Bitter Brew: The Rise and Fall of Anheuser-Busch and America's Kings of Beer (2 page)

So a lot was riding on the shoulders of August Anheuser Busch IV as the audience at the Hyatt waited for him to make his appearance. His “watch” had come at a portentous time for the company, bridging a glorious past and a perilous future. His vision going forward could determine the fate of the distributors' families, and the families of thousands of A-B employees and suppliers.

Thirty minutes into the wait, one of the Fourth's trusted lieutenants, vice president of marketing David Peacock, materialized at the podium and apologized for the “tardiness.” He explained vaguely that the company plane had had trouble landing at the airport and promised, “August will be here shortly.” He then added that Busch was “taking medication for a sinus infection.” The audience registered a collective “Huh?” at the seeming non sequitur, and it quickly became apparent that Peacock was vamping for time.

Another ten minutes passed before Busch finally entered the room from stage left, surrounded by his ever-present phalanx of inner-circle executives, “the entourage,” as they were called inside the company. Tanned and perfectly coiffed, wearing his trademark open-neck dress shirt, slacks, and cowboy boots, he stepped up to the microphone and, barely acknowledging the audience, launched into his prepared remarks. Casual about rehearsing for his public speaking engagements, Busch was known for sometimes going off script, losing focus and relying on his good looks and charm to get him through. Most often he had not even looked at the speech before reading it in the teleprompter. Once, in an appearance before the Beer Institute in Boca Raton, Florida, he was supposed to say, “When our forefathers arrived on these shores, one of the first things they did was to erect a beer house.” What came out of his mouth instead was, “When our forefathers arrived on these shores with erections …” He laughed off the arguably Freudian flub (“Did I really say that?”), and many in the audience laughed along with him, but his twenty-seven-year-old wife, Kate, sitting next to him on the dais, dropped her forehead to the table in embarrassment.

There was no laughter on this day. From the outset, it was clear that something was wrong. As Busch attempted to address the effect of the slowing economy on the beer business, he slurred words and stumbled over phrases. At first, some in the audience thought he was having trouble with the teleprompter, but it soon seemed that the Fourth was seriously impaired, and not from overindulging in an A-B product or taking some mystery sinus medicine. No, this appeared to be a deep state of stoned. Unmindful of the rising murmur and the concerned looks on the faces in the crowd, he plowed on for several excruciating minutes, speaking in a kind of slow-mo monotone. Finally, mercifully, David Peacock intervened. He leaned in to the microphone and said, “Obviously, August is not feeling well.” He then took Busch by the arm and led him off the stage. Busch went docilely, stumbling once before he disappeared from view.

The meeting was over, but the audience remained seated, stunned, absorbing the impact of a quintessential “holy shit” moment. It wasn't so much that Busch was bombed. His reputation as a party animal stretched back to his college days, when a Chappaquiddick-type incident left a twenty-two-year-old cocktail waitress lying dead in a roadside ditch next to Busch's overturned Corvette and Busch, who had walked away from the scene, telling police investigators hours later that he couldn't remember what happened or who was driving his car. His father had extricated him from that jam and a number of others over the years, and A-B security men had cleaned up countless lesser messes that “the Third” was never told about. In a way, bad-boy behavior was expected of the Fourth. He was a Busch, after all, a member of a family in which hard drinking, fast driving, womanizing, and gunplay were part of the male curriculum. Both his father and his grandfather, the legendary beer baron August A. (“Gussie”) Busch Jr., had hard-earned reputations as hell-raisers in their youth.

But the incident at the Hyatt was different; it crossed a line that hadn't been crossed before. All of the Fourth's previous escapades could be dismissed as after-hours personal indiscretions. But this occurred on the job, in the course of his daily duties as chief executive of the publicly traded, $19 billion-a-year Fortune 500 company, and in full view of the entire industry. That's what really shocked the audience at the Hyatt. There had always been questions inside the company about the Fourth's fitness for the top job, and when August III prevailed upon the board to name his son CEO in 2006, the widespread assumption was that the elder Busch had made sure there were loyal retainers in place among management and the board of directors who would protect August IV and the company from just this sort of thing. But all the king's horses and all the king's men hadn't been able to prevent the debacle. Clearly, the wheels had come off the beer wagon.

