Dethroning the King by Julie MacIntosh Page B

spreadsheets to start making some of the decisions he would have made based on sheer guts and gumption.
    â€œThe old man, in his day, was great. But then scientific management took off,” said Jack Purnell, one of the first six MBAs August III hired. “August III bought into that.” The notion that The Third seized intellectual control of the company at roughly 30 years of age is striking, considering Gussie’s vast experience and tenure. The Third was the right man for the task at that moment in history, just as Gussie had been when he injected Anheuser-Busch with life following Prohibition and the Great Depression.
    â€œI think it was the right thing to do at the time,” said Charlie Claggett, the former chief creative officer for one of Anheuser-Busch’s longstanding ad agencies. “His dad was from a different era; he was an affable farm boy. August is much more of an engineer. He came in when the cigarette companies were eating Anheuser’s lunch, threw out all of the good ol’ boys and brought in Wharton grads.”
    With Gussie still technically in charge, The Third and his eaters helped Anheuser-Busch crush reams of smaller competitors in the 1960s by slashing brewing costs to a level its rivals couldn’t match. That alone, though, wasn’t going to beat Miller Brewing Company, which started coming on like a freight train at the end of the decade. Tobacco giant Philip Morris bought Miller from W.R. Grace in 1969, topping a bid from PepsiCo, and the move positioned Miller as Anheuser-Busch’s most despised rival for decades to come. Milwaukee’s Joseph Schlitz Brewing Company and Colorado’s Coors Brewing Company, two other family-owned brewers, were also tough competitors. But neither had a war chest like Miller’s. With new backing from its deep-pocketed parent, Milwaukee-based Miller was threatening to crush Anheuser-Busch under its thumb.
    August III spent considerable time over the three decades in which Philip Morris owned Miller ranting that their rival was playing dirty—funneling money from its lucrative cigarette business toward Miller to make it a stronger competitor to Anheuser. Philip Morris had the right to redistribute money between divisions, and Anheuser-Busch could have employed the same strategy if it bought up a range of other businesses. But The Third loathed “cigarette money” and pretty much anyone whose hands touched it, and frequently lectured his colleagues about the dangers of smoking. Gussie was less shy than his son about drinking liquor and wine, and was known to enjoy a good smoke. When he ejected his father from the company, The Third immediately pulled the Winston cigarette dispensers out of the executive dining room at Anheuser-Busch headquarters.
    â€œYou couldn’t have a pack of cigarettes,” said former Budweiser ad man Charlie Claggett. “If they were Philip Morris brand, you’d be shot on the spot. But it was any cigarettes. He disdained the cigarette people because they weren’t brewers, and brewing was what he was all about. They were just these tacky, rich, money-grubbing cabals who wanted to come in and steal his market share.”
    After being first to market in 1973 with a mainstream light beer, Miller enjoyed years of unobstructed dominance in that segment while Gussie waffled back and forth over whether Anheuser-Busch should jump in with a light formula of its own. “The old man didn’t buy it, that ‘Lite’ was real beer—and he was still in charge in the early ’70s,” said Jack Purnell. “While the rest of us were really worried about it, including August, he wasn’t. He thought it was just a momentary flash in the pan.”
    Gussie’s age started to become a factor at the office in the early 1970s, which added to the challenges Anheuser-Busch was already facing. It was struggling to deal with the wage and price controls imposed by