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Supply geography leads A-B to Mexican bottles

In an exchange that may be more smoke than fire, officials of the Glass Molders, Pottery, Plastics and Allied Workers Intl. Union (GMP) have protested Anheuser-Busch's decision to purchase glass beer bottles from the Mexicali, Mexico, plant of Anchor Glass Container Corp., a unit of Consumers Packaging (Toronto, Ontario, Canada).
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FILED IN:  Sustainability  > Strategy
     

The St. Louis-based brewer's purchase contract for its Los Angeles plant which begins next year rankled the union because many California workers were idled when several glass furnaces shut down due to the costs of complying with California's environmental regulations. Coincidentally at press time the brewer remained in labor negotiations with unions representing its brewery workers. Producing at the lowest cost is "what we must do to meet our obligations to our employees our customers and our stockholders" said John Jacob executive vice president Anheuser-Busch Companies. "The only way to do that is to control our costs." The growing popularity of beer in glass bottles Jacobs points out exacerbated the problem. Since A-B doesn't make bottles and its suppliers were unable to meet the needs of its Los Angeles brewery the company had been forced to ship in bottles from plants in Oklahoma and Texas even from as far away as Florida and New York. The freight costs Jacobs said would add $10 million/yr to container costs a situation he described as "unacceptable." When the company asked its suppliers for a solution "Anchor's proposal was the only one we received" he reported. "There is no alternative. This move will keep us cost competitive and protect the jobs of our American workforce." A-B says it has repeatedly spoken with GMP Intl. President James Rankin. "Our purchasing people told him they would welcome the union's efforts to work with the glass companies to develop a cost-effective alternative [but] the union leadership has not responded."

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