Word of the Fourth's performance poured out of the Hyatt ballroom and into the bar, and flowed down the escalator to the main reception room. Within minutes it was the talk of the NBWA conference. Cell phones flashed the information back to A-B home base at 1 Busch Place in St. Louis, where it was treated as a potential PR disaster.

It proved to be worse than that. The Fourth's personal problems, which for years had been denied, ignored, or covered up by those around him, were about to have worldwide repercussions. Three and a half weeks later, on June 11, InBev, a four-year-old company based in Belgium but controlled by a trio of Brazilian billionaires, made an unsolicited and utterly unwelcome bid to acquire Anheuser-Busch for $46.5 billion. When the dust settled on what became the largest cash acquisition in history, America had lost one of its most beloved companies, and more than a thousand A-B employees in St. Louis had lost their jobs.

The Fourth and his father were among the executives who made fortunes in the deal—they walked away with nearly half a billion dollars between them—but their long-rocky relationship was by then irrevocably broken. They no longer spoke to each other.

Untethered from both family expectations and company responsibilities for the first time in his life, August IV quickly descended into an abyss. According to friends, family members, and court documents, when the police came for him in February 2010, America's last king of beer was holed up in his mansion, grievously addicted to drugs, gripped by paranoia, beset by hallucinations, and armed with hundreds of high-powered weapons, including several .50-caliber machine guns.

“It's like the final scene in
Scarface
,” sighed one Busch family member, slipping almost unconsciously into an imitation of Al Pacino as doomed drug kingpin Tony Montana: “‘Say hello to my little friend.'”

A crowd began gathering at the brewery gates in the early evening of April 7, 1933, milling around near the intersection of Broadway and Pestalozzi Streets on the south side of the city near the river. As the hands of the lighted clock on the Gothic Brew House tower approached midnight, the number of people swelled to an estimated 35,000, standing shoulder to shoulder for blocks around, growing increasingly boisterous in anticipation: America's thirteen-year prohibition against the sale of beer was about to end.

“Happy days are here again, the skies above are clear again,” they roared out in a raucous chorus, “Let us sing a song of cheer again.”

Similar scenes played out in smaller scale all around town. Over at Kyum Brothers Café at Ninth and Pine, patrons sang Irving Berlin's teetotaler's lament “The Near Future”—“
How dry I am …
”—while hundreds of customers at the German House restaurant joined in an old Deutschland drinking song, “Was Wilst du Haben?” (What will you have?).

Inside the iron gates of the giant brewery complex, 300 trucks pressed up to the loading dock, while 1,200 more lined up bumper-to-bumper on the street outside, ready to take their place. From within the plant the rumble of machinery signaled that the long-hibernating giant was now fully awake, as seemingly endless columns of brown Budweiser bottles, with their famous red-and-white labels, clattered along snaking conveyor belts to be packed in wooden crates proudly stamped, “Property of Anheuser-Busch, St. Louis Mo.”

On the bottling plant floor, brewery president August A. Busch Sr. and his two sons, Adolphus III and August Jr., posed for photographers as they packed a twenty-four-count crate destined for President Franklin D. Roosevelt, who'd swept into office in November on the promise of a “new deal” for America that included the repeal of the Eighteenth Amendment, which banned the manufacture and sale of alcoholic beverages in the United States.

Full repeal would not come for eight more months because it required another constitutional amendment and thus needed ratification by the legislatures in thirty-six (three-fourths) of the forty-eight states. But FDR had already made good on his campaign promise to the nation's brewers. On March 4, nine days after his inauguration, he asked Congress to immediately modify the so-called Volstead Act, which had set the maximum legal alcoholic content of beverages at .05 percent, to allow the sale of beer with a 3.2 percent alcohol. “I deem action at this time to be of highest importance,” he said. Both the House and the Senate quickly complied, setting April 8 as the date when the sale of beer could resume.

