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Executives

David C. Sauerhoff - Vice President of Investor Relations

William J. Kimmins Jr. - Treasurer

John Kelly - Controller

W. Randolf Baker - Vice President and Chief Financial Officer

Analysts

Kaumil Gajrawala - UBS

Bill Pecoriello - Morgan Stanley

Bryan Spillane - Banc of America Securities

Robert Van Brugge - Sanford Bernstein

John O’Shea - J.P. Morgan

Chris Growe - AG Edwards

Mark Schwartzberg - Stifel Nicolaus & Company, Inc.

Ann Gurkin - Davenport & Co. Of Virginia, Inc.

Judy Hong - Goldman Sachs

Bonnie Herzog - Citigroup

Matthew Reilly – Morningstar

Leishi Faterenzani - Alliance Capital Management

Presentation

Operator

Good afternoon ladies and gentlemen. We are ready to begin Anheuser-Busch Companies' Third Quarter Investor Teleconference. Mr. Sauerhoff, you may proceed with your opening remarks.

Dave Sauerhoff

Good afternoon, I’m Dave Sauerhoff, Vice President of Investor Relations at Anheuser-Busch. We issued our third quarter earnings release earlier today, and it’s available on our corporate website. The release, of this teleconference, contain forward-looking statements, and actual results might differ materially from these projections. Additional information on factors that could affect the company’s future, operations, earnings and prospects, is included in the earnings release, and the company’s most recent form 10-K.

The company disclaims any obligation to update or revise any of the guidance provided in this teleconference. Please note, that our subsequent comments about the company’s financial results will be stated on a normalized basis, excluding the positive impact from the Texas income tax law change in the second quarter of last year, the sale last quarter of our remaining equity stake, and a Spanish theme park investment, and in this quarter, a Modelo restructuring charge, and a gain on the sale of beer distribution rights.

The earnings release posted on our website, contains a disclosure and reconciliation of all the non-GAAP financial measures we will be using in this teleconference. Also please note that comparisons of US beer, wholesaler’s sales to retailers, require no selling day adjustment for the quarter, and year-to-date.

For members of the media listening today, please direct your inquiries following the call, to Kelli Powers, in the Anheuser-Busch public relations department. Participating with me on the call today, are Bill Pinin, Anheuser-Busch’s Treasurer; John Kelly, our Controller; and today’s speaker, Vice President and Chief Financial Officer, W. Randolf Baker. Randy?

Randy Baker

Thank you Dave, and good afternoon everyone. Anheuser-Busch reported a significant acceleration in our earnings per share growth in the third quarter, up 15.9%. This profit increase is from all of our business segments. US beer industry growth continues to exceed expectations, and AB sales to retailers for both our trademarked brands, and new alliance brands, improved in the quarter.

The pricing environment was favorable during the key summer selling season, and the outlook continues to be positive. Our international beer segment profit performance was strong, with good growth from our equity partnerships, and our international operations.

We achieved substantial increases in return on capital, operating cash flow, and cash returned to shareholders, during the first nine months of the year. Because of higher operating cash flow, we are increasing our share repurchase guidance for the year.

Briefly reviewing third quarter financial results, consolidated net sales increased 7.9%, with US beer segment sales up 6.7%. Consolidated cost of sales increased 8.5%. Profits as sold per barrel for the US beer company was up 3.9%, including the impact of the new [Invad] grants. The increase for our core brands was less than expected, with good productivity in our brewery operations.

Marketing distribution and administrative expenses were up 5.3%, reflecting the substantial increase in US field sales personnel, and additional marketing for our trademark and new import brands.

Equity income increased 28.6%; consolidated net income grew 10.8%; and earnings per share were $0.95, up 15.9%.

For the first nine months of the year, consolidated net sales increased 5.7%, net income grew 7%, and earnings per share were up 9.3%.

Operating cash flow before changes in working capital increased 16%, including a significantly higher Modelo dividend payment, and a lower pension contribution.

Capital expenditures were $565 million, up 16% from the prior year. Pre-cash flow after capital expenditures grew 9%.

