Where’s My Beer Money? Anheuser Busch InBev Goes to 120 Day Payment Contracts

Our recent post “Float That Money!  The Politics of Paying Contracts” turns out to be prescient.  We talked about how large corporate customers are increasingly demanding longer and longer payment terms from their vendors (even sometimes as much as 135 days), while turning around and requiring their own customers to pay up much more quickly (usually 30 days) (check out our Q&A wizard and easy to understand legal explanations in our comprehensive sales agreement, comprehensive purchase agreement, and our other key contracts).

Believe it or not, right after our discussion on payment terms, a story on this topic hit the press.  Apparently Anheuser Busch InBev is now paying its bills 120 days after receiving an invoice.  Reportedly, Belgian governmental authorities are investigating the practice to determine its legality.

Since Emerson (Anheuser Busch InBev’s main supplier for brewing appliances), has little bargaining power to resist this change, it has publicly issued an edict that it will no longer serve its huge customer’s beers at any Emerson event.

“We suggest you use Coors, Miller, Modelo (Corona, etc.) or Heineken products,” the memo apparently goes on to say.

What Anheuser Busch InBev is doing, essentially, is turning each of its purchases into a 4 month financing contract.

I wonder how they would feel if their beer distributors tried to do the same?

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