Anheuser-Busch braces for strikes as end of union contract looms

Anheuser-Busch InBev (BUD), the parent company of Bud Light, is facing potential strikes from 5,000 unionized workers in March. The current contract for the Teamsters union expires on February 29th. The brewing giant said it is willing to negotiate a new deal to avert walkouts at its US-based factories, however the union signals they are adamant about the strikes.

Yahoo Finance's Brooke DiPalma, Pras Subramanian, and Allie Canal discuss the trend of labor unions turning to strikes for improved benefits.

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Editor's note: This article was written by Angel Smith

Video Transcript

BROOKE DIPALMA: We're talking Bud Light's parent company, AB InBev. It was a tough year in 2023. It's lost its top spot as America's favorite beer, following a marketing campaign that then turned into a boycott, then a reverse boycott, causing shares to move lower last summer. But now as trading began to turn the corner, it's facing a new challenge, guys, potential strikes by members of the Teamsters Union, a potential walkout in March.

So essentially, this contract does go up for renegotiation February 29, or rather expires February 29, the same day as their earnings report. And essentially, the Teamsters coming out today saying that it's bound to happen, that it's going to happen. But really, AB InBev sticking with this the story, that they're going, that they're willing to negotiate, they're willing to come to the table here. But this is just one of so many strikes we've heard of lately.

ALLIE CANAL: I know. AB InBev, man, they just can't catch a break. And the timing here, too. I mean, just ahead of the Super Bowl. AB InBev, a big ad buyer for the Super Bowl. And then, in the background--

BROOKE DIPALMA: Yeah, leaning at 2 and a half minutes, I think, between three different companies that they're putting out this year.

ALLIE CANAL: And I'm sure it's very happy-go-lucky ads. and then--

BROOKE DIPALMA: Very much so. Easy to drink. Easy to enjoy.

ALLIE CANAL: Look at that, yeah.

BROOKE DIPALMA: That's what they're trying-- yeah, their Budweiser commercial with the Clydesdale. They're trying to get them to nostalgia factor in you. And so they're really just trying to go back to the beer company--

ALLIE CANAL: To their roots.

BROOKE DIPALMA: --they were once known for.

ALLIE CANAL: But-- and Pras and I have really reported on a lot of strikes in our respective industries, the Hollywood strikes, the auto strikes. And I subscribe to the idea that there's strength in numbers here. When you see people in other industries fighting for their rights as the working class, I do think that ignites something and says maybe we should do that.

BROOKE DIPALMA: Yeah, and if they walk out, that means this summer, this spring, what does that mean for beer production?

ALLIE CANAL: Right.

PRAS SUBRAMANIAN: I mean, the Teamsters got a huge win at the UPS last year. And then you couple that with what happened to UAW and on SAG and WGA, you're seeing these unions sort of like they're winning at every level. And popular opinion is with labor versus management. So I don't see how they cannot do this, right?

They're saying that they're not come to the table, they're threatening job cuts, apparently. That's what the union is saying about AB InBev. They're not going to agree with that. They're going to say no, give us what we want, or we're going to go on strike, and you lose 5,000 workers. And the Super Bowl is coming up, and all sorts of stuff. And 99% of people-- or 99% of the Union actually voted to authorize strike last year, so.

BROOKE DIPALMA: And this comes on the same move as Constellation Brands gaining share here with Corona, that light lager beer. In addition to that, we're also watching Molson Coors also gain share. So it'll be interesting to see the way that this all plays out, as AB InBev really tries to come out back on top.

ALLIE CANAL: Yeah, it seems like the power is in the workers right now. If there's a time to strike it might be now.