Return on capital improved 120 basis points. Share repurchase spendings were $1.9 billion, and we repurchased over 38 million shares. Anheuser-Busch US Beer sales to retailers were up 2.2% in the third quarter, and $0.09 of 1% year-to-date, with a 170 basis point contribution from import brands in the third quarter, and the same contribution year-to-date from the import brands, and first quarter Rolling Rock results.

As previously reported, STR’s were up 2.4% in July and August. Our increase in July was below expectations, in part due to unfavorable weather. August STR results were strong. However, our increase in September, including the Labor Day holiday, was below expectations given an easier year-over-year comparison.

The transition of supply issues associated with the imbed European brands in the first half of the year, have been resolved, and AB sales trends for these brands are now included.

Looking at sales-to-retailers results by brand families. Bud family volume declined just under 1% in the quarter, and is down low singe-digits year-to-date. Bud Light continues to perform well, with volume up low singe-digits in the third quarter, and year-to-date.

Michelob family volume declined slightly in the quarter, and is down low singe-digits year-to-date. Michelob Ultra’s performance continues to improve, with sales up low singe digits in the quarter.

The Busch and Natural brand families were up 1% in the quarter.

STR trends for our import alliance brands in the third quarter improved significantly. STR’s for our Grolsch brands, which we began importing early last year, were up more than 50% in the quarter. STR’s for our specialty brands, including Rolling Rock, Bacardi Silver, Budweiser [Chulata], and LandShark were up over 50% in the quarter.

Anheuser-Busch’s third quarter US beer shipments to wholesalers increased 2%, with import brands contributing 160 basis points of growth. Shipments for the first nine months of the year were up 1.7%, and import brands, and first quarter Rolling Rock shipments contributed 170 basis points of growth.

Wholesaler inventories at the end of the third quarter were one half day higher than last year, based on US brewer data from the Beer Institute, and import data from the Department of Commerce.

Industry sales are estimated to be up 1.8% in the third quarter, and up 1.4% year-to-date. Industry sales trends continue to be very strong, despite the difficult comparison with last year, when industry shipments grew 2.6% for the first nine months.

Anheuser-Busch’s US market share for the first nine months of the year increased one tenth of a share point, on a shipment basis. Revenue per barrel increased 3.1% in the third quarter, and was up 2.8% year-to-date.

Front line price increases contributed 160 basis points to revenue per barrel growth in the third quarter. Promotional price adjustments were even with the prior year, and portfolio index was favorable by 150 basis points.

Import brands provided 100 points of the mix benefits, and 50 points was from our new high-end specialty products, including Bacardi Silver Mojito, Budweiser [Chulata], and LandShark.

Average promotional prices were higher than the prior year with the Labor Day holiday, and we are encouraged by the outlook for the remainder of the year. Consistent with the timing pattern for our 2007 pricing actions, we plan to implement price increases on the majority of our volume early next year, and have increased prices in several states in the fourth quarter this year.

As in the past, AB’s price actions will be on a market, grand and package basis.

Our international beer segment net income increased 28% in the third quarter, and 22% year-to-date, led by Grupo Modelo.

Equity income on a normalized basis increased $45 million in the quarter, primarily due to improved Grupo Modelo earnings from higher domestic volume, and earnings from Modelo’s Crown import joint venture in the US.

Third quarter equity partner volume on AB’s reporting calendar, reflecting June through August’s results for Modelo and Tsingtao increased over 7%. Year-to-date volume increased 6%. Modelo reported their third quarter results last Thursday. Domestic volume for July through September grew 4.2%, and exports increased 3%.

Tsingtao reported their third quarter results yesterday, with volume up 11%.

International operations volume for the third quarter increased 8%, and was up over 6% year-to-date. Profits increased nearly 24% in the quarter, and were up 6% for the first nine months.

Volume for our Budweiser and Harbin operations in China increased high singe-digits in the third quarter, but profits decreased due to higher marketing and selling expenses associated with the rollout of Budweiser and Harbin premium brands to new cities. Year-to-date, China volume was up mid singe-digits, and profits were up high single-digits.

