Recently, former Anheuser-Busch executive Anson Frericks questioned the rationale of Microsoft co-founder Bill Gates for making a large investment in Bud Light’s parent company, Anheuser-Busch. Frericks called the billionaire’s decision a mistake.
During the second quarter of this year, the Bill and Melinda Gates Foundation trust purchased approximately 1.7 million shares of Anheuser-Busch stock, totaling almost $100 million. Frericks noted that Gates previously made a massive beer industry bet that endured substantial losses, investing roughly $900 million into Heineken only for it to drop 10 percent subsequently.
“So if I was looking for advice on investing in software companies, tech companies, I might go to Bill Gates. But if you’re looking at the beer industry, he doesn’t have a great track record of investing in winners at this point,” he said. Contrary to Gates, Frericks has intimate insight into the beer industry through his time as President of Anheuser-Busch Sales & Distribution.
The conservative businessman also mentioned that Bud Light and, by extension, Anheuser-Busch are already dealing with a public relations crisis stemming from a palpable disconnect with its target audience. According to the former executive, having Bill Gates as a prominent investor doesn’t help their case.
“For the company’s sake, they’d probably be better off [with] maybe somebody who is more of, kind of the everyman type of person, maybe like a Rob Gronkowski or somebody like that was investing into Anheuser-Busch, not necessarily somebody like Bill Gates,” Frericks said.
Substantiating Frericks’ claim that Bill Gates is making a mistake, at least in the short term, with this investment, the latest Bud Light sales data paints a bleak image as sales continue to decline nearly 30 percent. The American Tribune reported on a recent analysis that showed the beer’s sales fell 26.9 percent in dollars and over 30 percent in volume as we approach nearly half a year since the Dylan Mulvaney controversy began.
Publisher of Beer Business Daily, Harry Schuhmacher, commented on the perpetually plummeting Bud Light sales, leading him to believe the boycott could persist into the foreseeable future, where some customers are “lost forever.”
"*" indicates required fields
“You see Bud Light still just stubbornly down around 30% in volume compared to last year, which is where it’s been since May or June,” Schuhmacher stated. “That tells me that this is quasi-permanent, meaning those consumers are just lost forever.”
When it comes to running a corporation, Frericks is a clear proponent of shareholder theory. This business model states the number one objective of a publicly traded company is to generate value for the real owners of the business, those who own stock in it.
Many conservatives believe that if companies would solely pursue profit for shareholders, there wouldn’t be any capacity for executives to make woke, disastrous decisions that destroy billions in market value, as demonstrated by businesses such as Target and Bud Light.
“There’s one camp that says that Anheuser-Busch, they have a fiduciary responsibility to their shareholders and to take a look at just providing great products and services for their shareholders,” Frericks said. “That’s the camp that I am in.”