The Busches had been preparing for this moment ever since the election, spending more than $7 million to refit and modernize their plant, purchase supplies, and gather the ingredients for the brewing process, notably the expensive Bohemian hops they considered crucial to the character of Budweiser, which had been the No. 1 selling beer in the world when America's state lawmakers shut off the tap.

Eager to reestablish their brand as the “King of Beers,” the company's board of directors had authorized August Jr., the superintendent of the brewery, to buy several teams of Clydesdale draft horses “for advertising purposes.” Gussie, as he was called, purchased sixteen of the massive 2,000-pound animals for $21,000 at the Kansas City stockyards. He also found two wooden wagons from back in the days when the company employed eight hundred teams of horses to deliver its beer, and set about having them restored to the exacting standards of his late grandfather, brewery founder Adolphus Busch, who liked to conduct weekly inspections from a viewing stand, with his son August at his side as all the drivers passed in parade, hoping to win the $25 prize for the best-kept team and wagon.

Gussie's wagon restoration was conducted in secrecy behind locked doors in the brewery's famed Circular Stable because he wanted to surprise his father with this majestic symbol of the company's history and the old man's youth. Gussie even tracked down Billy Wales, who had been the company's best eight-horse driver for years prior to Prohibition, when he left to work in the Chicago stockyards because he couldn't bear to be away from horses.

When all was ready, Gussie and his brother Adolphus III called their father out of his office, telling him they wanted to show him a new automobile. Instead, as they walked across the street toward the stable, the big doors swung open and the first team of perfectly matched Clydesdales—each with white stockings and feathers, a white blaze on its face, and white ribbons braided into its mane and tail—high-stepped into view, pulling a bright red brass-trimmed wagon with Billy Wales sitting up in the driver's seat. Speechless, the old man wept at the sight.

And now, finally, the big moment had arrived. A brass band was playing outside the brewery as the crowd counted down the Brew House clock. At the stroke of midnight, the plant whistles shrieked, setting off widespread jubilation, with cars honking and bells ringing all across the city. At 12:01, beer trucks began rolling through the gates and onto the streets. Sirens wailed as police cars escorted the first truck to the St. Louis airport, where one case of Budweiser was loaded onto a Ford Trimotor plane bound for Washington, D.C. and President Roosevelt, and another was put aboard a flight to Newark, New Jersey, for former New York governor Al Smith, a hero to August Sr. because of his anti-Prohibition presidential campaign against Herbert Hoover in 1928. A six-horse hitch of Clydesdales had been sent ahead to Newark, New Jersey, where it now waited on the tarmac to carry the precious cargo on the last leg of the journey.

In the train yard of the Anheuser-Busch complex, newly hired workers loaded cases of bottled Budweiser onto 130 freight cars while the brewery's fleet of bright red trucks fanned out through the city, making priority deliveries to the Jefferson, Mayfair, Lennox, and Chase Park Plaza hotels, where crowds of well-heeled patrons waited. In the lobby of the bottling plant, Gussie Busch stepped to a microphone that had been set up by the fledgling CBS Radio Network for a nationally broadcast report on the celebrations going on in three “beer cities”—St. Louis, Chicago, and Milwaukee. As his ailing father listened to the radio broadcast at his home, Gussie addressed the nation for the first time:

“April seventh is here, and it is a real occasion for thankfulness, marking a newfound freedom for the American people, made possible by the wisdom, foresight and courage of a great president and the cooperation of an understanding Congress. There is a song in our hearts: it's ‘Happy Days Are Here Again.' And they
are
here again,” he said, “for out of a maze of confusion and anxiety has come a beacon light to guide the way to better times. Happy, grateful men are back to work after what seemed an endless idleness.”

Reading from a script he surely had not written but every word of which he certainly believed, Gussie went on for more than two minutes, linking the country's economic future to that of the brewing industry. “Once again freight cars are rolling in, loaded with grain from American farms, bottles and cases and various equipment, as well as coal and supplies from industries long suffering from the Depression, while others soon will be rolling out and onward, contributing their share toward the rehabilitation of industry, agriculture, and transportation.” With brewers and politicians now working together, he said, “a new and greater era looms on the horizon for our people, one that will result in a happier and more secure existence for all of us.”