In Canada, volume increased mid single-digits in the third quarter, with continued growth for Budweiser, the leading brand in Canada, and very strong growth for Bud Light. Profits were up mid-teens. Year-to-date, volume was up high singe-digits, and profits grew low double-digits.

In the United Kingdom, volume increased low single-digits in the third quarter, but was down high single-digits year-to-date. Financial results declined in both areas due to the unfavorable revenue mix from the continued shift, from on-premise to off-premise consumption, and price competition.

Packaging segment third quarter pre-packed profits increased 30% versus last year, due to favorable can sales volume and mix, and improved operating performance across all of its businesses. Profits were up 22% in the first nine months of the year.

Busch Entertainment delivers strong third quarter results, as profits grew 11% on higher attendance and greater in-park spending. Profits were up 9% year-to-date.

I will now update our 2007 outlook for our key performance drivers. We expect revenue per barrel to increase in the 3% to 3.5% range, with the increase on our trademark brands being greater than in 2006.

Profits as sold per barrel for the full year is now expected to be up around 4%, with increases on AB’s trademark brands being significantly less than last year. Consolidated marketing distribution and administrative expense is expected to be up in the 5% to 6% range. We now expect equity income to increase by around 20%, reflecting Modelo’s lower guidance for export growth for 2007.

We continue to expect profits from our international bureau of operations to increase low singe-digits.

Profits from our entertainment segment should be up in the mid to high singe-digits. Packaging segment profits are now expected to be up low double-digits given the better than expected profits year-to-date. Packaging profits in the fourth quarter, however are expected to be down due to plant maintenance.

Our effective tax rate for 2007 should be approximately 40.5%. Capital expenditures this year should be around $900 million. We are increasing our targeted spending for share repurchase this year to $2.7 billion due to higher operating cash flow. We continue to expect full year earnings per share growth to exceed our long-term objective of 7% to 10% growth. We’re in the middle of our budgeting process for 2008 but we’ll provide some preliminary comments on our outlook at this time.

We expect the domestic beer pricing environment to be favorable next year. Our 2008 price plan is expected to deliver a greater percentage increase in revenue per barrel before mix impacts than our 2007 plan. In addition, we expect favorable mixed benefits but less than the 2007 mixed benefits as we lap the start date of our [Invad] import alliance.

We expect another year of significant cost pressures in 2008 particularly for agricultural ingredients. The profits as sold per barrel increase for our core brand should be somewhat greater than 2007. However our total profits as sold per barrel increase should be less than the 2007 increase as we lap the startup of the end [Invad] alliance.

Consolidated marketing distribution, and administrative expense should be up low to mid singe-digits in 2008, off from our high 2007 base which included the one time step up from the major expansion of our sales force.

Equity income is expected to increase but not as much as 2007 as we lap the startup of Modelo’s ground import joint venture. We will not have more specific guidance until Modelo has completed their budgeting process.

We expect double-digit profit growth for our international beer operations and high singe-digit profit growth from Busch Entertainment next year.

Packaging segment profits are likely to decline in comparison with very strong 2007 results.

Our effective tax rate for 2008 is expected to be in line with our tax rate in 2007.

Tax of spending should be around $950 million.

Our preliminary target for share purchasing is approximately $2 billion subject as always to potential acquisition opportunities.

In summary, US beer industry shipment growth has significantly exceeded our long-term model for two consecutive years. AB sales to retailers results showed improvement in the third quarter with core brands returning to growth.

Transition and supply issues with alliance brands and now behind us and we will be increasingly focused on marketing and sales execution for our trademark and alliance brands.

Although we continue to face significant commodity cost pressures we are aggressively pursuing productivity and supply chain savings opportunities. And we expect to continue to generate significant operating cash flow and cash returns to our shareholders.

That concludes my prepared remarks. I’ll now turn it back over to our operator Elsa for the question and answer session.

Question-and-Answer Session

Operator

Thank you, the floor is now open for questions. (Operator instructions).

Our first question is coming from Kaumil Gajrawala of UBS. Please go ahead.

