How hard is it for Budweiser to be a secondary brand in the UK in comparison to Foster's and Carling, given your dominance in the US? Is it the same in the rest of Europe?
We don't view ourselves as a secondary brand. We are the leading American lager on sale in the UK and have been the number one premium packaged lager in the on-trade for a number of years.
We operate in a different segment from Foster's and Carling but we have recently entered the standard lager market with the launch of Bud Silver. It's too early to comment on sales but since its national launch last month we have seen steady distribution growth across the on and off-trade. This month we have begun a trial of Bud Silver draught through St Austell Brewery. We recognize that standard lager is a growing segment in the UK and Bud Silver gives us an opportunity to participate in this growth.
We are a small but growing player in the rest of Europe and undoubtedly our US position helps us in terms of brand awareness and additional resource.
Many people have said the future for lager is in draught. Do you see a bright future for bottled beers in the UK market?
We believe that premium packaged lagers still have a role to play which is occasion based. Budweiser's consumer pull in the on-trade is particularly strong in late night bars and clubs, between Thursday and Saturday amongst 18 to 34-year-old men.
We recognize the growth of the draught sector and in particular the consumer desire for "quality" products. Our research tells us that consumers associate "cold" beer with quality, Budweiser on draught has always been served cold - between two and five degrees - and we will be looking to develop communication around this cold offering in the coming months.
Budweiser's draught distribution is currently around 4,000 outlets. We are looking to accelerate this growth and show commitment to the sector.
What do you see as the key challenges for the beer market in the next few years in the UK?
The face of the drinks industry has changed dramatically over the past few years, ranging from legislative reform of the licensing hours to the media spotlight focusing on social responsibility issues.
The main challenge our industry faces is recruitment and getting consumers into, or back into beer. With the growth of wines and spirits over recent years and now cider, we need to remind consumers why beer is good.
New product development is going to be key in this area, both in terms of bringing new liquids to market and in innovative packaging. We are fortunate to benefit from a wide portfolio of products in the US and we are continually evaluating whether brands available in the US are appropriate for this market, and whether they can gain enough share to make importing a worthwhile investment.
We are always looking at ways of growing the category and bringing innovation to our customers to help them gain incremental share and profit; Bud Silver is one such example. It's made specifically for the UK consumer and packaged for the on-trade in a unique one pint "gripper" bottle.
Everyone is going to be closely watching the results and impact of the Scottish smoking ban to assess its wider effect for the England and Wales 2007 legislation. Anheuser-Busch has been working with licensees in Scotland to help them make their outdoor areas more attractive to consumers; this has included providing furniture for seating areas, branded canopies and umbrellas and outdoor signage to encourage footfall. We will be extending this outdoor visibility campaign in 2007 in advance of the ban.
Are you at all affected in Europe by the Budweiser v Budvar trademark dispute?
Any time a company is involved in a trademark dispute it will have some impact on your business. However, over the past 10 years Anheuser-Busch has made great strides in strengthening its trademark rights in Europe. As a result, we have the right to sell "Budweiser" or "Bud" in 21 of the 25 EU countries. So while there has been some impact, it has been reduced significantly.
How do you view the pricing policies of supermarkets in the UK with regard to beer? Do you think they use it as a loss leader?
There has obviously been a great deal of aggressive pricing by the multiples and it is a challenging area in which to operate. The important thing for Anheuser-Busch is to remain focused on delivering the best product we can to our consumers, and working with retailers to ensure that we maximise all available opportunities.
Our strategy is to continue to position and promote Budweiser as a premium brand in the UK.