Bitter Brew: The Rise and Fall of Anheuser-Busch and America's Kings of Beer

Dedicated to my sisters—

Mary, Ann, Kate, and Martha—

who have helped make me the man I am.

For their aid and encouragement, I would like to acknowledge the following:

• My agent for life, Alice Martell, who has been my dear friend and champion for nearly thirty years.

• My most excellent editor at HarperCollins, Hollis Heimbouch, who should start a brewery with a name like that;

• Adolphus IV, Billy, and Trudy Busch, and Lotsie Busch Webster, and Lotsie Herman Holton—members of a great American family who shared their story on the record;

• Gary Sgouros, who shared his memories of Gussie's last days at Grant's Farm;

• Former Anheuser-Busch executives Denny Long, Andy Steinhubl, and my brother-in-law Mike Brooks, who helped make a great American company what it was;

• Former Pima County deputy sheriff Ron Benson and former St. Louis Police detective Nick Fredericksen, who did their jobs;

• All the dozens of other people who contributed to this narrative but prefer to remain anonymous;

• Glenn Jamboretz, PR consultant par excellence, who helped every time I called (and sometimes when I didn't);

• Pat Crane, Nancy Cason, John Crotty, and Suzanne Otto—old St. Louis friends who did likewise;

• Michael London, John Sayles, Barbara Wall, Kevin Beggs, and all the good people at Lionsgate Television, who believed in this book even before it was finished.

• John Mettler, Deborah Rybak, Jeff Kwatinetz, Bill and Nancy Cason, and Dennis McDougal—members of my finance committee, who made it possible for me to eat regularly and sleep under a roof during the writing process.

• Father John Rechtien, Don Crinklaw, and, especially, Irv Letofsky—who set me on the road to a writing career years ago and inspire me to this day;

• Dennis McDougal, a fellow traveler on that road who deigns to talk to me every morning;

• Matthew, Colin, and Halle Knoedelseder, my three astonishing, creative children, who keep me young at heart and hopeful about the future.

D
EDICATION

A
CKNOWLEDGMENTS

B
USCH
F
AMILY
T
REE

P
ROLOGUE:
“A
UGUST
I
S
N
OT
F
EELING
W
ELL
”

        
1 “B
EER
I
S
B
ACK!
”

        
2 T
HE
A
LPHA
B
USCH

        
3 “B
EING
S
ECOND
I
SN'T
W
ORTH
S
HIT
”

        
4 “T
HE
M
AN
W
HO
S
AVED THE
C
ARDINALS
”

        
5 T
HE
M
AGICAL
B
EER
K
INGDOM

        
6 T
HE
P
RUSSIAN
L
IEUTENANT

        
7 T
HE
O
LD
M
AN
AND THE
K
ID

        
8 G
USSIE'S
L
AST
S
TAND

        
9 C
HOOSING
S
IDES

      
10 C
AMELOT'S
E
ND

      
11 “W
E
A
RE AT
W
AR
”

      
12 R
EBIRTHING
B
UD

      
13 “T
ELL
M
E
I
'M A
H
ORSE'S
A
SS
”

      
14 W
ARNING
S
IGN

      
15 “D
O
Y
OU
K
NOW
W
HO
I A
M?
”

      
16 “I P
ROBABLY
F
EEL
W
ORSE ABOUT
T
HIS
T
HAN
Y
OU
D
O
”

      
17 “H
EY
, P
AL
, Y
OU
G
OT A
Q
UARTER?
”

      
18 H
ERE
C
OMES THE
S
ON

      
19 “W
AY
, W
AY
,
W
AY
BEYOND
T
IGER
W
OODS
”

      
20 “A B
AD
A
PPLE AT THE
T
OP
”

      
21 T
HE
L
AST
W
ATCH

      
22 “T
HEY
D
IDN'T
J
UST
D
ROP
O
UT OF THE
S
KY
”

