Belgium: The beer industry is growing at between 1% and 2% a year, but Brock, chief executive of InBev, the world’s biggest brewer by volume, has told his executives he wants to grow InBev at 4% to 5%. To achieve this he is putting in place a bonus plan for the top 300 executives that will reward outstanding performance. A large part of that success will involve tapping into the beer markets of Russia and China. InBev has a presence in both countries but it wants to become the dominant player.

The highly fragmented German beer market, where the group is already the number two brewer with an 11% market share, is also on Brock’s radar screen.
He said InBev has between ˆ3 billion and ˆ4 billion available to fund acquisitions without damaging its investment-grade debt rating.

In addition to the costs coming out of the old Interbrew, a further ˆ240m of annual savings will come out of InBev. These will be a combination of cuts and cross-licensing deals. Some of the savings will come from brewery closures. Inbev has already announced the closure of the Strangeways brewery in Manchester — where Boddingtons is brewed — next February. It intends to brew non-cask Boddingtons at Preston, south Wales and Glasgow, and cask Boddies at the Hyde’s brewery in Moss Side. Another UK site is also being closed as well as one in Canada.

These are tough decisions, but Brock said they had to be made and more will follow. “There are obviously difficult, painful decisions to make, but that is the kind of thing we need to do. In total we have 75 breweries, which frankly is more than we need,” Brock said.

In volume terms — but not in terms of profitability — the enlarged company InBev has taken the top spot from America’s Anheuser Busch. To the millions of consumers who drink Inbev’s brands, its beers are much better known than the company. Its 200-strong brand portfolio includes its flagship Beck’s and Stella Artois, which according to Brock is taking off like wildfire in America. Other brands include Bass, Leffe and Hoegaarden as well as Ambev’s Brahma beer, which InBev wants to turn into an international brand, a feat most analysts describe as challenging.

InBev’s smaller rivals SABMiller and Scottish & Newcastle are all weighing up how to respond in an environment where size really does matter on a global scale. But they are also waiting to see how the two groups at InBev bed down.

The merger has brought together a number of powerful people, drawing the old-style Interbrew family into a marriage with new-world Latin American money. The merger was a complex and lengthy deal to negotiate and was concluded only six weeks ago.

It is easy for an outsider to be confused by the details of the ˆ10 billion share swap. AmBev has retained its own listing in Brazil and New York. Meanwhile, InBev has a separate listing on Euronext, but it is consolidating the enlarged group’s accounts and is also considering listing its American depository receipts on the New York exchange.

There are those within the industry who wonder who in the long term will become the dominant investor, but Brock is adamant that the voting rights are equal. He said: “This company will be run as one, and if we don’t do that, we will never achieve the volume or cost synergies that we said would be part of the transaction.” However, if the two sides do fall out, there is a mechanism to unwind the merger over “a series of years”. Leaving that aside, the two companies are effectively united, and Brock has set a target to not only be the biggest brewer by volume but also the most profitable.

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