Kaumil Gajrawala - UBS

Thanks. Hi everybody. Randy could you talk a bit about the current price gaps with the imported beers and where you think is the optimal price gap as we start to look into the beginning of next year and as the price increases are in places there. Is there a target that you’re shooting for?

Randy Baker

Kaumil, not really in terms of a price gap between our Bud family premium brands and imports. Clearly import brands have taken price increases this year greater than our Bud family and premium brands in general, which has increased the price gap a little bit. But in general, the price gap between Bud family and imports is so great that the price increases that we’re talking about really didn’t change the fundamentals that much. All that having been, said we view that the current pricing environment is favorable and we expect the pricing environment next year to be favorable.

Kaumil Gajrawala - UBS

Thanks Randy.

Operator

Thank you. Our next question is coming from Bill Takarelo of Morgan Stanley. Please go ahead.

Bill Pecoriello - Morgan Stanley

Good afternoon Randy.

Randy Baker

Hello Bill.

Bill Pecoriello - Morgan Stanley

Randy, I was trying to understand on the organic STR growth in the quarter you had mentioned that September was soft despite the easy comparisons. Some of the other beverage companies and brewers had talked about a stronger September, and favorable weather. So I’m just trying to get a feel, say, relative to Miller and Coors if whether it be the brand equities studies that you’re looking at, or differences in channel mix. You have a heavy dependence on the casual dining segment or convenience stores, or what might be explaining some of the volume weakness that you were seeing relative to those other players. Thanks.

Randy Baker

Bill, as I said in my prepared remarks, September was below expectations. That is the reason that we have a bit higher inventories in the third quarter than last year. We don’t have a good handle on why our September sales results were below our expectations.

Last year, in 2006, our STR’s had dropped off significantly in the second half of the year but then that was in comparison with 2005 which was the very strong STR’s that we had during, in essence, the coupon wars in Florida and some other states. But in any case we were below our expectations in terms of channels. Our C-stores continued growth in line in September, in line with what we had experienced in the prior two months. Where we saw a drop off was in supermarkets and super centers.

Operator

Thank you. Our next question is coming from Bryan Spillane of Bank of America, please go ahead.

Bryan Spillane - Banc of America Securities

Hi. Good afternoon Randy. Just a question on your outlook for 2008. Would your expectation be that given the increase of cost, of raw material cost, knowing that you’d be able to actually grow your domestic profit margins next year?

Randy Baker

Bryan, we have significant cross pressures from, particularly agricultural commodities and that’s being driven primarily by barley but really agricultural commodities across the board.

In the guidance that I gave you, it would net out to profit as sold per barrel, likely being a bit above par revenue per barrel. These are preliminary guidance at this time and we’re working hard to reduce our profits as sold for next year. But the direct answer as we see it right now, we would have profits as sold per barrel off slightly greater than revenue per barrel.

Operator

Thank you. Your next question is coming from Robert Van Brugge with Sanford Bernstein, go ahead.

Robert Van Brugge - Sanford Bernstein

Hi Randy.

Randy Baker

Hello Robert.

Robert Van Brugge - Sanford Bernstein

Question about your corporate expenses. It seems like it’s down quite a bit here every year. Is this mostly a timing issue or have you been taking some initiatives to reduce head counts or cut other discretionary expenses there?

Randy Baker

John, will you take the corporate expense question?

John Kelly

Robert, I assume you’re referring to the third quarter where our corporate expenses excluding the interest cost component were down about, or down, year-over-year about $13 million. The majority of that was lower employee benefit costs. Primarily in defined benefit pension plans and retiree health care which do reflect some favorable investment returns that are starting to come into our P & L over the five year averaging technique.

So we would expect that benefit to continue at least into the fourth quarter, and then depending on what investment returns are going forward, then that may or may not magnify or reduce a little bit. But it’s primarily related to that area as well as a slightly lower actual corporate expenses.

Operator

Thank you, your next call is coming from John O’Shea from J.P. Morgan. Please go ahead,

John O’Shea - J.P. Morgan

Yes, thank you. Randy, I was wondering, can you talk a little bit about, you mentioned the Modelo reduced guidance, can you talk maybe about the outlook for the import segment of the US as you guys see it? And then also, what the implications are maybe for the Mexican beer market, realizing that it’s Modelo’s results and not yours?

