The King of Beers / Probably the Best Beer in the World

I was reading a book on the history of chemistry and the work of Niels Bohr when I came across the most incredible reference.  It seems this man who had such an incredible effect upon the modern world did his work in a place called the Institute for Theoretical Physics of the University of Copenhagen.  This institute was created by Bohr in 1921 with money donated by the Carlsberg Foundation.   Now, I read this in Singapore, which is a country whose beer market is dominated by Tiger and Carlsberg above all others.

Realizing that I often bought products from a beer company whose charity has a place in history, I checked out their website.   To my great surprise, I learned that the Carlsberg Group does not dump money into their foundation to ease their tax burden.  Nor does the foundation operate as a non-profit marketing tool for the company.  In Denmark, things are on their head.

The founder of the Carlsberg Brewery created his foundation in 1876.  Then, not wanting his son to run his brewery, he died in 1887 willing the ownership of the Carlsberg Group to the Carlsberg Foundation. 

From 1902 to now, the Carlsberg Foundation has had 51% control of the Carlsberg Group.  In this way, the charity owns the company.  When we buy beer from them, we give our money to the company and they pass the profits on to their shareholders and to their owner.  For this reason the following statements can be made.

1.  Every beer we buy funds science, art, and historic preservation in Copenhagan.
2.  The Carlsberg Group will never be bought by another company.
3.  The Carlsberg Group will never leave Copenhagan.

Now, as I learned this about Carlsberg, they were moving up in rank from the 5th biggest beer company in the world to the 4th.  A company ahead of them was at that time in the process of disappearing.

In this picture we see the Busch Stadium we grew up with being removed and replaced by a Wrigley Field imitation.  Wrigley Field being the home of our most hated rival, the Chicago Cubs.  Let's go to the beginning.

1876 is the year the Carlsberg Foundation was created.  It is also the year St. Louis City left St. Louis County.  The USA was 100 years old!  Adolphus Busch and his friend Carl Conrad made a new beer and he called it Budweiser. 

In 1953, Anheuser Busch purchased the St. Louis Cardinals.  In the 1960s, they built the old Busch Stadium for them, and by the 1990s the King of Beers ruled over happy St. Louisans who loved their beer and their baseball.

The Busch dynasty ruled St. Louis for a hundred years and new princes defended the legacies of their fathers.  In 1996, things started to go differently.  The family sold the St. Louis Cardinals for $150 million to a private group of investors.  Those new owners went on to demand a new stadium from the city.  They threatened to move to the county or to Illinois if the city did not grant them the funds for a new stadium. 
(Timeline of events and money here with anti-Slay polemics)
The new stadium and accompanying Ballpark Village cost in excess of $600 million with quite a bit more than $150 million coming from the city of St. Louis.  The new stadium was also named Busch, but only until 2025.  Perhaps at that point it will get a new name.  If the Sears Tower can be renamed Willis tower, then nothing is sacred.

In the summer of 2008, the board of Anheuser-Busch agreed to sell themselves to the Belgian-Brazilian company InBev for $52 billion.  The shareholders and board members pocketed some of that money, and the new St. Louis based European company Anheuser Busch InBev began restructuring.

InBev didn't actually have $52 billion.  They borrowed it.  To pay back their debt, they began chopping up and selling off the Anheuser Busch empire.  These sales were not done to improve the company, these sales were to pay off the debts of their new owners.  Most visible, the Busch Entertainment Corporation which owns Busch Gardens and Sea World was relocated from St. Louis to Orlando and promptly sold off to a British equity firm.  We could also take note of the fact that there are a few fewer jobs and clydesdales around now.



Now, comparing Carlsberg to Anheuser-Busch is a little frustrating.  Maybe Carlsberg could be eaten by a bigger company.  Let's look at the current list of brewers by size,
1. AB InBev
2. SABMiller
3. Heineken
4. Carlsberg
5. Molson Coors

SABMiller and Molson Coors are moving towards each other with MillerCoors (based in nearby Chicago).  If the  3rd and 5th merged, Carlsberg would still be 4th.  When the top three merge into one ABISABMiHikenors, then will Carlsberg still being going it alone?  Hard to say really.

Is Carlsberg a loser for not merging like the others?   Will they lose marketshare over time?  Or will people feel more inclined to drink a beer with a stable name they can pronounce and recognize?


I think the fallout from the big AB InBev merger has been interesting.  With Pfizer shrinking in St. Louis, lost talent broke lose and added to our biotech start-up industry.  Laid-off AB workers know brewing, and St. Louis could always use more microbreweries.

The Anheuser-Busch Foundation, which does not own AB InBev, has been very active in the past couple years.  They've been building buildings at UMSL, SLU, Fontbonne, and elsewhere.   Money has been flowing out of them at a regular rate.  I'm not sure how much their foundation and charitable giving was affected by the activities of the past 15 years, but it does feel like there has been a noticable increase in giving since the merger.

Looking towards the next hundred years, what will I be drinking?