Net 30 is I believe standard payments terms in most industries. Meaning you pay your vendors 30 days after product is billed. You expect the same of your customers thus allowing the flow of cash to be consistent. In this market, a LOT of customers are beginning to ask for special terms, whether it be net 60 or sometimes more. For a small business who has AB as their largest client, which is very common around here I believe, it may force them to take out a line of credit to pay of their suppliers. Most people that I am dealing with are just saying this is temporary and that in a month or two that they'll go back to paying normally, but with AB-InBev, not so sure.
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ChrisInDownTown wrote:Net 30 is I believe standard payments terms in most industries.
It is also routinely ignored.
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The Central Scrutinizer wrote:ChrisInDownTown wrote:Net 30 is I believe standard payments terms in most industries.
It is also routinely ignored.
Abolsutely true. but ignored by 5-7-10 days. not 30 or 60 or certainly not another 90.
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ChrisInDownTown wrote:The Central Scrutinizer wrote:ChrisInDownTown wrote:Net 30 is I believe standard payments terms in most industries.
It is also routinely ignored.
Abolsutely true. but ignored by 5-7-10 days. not 30 or 60 or certainly not another 90.
You haven't met my clients!
The Central Scrutinizer wrote:ChrisInDownTown wrote:Net 30 is I believe standard payments terms in most industries.
It is also routinely ignored.
So why would A-B switch to Net 120? Are they already running into cash flow problems?
As a small business person (day job in manufacturing) I will say that this is probably a request to vendors, and perhaps a signal of the new regime. Using one's vendors as a bank by pushing back payments is typical, and I believe has its roots at Harvard Bus School. For a company the size of AB to pay in 30 days (net 30) is pretty unusual, 45 is more typical, but I have fought and held shipment with big companies whose default is 75 days. Our terms are 1 10/net 30 which means that a 1% discount is available if payment is received within 10 days, payment in full at 30. I have customers who take the discount and will pay in 30, or even longer if they can get away with it. The point is that the customer, if they are large, and represent a large percentage of one's business can attempt to pay however they see fit. It then becomes a negotiation in which one can hold shipment, etc, until payment is received. That works when one is offering a proprietary product (this would be called leverage), but if it is a commodity, then they can go elsewhere.
It does not necessarily mean that they are having cash flow problems, but rather that they are tightening up their finances and cash management.
120 days is excessive, and the vendor has to see if their suppliers can live with a delay in payment-just like going through a spanking machine. If they are asking for 120, perhaps they are actually willing to accept 60-75, which still gives them an additional 30-45 day float on their money.
It does not necessarily mean that they are having cash flow problems, but rather that they are tightening up their finances and cash management.
120 days is excessive, and the vendor has to see if their suppliers can live with a delay in payment-just like going through a spanking machine. If they are asking for 120, perhaps they are actually willing to accept 60-75, which still gives them an additional 30-45 day float on their money.
That is just how Brito runs the company.
It is like getting 2 extra months worth of interest free cash equal to their payables. If you can do it, why not?
It is like getting 2 extra months worth of interest free cash equal to their payables. If you can do it, why not?
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dweebe wrote:The Central Scrutinizer wrote:ChrisInDownTown wrote:Net 30 is I believe standard payments terms in most industries.
It is also routinely ignored.
So why would A-B switch to Net 120? Are they already running into cash flow problems?
No, my guess is they will take advantage the float - 90 days worth of interest.
ABI is switching to a more European system of payments. I work for a Spanish-owned company, and net 180 days are our payment terms. There is an opt out available that provides a quicker payout at a discount, but you have to sign up for these terms if you want to be a vendor.
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Has anyone noticed that ABI has been advertising under the name ABINBEV? I noticed at the Cards winter warm up, the sign read AB-INBEV as a sponser. I thought AB INC. was the North American subsidiary. Can't imagine ABI would sponsor much here. Maybe it was a typo, should have read AB INC, who knows. 
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Don't forget, they already did. To the tune of many millions of dollars on the options exercised as part of the buyout. But the City will, as it always has, bend over for Big Business.
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bonwich wrote:But the City will, as it always has, bend over for Big Business.
Sad, but true. We're too busy trying to hang on to the businesses we've got to actually attract something new to the city or the area, and sadly, even those efforts to retain existing businesses have had mixed results at best.
^ This is the whole problem with the City's current economic development philosophy. You get the feeling that the it is simply reactionary, not proactive and that is a big part of the problem.
Don't forget, they already did. To the tune of many millions of dollars on the options exercised as part of the buyout. But the City will, as it always has, bend over for Big Business.
Bend over for big business... are you joking? I wish the city would "bend over" more. how many companies have left the city for the county? How many CONTINUE to to this day? a "measly 1%".. companies ALWAYS say this is the reason for not moving into the city.
As for AB, who knows what other little tricks Inbev has up their sleeve. maybe they'll just leave the little "tourist brewery" and move everyone left to NY. sad.
The idea of ABI seeking to reduce the amount it pays in earnings tax is not unreasonable. The key is that the City should use this as an opportunity to build an important relationship between the City and the new Brazilian overlords.