Randy Baker

Hi John. First of all, recognize that we report Modelo on a one-month lag. So their September results are obviously in their quarter but were not in our third quarter. In their earnings release and call they commented that they saw weaker, they had very strong domestic sales volume in the first half of the quarter, but weaker sales volume in the last part due to heavy rains in Mexico. So that is September, that was in their quarter and will be in our Q4.

They also said that export volume was up 3%, but the US market was down 0.08%. As you well know, we are not a partner in Crown, but both Modelo and [postulation] have said that the volume weakness following price increases is in line with historical patterns and both are optimistic about the future.

One other, just general comment, about the Modelo numbers is this year they are reporting basically sales to the wholesalers. Last year these were shipments and this is the time of the year when there were very strong shipments to catch up from the bottle shortages that incurred earlier in the year. Modelo also revised their guidance for exports for the remainder, for the full year, and with that we lowered our equity income guidance as noted in our prepared remarks. We have looked at recently, our market research studies, the beer poll that you know that we do monthly tracking consumers and some special studies that we’ve done.

We do not see any weaknesses showing up on either the import segment overall or Mexican beers and we don’t see anything again in research studies that would indicate that there are specific problems. We do view that clearly this year has been a very strong year for craft micro beers and probably what is happening has been with the, shall we say buzz or excitement, on craft beers that that’s taken a little of those sampling away from imports as you have all these new brands that are also getting features and displays in retail stores that maybe they hadn’t had in prior years. But we see no fundamental change in imports and believe that that import segment in the US will continue to grow as we get into the future.

Anheuser-Busch Companies (BUD) Q3 2007 Earnings Call October 24, 2007 4:00 PM ET

Operator

Your next question is coming from Chris Growe of AG Edwards.

Chris Growe - AG Edwards

Hi, good afternoon Randy.

Randy Baker

Hello Chris.

Chris Growe - AG Edwards

Hi. I just had a question for you and a bit of a follow-up. The first one was just relative to your estimates for price realization for the year, you had talked about, I think it was back in September, about a significant sum-up in the second half of the year and 3.1% was a little less than I expected. I wonder if you could address maybe perhaps what led to that being a little lower.

And then secondarily, could you give us an idea of where you expect inventories for the year to end up given you had that Q4 kind of drawn out inventory a year ago.

Randy Baker

Chris, we started the year with a revenue-per-barrel guidance of 3% to 4% and we had an unusually large guidance due to the fact that we have that distortion, if you will or the significant impact on the year over year basis from our import portfolio, from our imports. And we have reduced the top end of our guidance and this is basically reflecting now a little bit less contribution from our import portfolio, or another way to look at it, taking away the upside that we had in that forecast.

So generally what we still have good revenue-per-barrel performance expectations for the year in the 3% to 3.5% range, but a little bit, any differences are really relating to import impact as opposed to our trademark or our core brands, if you will.

In terms of inventory for the year, we are looking to come in higher than last year, but if you will recall, last year our inventories were much lower than the prior year, they were down over a day and a half, and that was because STR's accelerated in the end of December last year, and really got too low. Our inventories will be lower than where they were in 2005. So we'll bring inventories down into a target range that we believe is appropriate, a bit higher than last year because last year was too low, but lower than where we were in 2005.

Operator

Thank you, our next question is coming from Mark Schwartzberg of Stifel Nicolaus.

Mark Schwartzberg - Stifel Nicolaus & Company, Inc.

Thanks. Hi Randy.

Randy Baker

Hello Mark.

Mark Schwartzberg - Stifel Nicolaus & Company, Inc.

Real simple question; can you tell us, it's a short period; but can you tell us how your STR’s have done in the last few weeks?

Randy Baker

Mark, our STR’s thus far, and we have three weeks, so obviously a short period of time. Our core brands are up about 1%, our total brands including imports are in the 2% to 3% range, or actually in the upper part of that range. Again, with all the caveats of that's only three weeks, but it is an improvement versus the sales trends, for Q3 and also a recovery from the shortfalls that we saw in September. One other comment while we're on STR’s in Q4. Recall that we had a very strong December last year and especially at the second half of last year, so as we go into year over year comparisons when we get into December we have a very tough comparison.

