MICROBREW BEER STILL FLOODING SUPERMARKET SHELVES

RICHARD TURCSIK

ST. LOUIS -- Although the Justice Department has alleged that Anheuser-Busch Cos. here has caused its distributors to drop smaller brands and microbrews in favor of its products, retailers SN contacted said they have not had any problems sourcing microbrews to stock their shelves.

"Most of our growth is coming from the microbrews; the microbrews are still strong and still showing growth," said Bob Jennings, buyer for the beverage department at Raley's Supermarkets, West Sacramento, Calif.

Tom Roesner, buyer of beer/wine/liquor at Seaway Food Town, Maumee, Ohio, said that while he hasn't had trouble obtaining microbrew beers, microbrew sales growth has begun to slow down in his Midwestern market.

"Sales are going to level off and probably dip down next year. Premium sales have increased and imports have seen some increase. I think that is at the expense of some of the specialty business," he said.

"You are going to see quite a few of the microbrew specialty beers go by the wayside in 1998," he added, noting that Seaway eliminates slow-selling items.

Justice Department investigators are concerned that Anheuser-Busch's "100% Share of Mind" program has caused A-B distributors to drop smaller brands, and have launched an investigation of the nation's largest brewer's sales practices, according to a published report. Justice Department officials could not be reached for comment.

But Royce J. Estes, vice president of corporate law at Anheuser-Busch, said participation in the wholesaler incentive program is strictly voluntary.

"We have been notified that the Justice Department has begun a civil investigation into the distribution and sale of beer, including our company's policies and practices in marketing and distribution," he said.

"Our wholesaler incentive programs are legitimate and legal business practices," he said. "We are confident that all our practices are entirely legal, and we will cooperate fully with the investigation."

One Pacific Northwest retailer, who did not want to be identified, said, "A lot of A-B distributors in the Northwest have given up on selling other brands."

The retailer said many distributors in the Pacific Northwest have closed in recent years, limiting the options of the smaller players.

"In several markets we are down to only two distributors, from three or four in some instances," he said.

The buyer added that while microbrew sales have been slowing down to about a 20% annual growth from 60% a few years ago, they are still a major factor, accounting for up to 40% of the volume in some of his stores.

A buyer for one leading St. Louis area chain, who did not want to be identified, said he hasn't heard any complaints about Anheuser-Busch from any of his distributors.

"I don't think Anheuser-Busch is really trying to squeeze out anybody. It's paying attention to its beer and keeping control of the dates and the costs. It gives them one thing to think about instead of 10 or 15 different lines. It is a concentrated effort to make sure that they stay the best," he said.