Dethroning the King (60 page)

In late 2008, Schuhmacher told The Fourth that he wanted to present him with an award at his annual beer summit. The Fourth was no longer in power, but it would give him a chance to break bread one last time with his former distributors and other friends in the industry. August waffled for weeks as he considered it, weighing the type of reception he thought he'd receive from the crowd. He finally gave Schuhmacher an answer in the last of his e-mails, sent late at night and, Schuhmacher said, probably under the influence.

“It was just a desperate e-mail of self-pity and regret. He decided not to do it,” he recounted. Still, “I don't think the harm that came to that company was a result of anything he did.”

While InBev was ultimately the aggressor, Anheuser-Busch fell victim to its own insularity and hubris. It was too risk-averse, too provincial, too hemmed-in to an aging strategy, and too unwilling to accept that the world was rapidly changing whether it liked it or not. The Third ran Anheuser-Busch like a monarch, and his loyal board of directors and subordinates were all too willing over the years to oblige him. It all contributed to an atmosphere of delusion in which Anheuser-Busch believed it was safe from a takeover not because it had actual protections, but because the sheer concept was simply unthinkable. In August III's case, one man's brilliance was his hubris.

In many ways, the script of what happened at Anheuser-Busch was written not by August Busch IV but by August Busch III, said people close to the company. August III ran one of the country's most iconic institutions and was the lion of the brewing industry, but he also made it all but impossible for Anheuser-Busch to sustain itself and to maintain a strong headquarters in St. Louis. He knew how to operate a U.S.-centric brewery, they said, and he made some important forays into China. When the beer industry turned south, however, the insular strategies he had put in place weren't enough to ensure Anheuser-Busch's survival.

“Do I believe that the guy was probably great at running a domestic brewing company?” questioned one company insider. “Yes. But as a great macro strategist, thinking about what the future would bring and preparing them for it, the guy doesn't get marks there.

“I think history has to suggest that the guy was way too pigheaded and stubborn to do what he needed to do to put that company in position to have a future.”

Plenty of forces afoot that summer helped to drive Anheuser-Busch into InBev's arms: a fleetingly perfect set of market conditions, an apathetic group of American beer drinkers, and a board that needed—and found—an escape hatch.

Anheuser's isolationist history drove the result in the end, and made everything that occurred during August IV's tenure a footnote to a much bigger story. Anheuser-Busch's fate was sealed not during his year and a half in office but during the decades-long span in which it was run by a man who couldn't fathom that anyone else could fill his shoes. He ultimately ensured that no one did.

“There were not enough people around him who would tell him when he was talking crap,” said the head of a rival brewer. “He ruled by fear; he was megalomaniacal.

“Their strength became their weakness. They became extraordinarily successful pushing the formula of one man. But that's the problem with great men. They end up breathing their own smoke, believing their own stories.”

Page 7 “One newspaper report had included ...” Neil Hume, “InBev Targets Takeover of Anheuser-Busch,” FT Alphaville, May 23, 2008.

Page 7 “The fact that we're going to be forced to listen ...” Robert Lachky, interview by author, St. Louis, Missouri, November 5, 2009.

Page 10 “Whoa! Over 100 results found ...”
www.whitepages.com
(accessed April 2010).

Page 10 “To keep “Air Bud” running smoothly ...” Todd C. Frankel, “A-B Jets Linger as Clipped Wings,” St. Louis Post-Dispatch, January 10, 2010, A1.

Page 11 “They should feel very important....” Rick Hill, interview by author, St. Louis, Missouri, November 4, 2009.

Page 11 “During The Third's tenure ...” William Finnie, phone interview by author, October 20, 2009.

Page 24 “Born in St. Louis on March 28, 1899 ...”
New York Times
, September 30, 1989, Obituaries.

Page 24 “He started out in 1922 ...”
Encyclopaedia Britannica,
August Anheuser Busch, Jr.

Page 25 “Eschewing planes and buses . . .” “The Baron of Beer,”
Time,
July 11, 1955, Cover story.
www.time.com/time/magazine/article/0,9171,807368-1,00.html
.

Page 26 “All the pain was worth it . . .” Ibid.

Page 26 “He owned a camel ...” Ibid.

Page 26 “Adalbert “Adie” von Gontard . . .” Peter Hernon and Terry Ganey,
Under the Influence
(New York Simon & Schuster, 1991), 168.

Page 26 “If Diana was the People's Princess . . .” Matthew Hathaway and Jeremiah McWilliams, “What Would We Be without A-B?”
St. Louis Post-Dispatch
, June 1, 2008, A1.

Page 27 “People liked to joke . . .”
Under the Influence
, 335.

Page 28 “Edward Vogel, who had been a company vice president . . .”
Under the Influence
, 233.

Page 31 “It served as a forceful reprimand . . .”
Under the Influence
, 268.

Page 31 “The talk . . .”
Under the Influence
, 268, citing
BusinessWeek
, “When You Say Busch, You've Said it All,” February 17, 1986.

Page 31 “I couldn't give my secretary . . .”
Under the Influence
, 271.

Page 31 “After Gussie's lieutenant . . .”
Under the Influence
, 275.

Page 32 “Confident that he had the backing . . .”
Under the Influence
, 287-289. P

age 32 “This should be the best thing . . .” Walter C. Reisinger, Jr., interview by author, St. Louis, Missouri, November 4, 2009.

Page 33 “August has stabbed my father in the back, . . .”
Under the Influence
, 287.

Page 33 “He and I had years of a great relationship . . .” Outstanding Directors Exchange
Agenda,
July 14, 2008, 6,
www.theodx.com/outstandingdirectors/Busch%20071408%20Agenda%20issue_fnl.pdf
.

