AB InBev Labor Dispute Causes Beer Shortage

World's largest brewer shut down production in Belgium in an escalation of a standoff with workers over job cuts, causing supplies of certain brands to run low.

LEUVEN, Belgium (AP) -- The world's largest brewer, Anheuser-Busch InBev SA, shut down production in its home country Wednesday, in an escalation of a standoff over job cuts with its Belgian workers which is causing beer shortages in shops.

Workers began blockading three AB InBev breweries two weeks ago to protest against cutting up to 263 jobs in Belgium as part of plan to reduce the company's European work force by 10 percent.

As the company and unions planned a third round of mediation talks, stores across Belgium said their supplies of AB InBev brands such as Stella Artois, Leffe and Beck's were running low.

At a Delhaize supermarket close to the AB InBev headquarters, assistant director Chris Sallaerts said, "Our central depot cannot deliver any more."

AB InBev spokeswoman Karen Coeck said walls of beer crates erected at the company's three main plants in Belgium since Jan. 7 have prevented the company from bringing raw materials, empty bottles and packaging goods into the plants.

"Also, the storage facilities are full of beer that cannot be shipped out," Coeck told the VRT radio network.

Unions say AB InBev's worldwide operations yield hefty profits.

Coeck said Belgium, while a country with a passion for beers, is a shrinking market -- a trend seen elsewhere, too.

Nikolaas Brems, a student lured to the protest by the promise of a free Stella Artois, supported the blockade. "I could not imagine Belgium without beer. Belgian beer is the best beer in the world."

Last November, AB InBev reported $1.55 billion net profit in the third quarter saying cost savings from the 2008 merger of St. Louis-based Anheuser-Busch and InBev ran ahead of plan.

But revenue fell 10 percent as the recession led to people drinking less beer.

Based in Leuven, Belgium, AB InBev sold 3.1 percent less beer in the three months ended Sept. 30. Revenue for the quarter was $9.76 billion, down from combined revenue from Anheuser and InBev of $10.89 billion before last November's takeover.