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AB InBev: New Chairman Hails From Big Tobacco

AB InBev: New Chairman Hails From Big Tobacco

Beer giant Anheuser-Busch InBev elects former CEO of Altria as its new chairman.

Shareholders of Anheuser-Busch InBev elected the former top executive at tobacco giant Altria Group Inc. as its new board chairman. Martin J. Barrington was appointed by the annual meeting of the world’s biggest beer producer.

Barrington retired from Altria in May 2018 after 25 years with the Big Tobacco, including the last six as chairman and CEO. Altria is the parent company of Philip Morris USA, the largest cigarette manufacturer in the United States. Altria is a major stakeholder in AB InBev after its blockbuster merger with SAB Miller in 2016.

Addiction industries keep integrating

Altria’s tobacco companies are complemented by major stakes in e-vapor, alcohol and cannabis companies – a who is who of addiction industries.

  • Alcohol: The approximately 10% economic interest Altria holds in AB InBev generates profits for Big Tobacco from the $36 billion global beer profit pool.​
  • Cannabis: The 45% ownership in Cronos Group positions Big Tobacco to compete in the emerging global cannabis sector.
  • E-vapor: The 35% economic interest in JUUL Labs, Inc. provides Altria access to the leading U.S. e-vapor company and a significant international opportunity.

The Big Tobacco playbook tailor made for Big Alcohol

The appointment of the new chairman is part of a broader shake-up of the board of directors at the beer giant as it struggles with slumping sales.

Four directors have left and were replaced at the annual shareholders meeting. Among those leaving are Alexandre Behring, who is the CEO of 3G Capital and chairman of Kraft Heinz Co., and 3G investor Carlos Alberto Sicupira. 3G’s Brazilian founders helped create the beer giant through a series of mergers, and some of its investors are major AB InBev shareholders.

3G, a major private-equity firm, has struggled recently due ti troubles at Kraft Heinz and AB InBev. 3G long advocated a strategy focused on combining big brands and slashing costs, but both Kraft Heinz and AB InBev face problems to grow their revenues, according to Morning Star reporting.

Mr. Barrington was chosen for his experience as chairman and CEO of a publicly listed Big Tobacco company. His selection also provides a balance to the controlling shareholders, per Morning Star. AB InBev must amend its corporate bylaws to appoint Mr. Barrington chairman, since current rules stipulate an independent chair.

We believe that his experience as a former chairman and CEO of a listed, broadly held multinational company means that he brings strong qualifications to the role,” AB InBev said last month when Barrington was nominated to become the board chairman.

He is an expert in governance, regulatory topics and operational excellence, and left his previous role with a recognized track record for shareholder value creation.”

AB InBev says they “remain focused on delivering sustainable top and bottom line growth.”

This selection is a clear message: AB InBev’s urgent need to unleash growth and create value for shareholders now combine more than ever both personally and institutionally with Big Tobacco’s playbook to systematically undermine, obstruct and oppose public health policy making and cast doubt about the scientific evidence concerning health harmful products and business practices.

For further reading:

Corporate Consumption Complex And The Need For A New Public Health Agenda

Source Website: Richmond Times Dispatch