Operator

Thank you. Our next question is coming from Ann Gurkin of Davenport& Co. Of Virginia, Inc.

Ann Gurkin - Davenport & Co. Of Virginia, Inc.

Good afternoon.

Randy Baker

Hello Ann.

Ann Gurkin - Davenport & Co. Of Virginia, Inc.

I wonder if you could comment on a report I read that ya’ll are giving up marketing NASCAR and sponsoring the Busch race over the next year, and a change in direction and marketing and promoting brands.

Yes, Ann. We have a lot of changes in our media mix for next year as well as a lot of changes in our creative in our advertising that you'll see evolving towards the end of the year and into next year. It was basically a decision that the cost of the NASCAR sponsorship was, we'd been the NASCAR sponsor since 1998. We basically felt that we'd gotten our value from that.

It was time to move on, and in essence utilize that money in other areas and we still remain very active with NASCAR. We have a new relationship with, obviously with the change in Dale Earnhardt Junior, we have a new relationship with Kasey Kahn and so we stayed involved, but we made just a decision in terms of our immediate planning to drop the official beer sponsorship and re-deploy the money in other areas for media mix.

Operator

Thank you. Our next question is coming from Judy Hong of Goldman Sachs.

Judy Hong - Goldman Sachs

Hi Randy.

Randy Baker

Hello Judy.

Judy Hong - Goldman Sachs

I was hoping to get your perspective on Bud Light's performance in the quarter as PR being up low single-digit rate, industry is growing 1.5% to 2%, some of your competitors’ light products seems to be growing much faster. So I'm just wondering why we're not seeing a better growth out of the Bud Light brand, and then in sort of relations to that as Miller and Coors merge, do you envision any changes to the competitive situation in the light category?

Randy Baker

Judy, our Bud Light performance, although it's been positive, has been below our expectations and we've been reporting on that as we've gone through. But it has continued to perform reasonably well, below our expectations. As I've mentioned in the prior question, we have seen acceleration in Q4 and that has been led by Bud Light. Bud Light has very good performance in the last three weeks.

As we re-work our creative, our advertising, our media plans, our marketing and sales plans, there'll be a very strong priority on Bud family and specifically on Bud Light and we are optimistic concerning the outlook for Bud Light as we move into next year.

In terms of the Miller-Coors joint venture, as you know and as we've been discussing with you, our system has been through some very significant transitions in the past 12 months, with a very substantial expansion of our portfolios with the import alliances, the energy drink Reliance, the Rolling Rock acquisition, etc. That is, although we started the year with our priority on execution after all the deals had been done, we have found that clearly these changes impacted our system of execution in focus.

We believe that the changes that we made were strategically the right thing to do to position our system for long-term growth, but it has had a short-term impact. But we believe that we're coming out of that transition and are better able to execute as we go forward. And that in part is the answer to your Bud Light question.

We would observe that based on the announcements that were made that the Miller-Coors joint venture is going to involve very substantial changes over the next one to two years, and we believe that therefore, with the changes, changes can have disruptions and that can create opportunities for the AB system. And this is coming, we believe, at a good time for AB because we have been through our changes, our transitions, and are now very much focused on execution.

After the joint venture is complete, Anheuser-Busch still has a very substantial market share lead, basically based on today's shares we are the 48% to 29%, so we'll continue to have a very strong share gain. When we focused on our initiatives on sales and marketing plans that continue to evolve being focused on productivity improvement and it's really not appropriate for me to speculate on what the plans that the Miller Coors joint venture will have for their two premium light products.

Operator

(Operator Instructions) Our next question is coming from Bonnie Herzog of Citigroup.

Bonnie Herzog - Citigroup

Hi Randy, how are you?

Randy Baker

Fine, Bonnie. How are you?