In particular, the idea presented by the City should be a simple one: the more jobs you add within the City limits, the more we will reduce the earnings tax burden, with the rate of reduction increasing as the ABI reaches certain job growth milestones.
In particular, the idea presented by the City should be a simple one: the more jobs you add within the City limits, the more we will reduce the earnings tax burden, with the rate of reduction increasing as the ABI reaches certain job growth milestones.
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JCity wrote:a "measly 1%".. companies ALWAYS say this is the reason for not moving into the city.
It's considered impolite to say "we're moving from downtown STL to Clayton because our employees freak out if they're panhandled once amonth." The earnings tax issue is BS and the city of St. Louis has nearly given away everything that it can to keep/lure business downtown.
JCity wrote:Don't forget, they already did. To the tune of many millions of dollars on the options exercised as part of the buyout. But the City will, as it always has, bend over for Big Business.
Bend over for big business... are you joking? I wish the city would "bend over" more. how many companies have left the city for the county? How many CONTINUE to to this day? a "measly 1%".. companies ALWAYS say this is the reason for not moving into the city.
As for AB, who knows what other little tricks Inbev has up their sleeve. maybe they'll just leave the little "tourist brewery" and move everyone left to NY. sad.
Congratulations, you've guaranteed another 25-50 years of business decline in the city.
Yes, please -- let them bend over for A-B to the tune of millions in earnings tax, while completely ignoring the 95% of businesses (small) in the City who pay earnings tax. Let them exempt options (which less than 1/10th of 1 percent of employees in the city receive) but not exempt bonuses (which, by the way, is how law firms and accounting firms incent their partners).
Oh, yeah, don't forget big bucks to sports teams whenever they ask. But that's been a proven growth engine for downtown ever since Busch II, hasn't it?
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DOGTOWNB&R wrote:AB-INBEV profits fall 95% this quarter....
http://www.stltoday.com/stltoday/news/s ... enDocument
What's the over/under on how long before InBev pulls a Daimler-Benz and unloads A-B?
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Dweebe wrote:
I wish it would happen before they destroy the company. Unfortunately, I think they will hold on to the bitter end, even if it brings down the whole ship. My guess is that they will make it through this and pay off the debt. At that point, AB will be a shell of it's former self, especially in St. Louis.
What's the over/under on how long before InBev pulls a Daimler-Benz and unloads A-B?
I wish it would happen before they destroy the company. Unfortunately, I think they will hold on to the bitter end, even if it brings down the whole ship. My guess is that they will make it through this and pay off the debt. At that point, AB will be a shell of it's former self, especially in St. Louis.
I've noticed a change at Blues games. A couple of years ago the pretty much the only thing you could find in the Savvis/Scottrade Center was Bud/Bud Light/Bud Select. I think they would have one Miller/Coors stand on each level when certain teams visited.
Now this season they have a Guinness/Smithwicks stand, an import beer stand, a Schlafly stand and most of the portable stands carry A-B along with Miller/Coors. Maybe it's the management change: but I think peoples tastes and opions have also changed.
Now all they need is a Canadian beer stand (Molson, Moosehead, Labbatt)
[-o<
Now this season they have a Guinness/Smithwicks stand, an import beer stand, a Schlafly stand and most of the portable stands carry A-B along with Miller/Coors. Maybe it's the management change: but I think peoples tastes and opions have also changed.
Now all they need is a Canadian beer stand (Molson, Moosehead, Labbatt)
[-o<
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This includes one-time costs of the takeover as well as a decrease in consumer purchasing power. Considering that the buyout was for $70/share, and that beer is a resilient if not fully recession-proof industry, and the decline as reported is not really significant. Compare & contrast with other large breweries, even spirit firms, and you'll see like results, so long as you include the one-time charges related to the buyout.DOGTOWNB&R wrote:AB-INBEV profits fall 95% this quarter....
http://www.stltoday.com/stltoday/news/s ... enDocument
And surprise, we're in a recession and maybe two months away from a depression.
I think most of this is an initiative of management for standard product diversification, as opposed to backlash consumer sentiments. Either way, though, I'm glad for the option to be drinking quality stouts at games.dweebe wrote:I've noticed a change at Blues games. A couple of years ago the pretty much the only thing you could find in the Savvis/Scottrade Center was Bud/Bud Light/Bud Select. I think they would have one Miller/Coors stand on each level when certain teams visited.
Now this season they have a Guinness/Smithwicks stand, an import beer stand, a Schlafly stand and most of the portable stands carry A-B along with Miller/Coors. Maybe it's the management change: but I think peoples tastes and opions have also changed.
Now all they need is a Canadian beer stand (Molson, Moosehead, Labbatt)
[-o<
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dweebe wrote:DOGTOWNB&R wrote:AB-INBEV profits fall 95% this quarter....
http://www.stltoday.com/stltoday/news/s ... enDocument
What's the over/under on how long before InBev pulls a Daimler-Benz and unloads A-B?
I've been saying 5 years all along.