The Sleeper Issue of 2008: Beer

I got dinner and drinks yesterday with a couple of friends from St. Louis, and inquired whether they had heard about the takeover of Anheuser-Busch by Belgian beer conglomerate InBev. I was met with a couple of incredulous stares. Asking a St. Louisan about whether they've heard about the Anheuser-Busch takeover is tantamount to asking them they've ever seen Albert Pujols hit a fastball. This is very big news in St. Louis and other parts of Missouri.

The objections aren't just a matter of patriotic pride over Anheuser-Busch's flagship Budweiser brand, which might be the most recognizably American brand in the world. Rather, the issue is that it is a near-certainty that InBev will cut jobs. If InBev is smart, it will delay or limit the number of job cuts in St. Louis itself. But consolidation and cost-savings are how money is made in mergers between mature companies, and that means a certain number of 'redundant' positions are going to be eliminated. Indeed, Anheuser-Busch had already announced job cuts of 10-15 percent in June in an effort to trim its fat and make itself a less meaty target for InBev, whose takeover bid it initially considered hostile.

Ordinarily, it would be hard to tie the takeover to the political campaign. Like it or not, this is capitalism at work, and it is not clear that the merger had anything to do with the recession. Alcohol stocks are notoriously recession-proof, and BUD had remained basically flat over the past two years before ticking upward on rumors of the InBev bid, which paid its shareholders a substantial premium.

However, Cindy McCain is the chairwoman of Phoenix-based beer distributor Hensley & Co, which has substantial holdings in Anheuser-Busch. The Wall Street Journal reports that Hensley & Co stands to make around $1 million on the transaction.

This is still an issue involving a candidate's wife, rather than the candidate himself, and so the Obama campaign might need to handle it fairly delicately; it might be territory better suited for a 527 group, for instance. The other issue is that it is not immediately clear what policies might have been implemented to prevent the transaction, as Obama himself said in a trip to St. Louis earlier this month.

There is, however, one potential remedy. The deal arguably runs afoul of antitrust laws, as it increases the amount of consolidation in the domestic macrobrew industry, which SmartMoney.com describes as "basically an oligopoly of Anheuser, SABMiller and Molson Coors. Though InBev does not own any domestic labels, it does owns three of the ten best-selling brands of imported beers: Heineken, Beck's and Amstel Light.

Obama, therefore, could pressure the Federal Trade Commission on the matter, or request oversight hearings from the U.S. Senate Subcommittee on Antitrust, Competition and Consumer Rights.

The ranking member of the Antitrust Committee is Wisconsin Senator Herb Kohl; Russ Feingold is also one of its 11 members. The Wisconsin Senators can speak to the the likely job cuts in Milwaukee brought about by the recent Miller-Coors merger, which bypassed both Milwaukee and Denver to place its new headquarters in Chicago. One can imagine Obama and Feingold holding a "Save our Jobs" rally outside Anheuser-Busch headquarters in St. Louis, with Feingold promising to hold hearings on the InBev merger and Obama pledging to appoint FTC commissioners who will aggressively defend American interests. John McCain, because of his wife's interests in the transaction, would be in no position to rebut their proposals.

That's meat-and-potatoes politics at its best, and nothing goes better with meat and potatoes than a little beer.