AmBev
was born in 1999, the result of a merger between the
Brazilian companies Brahma and Antarctica,
manufacturers of soft drinks and beers. More than a
merger, it was a takeover by Brahma of its old
competitor, who had been experiencing problems for some
time. Simultaneously, a scandal broke out over rumors
that information on the merger had leaked out early, a
breach of confidentiality that was said to benefit three
large shareholders. The gravity of the case led to an
intervention by the Securities Commission, and following
three years of investigation the case was closed after
requiring that the shareholders involved pay the
equivalent of 115 thousand dollars and agree to publish
a corporate best practices handbook, sponsored by
AmBev.
According to the experience of the
Brazilian unions, it had been relatively easy to
negotiate with Antarctica, while negotiating with
Brahma always turned into a frustrating dialogue.
“It wasn’t that the company refused to negotiate, it
just never resolved anything and it never yielded an
inch,” Brahma workers recall. After the merger,
AmBev inherited the malignant Brahma gene
which, among other things, has an adverse effect on the
company’s labor relations policy.
AmBev
continued to grow and spread throughout Latin America,
and as it developed it closed factories and laid off
workers. Then, in the year 2004, it merged with the
Belgian company Interbrew, thus giving birth to
InBev, the world’s largest beer manufacturer. And
once again, the same three shareholders of 1999 appeared
involved in somewhat muddy maneuvers designed for their
benefit, but which resulted in approximately US$ 448
million in losses for minority shareholders. In 20
months, the Brahma gene had turned the handbook
of corporate best practices into wet paper.
The agreement between AmBev
and Interbrew to create InBev was a
difficult one, but in the end the Belgian company
retained control over the new company. In spite of that,
the Brahma gene and AmBev’s style
of layoffs, plant closures, disregard of unions, and
breaching of agreements contaminated the new company,
and it wasn’t long before these practices were felt by
the unions in Europe, including Belgium.
In May 2003, AmBev had began
operating in Peru as Compañía AmBev-Perú,
through a soft drink factory. In 2005, with the
Brazilian ambassador in attendance –mixing, as it so
likes to do, flag-waving with business- it inaugurated a
brewery plant in the industrial region of Huachipa,
with a production capacity of one million hectoliters of
beer a year, and launched the Brahma beer in the
market, having secured today an 18 percent share of the
Lima market.
In March 2006, the Peruvian
conglomerate Grupo Romero -which includes the
Banco de Crédito and investments in the food and
logistics industries, in addition to 30,000 hectares of
African oil palm crops that entailed felling the
indigenous tropical forest- acquired a 25 percent stake
in AmBev-Perú. Through a press release,
the company announced that this deal “would enable
AmBev to access the know-how of a strategic local
partner, thus strengthening operations in Peru.”
However, as we will see, when it comes to negotiating
with the union, the company will not draw on this
“know-how” provided by the local partners.
August 1st through the 31st,
2006 was the term given to sign up for the Trainee
AmBev 2007, a program
for young professionals that was launched in 1990 and
includes all the subsidiaries of AmBev. In
2005, 17 thousand Brazilians and 4 thousand young people
from other countries of Latin America signed up. In
2004, 9,500 Peruvians applied for the Program, but just
four were selected. After only 5 months of training in
Brazil, the selected applicants assume a specific role
in the company, either in Peru or in another
country.
The training in Brazil is conducted
in the already infamous AmBev University,
responsible for transmitting the Company’s philosophy,
which according to its web page focuses on “results and
meritocracy.” Let’s look at just one example of what is
taught there. Last December, the High Labor Court of
Brazil -the maximum judicial authority in labor
matters- ruled that an AmBev worker who had been
subjected to daily humiliations and abuse was to receive
70 thousand reais (approximately US$ 33,000) in damages.
The worker had joined the company in 1998 as sales
promotion assistant and communications supervisor, and
was fired in 2004. In his complaint he described how
employees would be assessed every day in two meetings
-dubbed motivational in the company’s jargon-, one in
the morning and the other in the evening. The second
meeting was used to dole out punishments to all those
who didn’t meet the targets. The punishments consisted
in forcing these workers to do push-ups, squats and
other exercises until they were exhausted. In one such
punishment the complainant was even forced to do
push-ups with his boss stepping on his back. Other
punishments consisted in photographing penalized
employees with prizes shaped like human excrements and
posting the photographs on the company bulletin board
for a month. In the defense presented to the Court,
AmBev -influenced by the Brahma gene- argued
that “the amount of the damages exceeded the limits of
rationality and proportionality,” as if the abuses that
it subjected its employees to were themselves rational
and proportional.
AmBev-Perú
has just launched -with a significant monetary
investment- its 2007 summer campaign, under the slogan
“Tú mismo eres” (“Be yourself”), through which it
promotes the new Brahma Beat beer. In the
advertisements the company highlights the beer’s higher
alcohol content (5.2 percent), breaching the
stipulations of the Code of Commercial Communications of
its parent company InBev -mandatory for all the
subsidiaries- which prohibits any reference of its
brands’ alcohol content in advertising campaigns, but as
we know there is no code strong enough to inhibit the
Brahma gene.
Meanwhile, last year on May 7,
AmBev-Perú’s workers formed the Sole Union
of Compañía Cervecera AmBev-Perú S.A.C. (SUTAMBEV)
and from the very day of its creation the company began
to harass the workers with the aim of undermining the
union. In July, pursuant to applicable legislation, the
union filed a list of demands towards reaching a
collective agreement for the 2006/2007 period. In line
with the Brahma gene, the company’s stance was to
ignore the union and its demands, leading to a 48-hour
task strike on November 14 and 15.
Finally, on January 11, 2007 the
union, the company and a representative of AmBev
Brasil met to discuss the list of demands, with a
special focus on those relating to wages. The company
offered a three-percent raise in compensations and a
bonus of 500 soles (US$ 156.64) in exchange for closing
the list of demands. The union proposed a bonus of 3,000
soles to be paid in January and June. The company made a
counteroffer of 1,000 soles, and then a final offer of a
bonus of 1,400 soles to be paid in February and October,
establishing a two-year term for the application for the
collective agreement. At this point the union delegation
walked out of the meeting. The AmBev
representative returned to Brazil and sent an
ultimatum to the union, repeating the final offer with a
warning that if this was rejected, it would be forced to
close the company. A few hours later, AmBev-Perú
managers were informing the union that if they wanted to
keep their jobs they had to act accordingly, as the
company’s budget was not enough to meet the workers’
demands and they ran the risk of closing down the plant.
The Brahma gene can, of
course, be combated and its influence on corporate
behavior altered. The unions have realized that the best
instruments for this task are unity and organization,
which is why the labor unions affiliated to IUF have
just formed the Latin American Federation of AmBev
Workers, and even though SUTAMBEV is not yet
a member of IUF, its case has been taken on by
the Federation.
