlines in family corporations often thin out as control passes to successive generations, but the Busches just seem to get tougher. While beer may not run in their veins, the company often points out that August A. Busch III, the CEO, and August A. Busch IV, his heir apparent, were fed small amounts of beer shortly after they were born.
August III, the book says, is "as capable a corporate head as this country ever produced." Like his forebears, he is also fiercely competitive. He took over in 1975 by deposing his father, August A. "Gussie" Busch Jr. A family member cited in the book says that August III went to all the board members, many of whom had business ties with A-B, and said: "If you want to continue doing business with the brewery, you'll vote for me against my father."
Much of Under the Influence is devoted to the Busches' extracurricular activities--a Dallas-size saga of sex scandals, family feuds, and a closetful of other skeletons. In overheated tabloid-speak, Hernon and Ganey describe how the same affinities and peccadilloes have plagued each generation of Busch men: a taste for guns, booze, glamorous women, and fast cars. The family history includes an astounding number of auto accidents, several of them fatal and involving alcohol.
The Busches also flaunt extravagance. Gussie Busch assembled a menagerie of hundreds of exotic animals from around the world. He even built an artificial mountain for a herd of mountain goats. And the family loves elaborate weddings and funerals. In 1918, shortly after the funeral procession began for Adolphus Busch, all power in St. Louis was shut off for five minutes so that the entourage could observe a moment of silence. His body was interred in a huge mausoleum on which is emblazoned Veni, Vidi, Vici.
Unfortunately, the authors fall prey to their own sort of extravagance. They seem eager to share every morsel gathered during their two years of sleuthing. Fact is piled upon fact, often with little perspective or analysis.
And for the business reader, at least, the authors' priorities are skewed. They devote 14 pages to how Gussie's son Peter accidently shot and killed a friend. Yet they dismiss in five pages the company's most embarrassing scandal, an extensive kickback scheme that came to light in 1988. Top Anheuser-Busch executives were convicted of routinely accepting costly gifts from advertising agencies and other companies in exchange for business. One defendant later wrote the authors that he had "witnessed incredible greed and corruption at the highest levels of the company. I saw illegal activities and I saw flagrant personal misuse of corporate and thus shareholder funds." These are arresting allegations, but the authors apparently did not follow up on them.
The book also says surprisingly little about the multifarious ways in which the company has maintained its primacy in beer. It describes several times how family members and friends of the company often are awarded lucrative distributorships, but it doesn't even mention how Anheuser-Busch, in the view of some rivals, uses its powerful network of exclusive distributors to squeeze out competitors.
Still, taken as real-life soap opera, Under the Influence makes a lively beach read. You might bring along a cold six-pack.CHRIS WELLES Senior Writer Chris Welles generally orders club soda.