E
PILOGUE:
A
N
A
MERICAN
D
REAM

N
OTES

I
NDEX

P
HOTOGRAPHIC
I
NSERT

A
BOUT THE
A
UTHOR

C
REDITS

C
OPYRIGHT

A
BOUT THE
P
UBLISHER

F
OOTNOTES

In the grand ballroom of the Hyatt at Capitol Hill in Washington, D.C., on the afternoon of May 13, 2008, several hundred Anheuser-Busch distributors sat in rows of uncomfortable chairs, restlessly awaiting the arrival of August Busch IV, the forty-three-year-old president and CEO of Anheuser-Busch, Inc., America's premier brewery.

“The Fourth,” as he was commonly called in the industry, was twenty minutes late, and no one from the company had appeared with an explanation for the delay.

The distributors were among 1,200 beer professionals from around the world attending the eighteenth annual National Beer Wholesalers Association/Brewers Legislative Conference. This year's three-day event coincided with the seventy-fifth anniversary of the repeal of Prohibition, and Anheuser-Busch had taken the opportunity to schedule a separate meeting with its distributors, the independent operators who—by a law passed in Prohibition's wake—serve as the middlemen between the brewery and retailers.

There was much to talk about. Beer sales were on the decline globally, and the industry was weathering a period of rapid consolidation that threatened A-B's century-long dominance. In the past few years, Milwaukee's Miller Brewing had merged with London-based South African Breweries to form SABMiller; Canada's Molson had merged with Colorado-based Adolph Coors to form Molson Coors, which then merged its U.S. operations with SABMiller to form Miller Coors; and Belgium's Interbrew SA had merged with Brazil's AmBev to create InBev, which had knocked A-B out of its perennial position as the world's largest brewer. A-B was still the most profitable brewer, with its brands accounting for about 50 percent of beer sales in the United States, the world's most lucrative market. But the company's drop to No. 2 in volume, coupled with the fact that its stock price had remained flat for nearly five years, or roughly the period that August IV had been in charge of the brewing division, was fueling speculation that the aggressively acquisitive InBev was eyeing A-B as a possible takeover target. Busch had dismissed the talk of a takeover during a meeting with distributors in Chicago the week before, drawing a standing ovation when he declared, “Not on my watch.”

The Fourth was actually the sixth Busch to head the St. Louis–based brewery, a responsibility handed down from father to firstborn son since his great-great-grandfather Adolphus founded the company in the wake of the Civil War. With the exception of the Fourth's great-uncle, Adolphus III, each of his predecessors had left an indelible imprint, not just on the company but on American commerce as well. Over the course of five generations they'd taken a tiny, bankrupt brewery that made bad-tasting beer on the banks of the Mississippi River and transformed it into a colossus that pumped out more than 100 million barrels a year. They had steered the company through two world wars, Prohibition, and the Great Depression, building their signature lager, Budweiser, into the best selling beer on the planet, making Anheuser-Busch, in the words of the Fourth's father, August A. Busch III, “the world's beer company.”

Thanks to their beer, the Busch family had tasted all that America ever promised the immigrant class from which they sprang—wealth almost beyond comprehension, political power that provided access to presidents, and a lifestyle rivaling that of history's most extravagant royals. Along with that, of course, came a king-size portion of heartbreak, scandal, tragedy, and untimely death. But they had endured. Nearly all the other German immigrant brewers who'd built their businesses by hand, branded their factories with their family names—Schlitz, Miller, Pabst, Blatz, Schaefer, Coors, Lemp, Stroh, Hamm, Griesedieck—and turned America into a beer-loving nation were gone, their paternalistic empires swallowed up by foreign-based conglomerations of amalgamations with soulless names like InBev. Of the brewing giants that boomed after Prohibition and fought fierce and sometimes desperate battles for market share in the last half of the twentieth century, only Anheuser-Busch remained as a freestanding, independent company, still operated by the family that founded it.