Economics

Introduction:

When most people think about the attributes of beer, words like crisp and refreshing come to mind, or drinking a nice cold one on a hot summer day. According to Beer Serves America, the beer industry employs more than 890,000 Americans in virtually every corner of the U.S. These jobs help strengthen many sectors of the economy. Payroll exceeds $21 billion, with federal, state, and local governments receiving tax revenue in excess of $30 billion annually. (www.beerservesamerica.org). According to a January 2001 study by Standard & Poor’s DRI, 44% of every Beer sold in the United States was consumed by taxes. The tax burden on beer is far higher than the average consumer good in the U.S. economy: total federal, state, and local taxes equal 31.7% of final sales of all products (GNP) in the U.S. The income generated by the beer industry manufacturers and related sales and distribution partners added $10.7 billion in Federal personal income, profit, and payroll revenues and $3.6 billion in similar state-local revenues.

Nearly a century and a half old, Anheuser-Busch Company, Inc. is the world’s largest brewing company. The company operates fourteen breweries, twelve in the United States and two overseas. The focus of Anheuser-Busch’s operations and resources is beer, adventure park entertainment and packaging, though the company has interest in other areas. Throughout its life span, Anheuser-Busch has been involved with aluminum beverage container recycling, malt production, rice milling, real estate development, turf farming, creative services, metalized paper label printing and transportation services. Above all other aspects, Anheuser-Busch is best known for its beer operations. We will attempt to uncover a number of reasons Anheuser-Busch is considered the world’s leader in beer.

Anheuser-Busch Company, Inc. is the world’s largest brewing company and has been operating for over 150 years. Anheuser-Busch established international operations in 1981 and currently sells beer in more than 80 countries. The company has been very successful since it’s beginning, as several generations of Busch’s have guided it throughout the past century and a half, currently is under the leadership of August A. Busch, III who has opened three additional breweries, acquired another one and has introduced numerous other beer products under his guidance. The company makes several brands of beer such as Budweiser, Bud Light, Busch, and Michelob, as is also well known for their specialty beers such as Red Wolf Lager, ZiegenBock Amber, and O'Doul's which is a non-alcoholic beer.

Knowing the history of Anheuser-Busch we will identify and analyze six economic indicators that contribute to or hamper the possibility of success in today’s market. The six indicators that we have chosen are the inflation rate as it is measured by the consumer price index (CPI), personal income, the impact of the real GDP, unemployment rate, foreign exchange rate, and retail sales.

INFLATION RATE MEASURED BY CPI: (Consumer Price Index)

Inflation is a continual rise in the price level and the price level is an index of all prices in the economy. Therefore, the Consumer Price Index (CPI) is a measure of the average change in prices over time of goods and services purchased by households. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) the CPI