InBev cost-cutting measures set for U.S. export

By Philip Blenkinsop - Analysis

BRUSSELS (Reuters) - Economy flights, enforcement of double-sided printing and fewer staff with mobile phones.

Belgian-Brazilian brewer InBev is likely to export its belt-tightening to the United States to squeeze out up to $1.4 billion of costs if it succeeds in taking over U.S. peer Anheuser-Busch.

"Zero-based budgeting" is central to InBev's business model in which departments have to justify all spending, rather than just changes in their budgets.

Brought in from Latin America when Belgium's Interbrew merged with Brazil's AmBev to form InBev in 2004, it has been applied across the company's regions -- North America from 2005, western Europe from 2006 and eastern Europe and Asia from 2007.

Employees and union officials describe the tightest of budget controls: mobile phones taken back and returned only to employees who justified a need for one; new pens given out only in return for used ones; and an elevator at the global headquarters closed for several months.

The elevator is back in use now, although signs in the lobby read: "Why not take the stairs?"

InBev says many such measures, and notably larger water and energy conservation efforts, also serve sustainability targets and that its cost-saving push is simply one pillar of an overall strategy also focused on boosting beer volumes.

Even InBev critics acknowledge that the rules apply just as much to Chief Executive Carlos Brito as to the workers and that good performance is rewarded.