Bonnie Herzog - Citigroup

I'm fine, thank you. I was hoping you could help me with the pricing that you've discussed and I guess my question is related to the timing and magnitude of the pricing that you're expecting to take this year, relative to what you did last year in terms of trying to understand the split if you will, and then the percentage difference.

Randy Baker

Bonnie, our 2008 price plan is similar to the 2007 price plan in terms of the percent of our volume being, having pricing actions, and that's roughly two-thirds, maybe a little bit more than two-thirds of our volume.

In terms of the staging of it, a bit more of our volume is receiving price increases in Q4 of this year versus what happened in Q4 of last year. So, there are, there have been price increases in quite a few more states than last year at this time, when we had very few.

The increases are similar in magnitude to what we've had in the past, typically $0.30 to $0.45. The vast majority over 90% of the pricing actions are front-line price increases. In terms of the actions that we've taken in this Q4, we've stated, and continue to state, that the pricing environment is favorable. We have noted that our competitors have been taking price increases with similar amounts in the Q4, and again we view that the pricing environment next year should be favorable.

Operator

Thank you. Our next question is coming from Matthew Reilly of Morningstar.

Matthew Reilly - Morningstar

Good afternoon. I was hoping you could comment a bit on the performance of some of your non-beer products, specifically the non-alcoholic products I know you've been rolling out, as well as the spirits brand.

Randy Baker

Matthew, our energy drinks, our distribution alliance with Hansen’s, and our own 180 are doing extremely well with very strong growth for our Hansen’s, in essence the Monster Brand and the other brands that are growing in the 50% plus range, so just huge sales trends for them. As our wholesalers have gotten these brands and absorbed them into the system, we're seeing very, very good sales performance through our wholesalers and at the same time our own 180 brand which is much, much smaller than the Hanson brand have also shown very good growth off of a small base.

The other products that we have are much smaller in magnitude and generally are in more test environments. You know, we've added water products, and we are testing some spirits products in the Northeast. The key driver right now are the energy drinks, and they are doing extremely well.

Operator

Thank you. Our next question is coming from [Leishi Faterenzani] from Alliance Capital Management

Leishi Faterenzani - Alliance Capital Management

Yes, good evening. My question relates to consolidation and just your view of how you see the landscape changing globally and your inclination to participate, or to not participate in the changing landscape please.

Randy Baker

Clearly the global beer industry is consolidating, not only the most recent Miller-Coors joint venture announcement, but also the announcement in Europe on Heineken, Carlsberg and S&N. So this is the continuation of a trend that has been going on for some period of time.

As I commented in an earlier question, we actually view in the US that we have opportunities to focus and capitalize in the next year or two. In terms of the international beer arena, we said, as we said in our BUD investor conference in May, we are, continue to be interested in international beer deals to enhance growth and strategies and that we would be stepping up our focus in this area. But beyond that, I really don't have anything to report and clearly cannot comment on specifics, other than we are interested in international beer deals to enhance growth that would increase shareholder value.

Operator

Thank you once again. (Operator Instructions) Our next question is a follow-up coming from Ann Gurkin of Davenport.

Ann Gurkin - Davenport & Co. Of Virginia, Inc.

Thank you for the follow-up. I want to follow-on on the discussion on the spirits. I think you've expanded your tests. Are you ready to expand that further, kind of what's the next step in that learning process?

Randy Baker

Ann, we've just recently added spirits brands in the Northeast and with the Vermont brands and a test with Margaritaville, those are very new. And we are, again, doing these to learn how our system handles these products. Thus far it's going well, but we're in the early stages of this test and do not have anything in the immediate future that we would be planning as an expansion of that, we first need to get through our learning on the fit and of the products into our system.

Operator

Thank you. At this time I'd like to turn the floor back over to Randy Baker for any closing remarks.

Randy Baker

We thank you again for participating in our teleconference. As always we appreciate your questions, your continuing interest in Anheuser-Busch. Our next investor webcast will be an investor presentation that we will be making on November 29th. Thanks again for joining us today.

Operator

Thank you. That concludes today's teleconference. You may disconnect your lines at this time and have a wonderful day.

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Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Anheuser-Busch Companies Q3 2007 Earnings Call Transcript
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