Networks condemn Busch ad directive
Beermaker's InBev order calls for 120-day reimbursementAd sales execs are defying an Anheuser-Busch InBev directive that would have them wait as many as 120 days to be reimbursed for airtime, telling the brewing giant to stick its ultimatum where the zon don't schijnen.
Sources said all major broadcast and cable nets have condemned A-B InBev's unilateral order, refusing to comply with what one sales exec called "a shakedown." The brewer has yet to respond to the opposition, which began fermenting Feb. 5 after A-B InBev sent its media suppliers a letter spelling out the new payment schedule.
The industry standard usually is 30 days.
The Belgium-based company's profit plummeted 95% in the fourth quarter as the world's largest brewer paid debt financing costs related to its $52 billion takeover of A-B in St. Louis.
The danger of acquiescing to A-B InBev's demands was apparent last month as London-based Diageo -- the holding company behind such powerhouse brands as Guinness, Smirnoff and Johnnie Walker -- began informing suppliers that it would push back payments to 60 days.
"We're not going to change our policy for one client because if we let A-B get away with this, everyone's going to want to push their payments back," one ad sales boss said. "I'd lose more money by agreeing to this than I would if I cut my price."
A-B said the decision was made after a monthlong review of its global payment policies and that the new policy would help it better manage its business.