Page 33 “They didn't speak for roughly a decade . . .” David Kesmodel, “Anheuser's Chief Must Fight for His Legacy,”
Wall Street Journal,
May 27, 2008, A1.

Page 33 “For his work as executor . . .”
Under the Influence
, 402-404.

Page 34 “The company ultimately paid . . .”
New York Times
Abstracts, February 6, 1977.

Page 35 “One former ad agency staffer . . .” Steve Kopcha, interview by author, Columbia, Missouri, November 5, 2009.

Page 39 “He had been known to pick up the phone . . .” Rick Hill and Walter C. Reisinger, Jr., interview by author, St. Louis, Missouri, November 4, 2009.

Page 40 “Now let's get to work . . .” John Greening, phone interview by author, October 6, 2009.

Page 41 “When he fixes his stare . . .” Ellyn E. Spragins, Marc Frons, “When You Say Busch, You've Said it All,”
BusinessWeek
, February 17, 1986, 58-63.

Page 43 “He was known to take off his watch ...” Hill and Reisinger, interview by author, St. Louis, Missouri, November 4, 2009.

Page 43 “If the restrooms are unclean . . .” Peter Hernon, “Going on 90,”
St. Louis Post-Dispatch,
March 5, 1989, 1C.

Page 44 “He once demanded that a television commercial be reshot . . .” Patricia Sellers, “How Busch Wins in a Doggy Market,”
Fortune,
June 22, 1987, 99.

Page 44 “He performed the same ritual . . .” Charlie Claggett, interview by author, St. Louis, Missouri, November 4, 2009.

Page 47 “He knew everything.” William Finnie, phone interview by author, October 20, 2009.

Page 47 “Anyone scheduled to accompany him . . .” Rick Hill, interview by author, St. Louis, Missouri, November 4, 2009.

Page 49 “I never heard him say a braggy thing . . .” Finnie, phone interview by author, October 20, 2009.

Page 49 “You can't predict the likes and dislikes . . .” Thomas C. Hayes, “August Busch, King of Beer,”
New York Times,
October 12, 1980, F1.

Page 49 “By August III's last year . . .” David Kesmodel, “Anheuser CEO Fights for His Legacy,”
Wall Street Journal
, ay 27, 2008.

Page 50 “Peter pleaded guilty . . .” “Peter Busch Sentenced to 5 Yrs Probation, St. Louis, for Manslaughter in Shooting Death of Friend David Leeker,”
New York Times
Abstracts via United Press International, March 1, 1977, 17.

Page 50 “Billy Busch, another of The Third's half-brothers . . .” Peter Hernon, “‘Busch Blood' Plays Role in Custody Battle, Mother Says,”
St. Louis Post-Dispatch,
October 16, 1988, 1C.

Page 50 “Billy ratcheted down his profile . . .” Christopher Tritto, “Busch Family Eyes Return to Brewing Biz,”
St. Louis Business Journal,
August 14, 2009.

Page 50 “The Third married Susan Hornibeck . . .” Jerry Berger and John M. McGuire, “Near Beer: Decades After Their Much Talked-about Divorce, Susan Busch Remains on Good Terms with August Busch III; and, for That Matter, with All of St. Louis,”
St. Louis Post-Dispatch,
June 13, 1995, 1D.

Page 50 “Following a wedding reception . . .” Ibid.

Page 51 “Amid rumors . . .”
Under the Influence
, 246.

Page 51 “She and The Third used to get together . . .” Berger and McGuire, “Near Beer.”

Page 51 “She called Ginny, his second wife . . .” Ibid.

Page 52 “I learned in my 20s and 30s . . .” Hayes, “August Busch, King of Beer.”

Page 52 “As part of the probe . . .” Robert Johnson, John Koten, and Charles F. McCoy, “State of Shock Anheuser-Busch Cos. Is Shaken by Its Probe of Improper Payments,”
Wall Street Journal,
March 31, 1987.

Page 53 “The first time Schuhmacher met The Third ...” Harry Schuhmacher, phone interview by author, April 27, 2010.

Page 53 “Although the company had a strict policy . . .” Johnson, Koten, and McCoy, “State of Shock.”

Page 54 “He had been Anheuser-Busch's “inspirational leader,” . . .” Ibid.

Page 54 “The Third's determination . . .” Stephen Phillips, “No. 2 Busch Official Quits Amid Turmoil,”
New York Times,
March 26, 1987.

Page 58 “Many beer connoisseurs . . .” Budweiser's overall rating as of July 11, 2010, is “‘D+' Avoid,” with 1,207 reviews, representative adjectives pulled from reviews by top reviewers “feloniousmonk,” “BuckeyeNation,” and “mikesgroove,”
BeerAdvocate.com
.

Page 59 “John Murphy, Miller's president . . .” Peter Hernon and Terry Ganey,
Under the Influence
(New York Simon & Schuster, 1991), 317.

Page 60 “And he meant every word of it . . .” Adrienne Carter, “Miller Brewing It's Norman Time,”
BusinessWeek
, May 29, 2006.

Page 60 “I'm more direct . . .” Patricia Sellers, “How Busch Wins in a Doggy Market,”
Fortune
, June 22, 1987.

Page 61 “By 1985, Anheuser-Busch . . .” “AdAge Encyclopedia Anheuser-Busch,”
Advertising Age
, September 15, 2003.

Page 61 “In 1989, it spent $5 million . . .” Judith VandeWater, “Anheuser-Busch Super Advertiser,”
St. Louis Post-Dispatch
, January 9, 1989, 5.