The State of the American Company in Early 1991

The business cycle which ended in late1990 began with an expansion phase in the second quarter of 1983.4 Sustained economic growth through the third quarter of 1990, thus, gave the cycle a longevity of approximately 84 months, which was the approximate duration of the KennedyJohnson expansionboom. The American economy is currently in recession. Thus far, the recession has bee mild, and most projections contend that it will remain mild and will be of relatively short duration.

In addition to the recession, however, the country's international trade deficit and its federal budget deficit continue to loom as threats to the economy. The major problem area in the United States balance of payments is the trade deficit.5 The balance of international trade for a country is "the difference between its exports and its imports."6 In a narrow definition, exports and imports are considered to be only tangible goods. A broader definition, however, also covers all intangible services.

This research examined the state of the American economy in early1991, and assessed the potential effects of economic conditions on the operations of the AnheuserBusch Companies, Inc. It was found that the American economy is in recession and that American business firms are provided with massive subsidies in the form of federal income tax rates which are insufficient to cover federal government spending. At the same time the Administrations in Washington continue to hammer the Europeans and the Japanese over the more visible subsidies provided by those governments to their industries. When Washington is confronted with its own unfair trade practices, however, the United States may well suffer grievously from a combination of higher domestic taxes, and reduced exports because of price increases dictated by those tax increases, or by trade barriers against our lowtax subsidized industries. Whatever the scenario, it is not promising for the United States toward the end of the century.

In spite of the merchandise trade deficit, the overall balance of trade remained positive, until 1983, when the services surplus was no longer able to overcome the merchandise deficit. It is apparent that the merchandise trade deficit is the major problem area, although the services surplus for the country has also trended generally downward since 1981.

In 1988, AnheuserBusch, Inc. has a market share of 40.7 percent of the total brewing industry market (including imports) in the United States. Bud Light is the third highest selling AnheuserBusch brand, behind Budweiser, and Busch.

 

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