Brewer sale won’t hurt, rice growers in state told
Posted on Friday, July 4, 2008
JONESBORO — Arkansas rice producers who sell their crops to a local Anheuser-Busch Co. mill for use in producing beer won’t suffer financially if the St. Louisbased company is sold overseas, agricultural economists said Thursday.
Even so, U. S. Rep. Marion Berry, D-Ark., who toured the beer producer’s Jonesboro rice mill Thursday afternoon, said he is concerned about the future for the state’s rice growers.
“I never imagined I’d see the day that anyone would think they could buy Anheus- er-Busch,” Berry said. “This company is an icon of American society.” Earlier this week, Anheuser-Busch Co. rejected a $ 46 billion purchase offer from InBev, a Belgium brewing company. In-Bev administrators indicated this week they would not negotiate, spurring talk that the Belgium brewer may make a hostile takeover bid.
That talk has some farmers concerned that such a sale would mean they no longer need Arkansas-grown rice for beer products. Seventy percent of all rice used by Anheuser-Busch Co. in producing its beer is grown within a 90-mile radius of Jonesboro, said John Hegger, plant manager of Busch Agricultural Resources Inc., a rice mill north of Jonesboro that ships rice to the St. Louis company.
“It would have a devastating effect on rice growers,” said Chuck Wilson, the director of the Arkansas field services division for USA Rice Federation, an Austin, Texas-based national advocate for the rice industry.
“There’s no comparison. Arkansas is the biggest rice producer in the country and northeast Arkansas has a massive amount of rice land,” Wilson of Stuttgart said.
Eric Wailes, a rice economist for the University of Arkansas at Fayetteville, said that if Anheuser-Busch Co. is sold to InBev, he believes the new company will still use Arkansas rice.
“There’s so much brand equity in Busch products,” Wailes said. “They won’t screw around with the recipe if it sells.” Berry said he visited the Craighead County rice-milling company Thursday afternoon to show support for its workers and to thank them for creating economic opportunity for farmers in the state’s 1 st Congressional District, which produces more rice than anywhere else in the country.
The plant employs 47 people.
“We stand ready to do what we can do,” Berry said.
He said there was nothing legislatively he could do to prevent a sale, though.
Last week, InBev filed a lawsuit to remove the 13 members of Anheuser-Busch’s board in an attempt to persuade stockholders to accept its bid, even if management opposes it.
“We don’t know much about the proposal,” Hegger said Thursday. “Our main focus is to continue the quality of our production.” The mill ships 900, 000 pounds of rice yearly to the St. Louis brewery, he said.
It’s that quality, said Carl Frein, a rice broker for Farmers’ Marketing Service in Brinkley, that will keep Arkansas rice producers in business despite any sale.
“They’ll still need quality rice to produce the beer as it is now,” Frein said. “I can’t see any new company making changes. They’ll continue buying the same rice. We’ve got what they need right in our backyard.” Hegger said Thursday there’s no deadline for any impending sale, and he’s not heard any more news of a sale since Anheuser-Busch rejected InBev’s first sale offer.
“We need to follow this,” Wilson said. “Anheuser-Busch has such an impact on Arkansas rice. They’re one of the big boys.”
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