PepsiCo, Anheuser-Busch InBev team up to save costs, rule the world
Filed under: Company News, Technology, Coca-Cola Company, Pepsico, Anheuser-Busch InBev
Beverage giants PepsiCo (PEP) and Anheuser-Busch struck an unusual alliance this week to establish a procurement system in the U.S., letting them act as one company when purchasing certain materials and services. The pact, the companies said this week, will give the corporations better prices on computers, office supplies, transportation, and other supplies and services.
PepsiCo, based in Purchase, New York, and St. Louis-based Anheuser-Busch, the U.S. subsidiary of the world's largest brewer, say they haven't determined how much money the pact will save them, but that they will invest any savings into other parts of their businesses.
The agreement makes sense, says Gary Hemphill, research director at Beverage Marketing Corp. in Manhattan. "Given present economic conditions, companies are looking to save dollars and be more creative than they have been historically," he says. Because the pact is unique, he says, other large companies will be watching; if Anheuser-Busch and PepsiCo achieve substantial savings, other sharing agreements could become more commonplace.
The arrangement may have greater implications than saving money. Analysts say the pact indicates a tighter relationship between PepsiCo, which specializes in soft drinks and snacks, and Anheuser-Busch's Belgium-based parent, Anheuser-Busch InBev (BUD). Any savings from the alliance would likely be "helpful" rather than "material," Cazenove Securities analyst Matthew Webb told FT.com. The procurement deal, he said, "may lead to further suggestions that the two companies may ultimately merge, or at least develop closer links."
The pact may also give Atlanta-based Coca-Cola Co. (KO) reason to rethink its strategy of distancing itself from beer and focusing solely on soft drinks. Such distinctions are obsolete, Credit Suisse analyst Carlos Laboy said in the Financial Times.
Sensing greater consolidation of soft drinks and beer, Laboy told FT that Coke's stance defies logic and the realities of the marketplace -- especially in light of the growing ties between archrival PepsiCo and Anheuser-Busch InBev.
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Reader Comments (Page 1 of 1)
10-15-2009 @ 6:47PM
jansimply said...
I will never drink Pepsi or eat any of their products. Next time they will learn, it is not good business to mix with politics. ALL our families have made a list of their products and put it on our refrigerators to remind us what not to buy.
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10-15-2009 @ 6:54PM
SteveP said...
I could not agree more. Pepsi (that includes Quaker Oats, Frito Lay, Taco Bell and more) are trying to tell us what to think in the social and ploitical arean, at the cost of traditional family values. I DON'T NEED their stuff, and refuse to frequent establishments that feature their products. Good for you for posting!
10-15-2009 @ 7:19PM
Elmer Fudd said...
Maybe if Wal-Mart could take over our Government, We'd have Cheaper Government.
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10-15-2009 @ 8:01PM
elmer fudd fan said...
I would be vastly more efficient and cost effective.
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10-16-2009 @ 9:33AM
steve said...
These giants need to save money? Thats a joke.Bud is pisswater.They will all be bought by China soon the only country with money.Blood money through the capatalist communist system the only one that works. Kind of like a bank hold up.Do what we say or go live in the woods.
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10-20-2009 @ 5:40PM
Dana said...
Yes - and how about Coke Company supporting domestic partnerships and marching in gay pride parades..... I can't drink COKE either...soon I will have NOTHING to drink if all these companies continue to support equality.
10-22-2009 @ 1:05PM
Equalitymonger said...
I LOVE the ignorance in Dana's statement - it is the poster statement for Ignorant America. "I won't have anything to drink all these companies continue to support equality" - SERIOUSLY?? Wow, it amazes me that people think it's OK to say such bigoted and offensive things in this day and age. Most people realized a long time ago that discrimination was unacceptable. This country was founded on the idea that all people (ALL People) were created equal...
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10-22-2009 @ 11:36PM
harold said...
Dana may not be so ignorant after all. She obviously has higher ethics than you do. Heres the skinny, Pepsi has partnered with the homosexual community to further their agenda. Thats why we're boycotting Pepsi not because we hate homosexuals but this devistating lifestyle is not accepted by the christian community and we will stand against it. Maybe you need to have a son thats being taught that liking boys is just an alternative lifestyle thats exceptable.
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