ST. LOUIS - Anheuser-Busch has changed. Expenses such as color printing and shipping kegs of beer via FedEx are now restricted. In St. Louis, which recently witnessed more than 1,000 layoffs at the brewery, many believe InBev's buyout was a raw deal for the city and for lovers of Budweiser.

Critics in the United States and overseas have eviscerated parent Anheuser-Busch InBev for slowing down its payments to suppliers in an effort to conserve cash. Employees say morale has shriveled.

But the company's top American executive argues that many of the changes have been made in the pursuit of accountability and good stewardship. In a wide-ranging interview at the St. Louis brewery, Dave Peacock - president of Anheuser-Busch, a division of Anheuser-Busch InBev - explained the company's recent efforts to streamline and simplify itself.

"More of what you need, and less of what you don't," said Peacock, 40.

Many of the recent changes at Anheuser-Busch - more deliberate planning of advertising campaigns, a less overbearing relationship with beer distributors - were being developed months and in some cases years before InBev swooped in, according to Peacock. But the buyout also produced new momentum for change.

"The transaction woke people up," Peacock said in an hourlong discussion in A-B's cafeteria.

After a whirlwind of activity stretching back to last summer, things are a little more settled and routine at One Busch Place. But as the dust has cleared, a different Anheuser-Busch has emerged. For one thing, it has about 4,400 St. Louis-area employees, down from approximately 6,000 a year ago.

For years, Anheuser-Busch has been the unofficial big brother of the St. Louis business community. It spread the wealth, showering area businesses - including advertising agencies both large and small -with work. Now, as a leaner - critics would say meaner - subsidiary of the world's biggest brewer, Anheuser-Busch runs the risk of smudging its feel-good image, slipping from corporate icon to just another large operation.

These are treacherous times for big U.S. brewers. All of them, including the U.S. wing of Anheuser-Busch InBev, are pushing to cut costs, said Tom Pirko, president of consulting firm Bevmark. But it's not clear that "whacking away" in an uncertain market is a good long-range strategy, he said.

"You have to be very careful," he said. "You can sacrifice the luster of your asset. You cut too deeply, and it creates problems."

A-B says its changes actually make the business more valuable. It sliced its number of products by one-fifth last year, getting rid of packaging and drinks that weren't selling fast enough. "Everything that doesn't make the list, you cut," Peacock explained.

It's all part of the governing ethos at InBev - now Anheuser-Busch InBev - said Credit Suisse analyst Carlos Laboy. Anheuser-Busch InBev is "intolerant of mediocrity and inefficiency," Laboy said. "These guys are very, very focused, and very, very sharp. There is a wealth-creation agenda for the controlling shareholders of the organization."

Trimming costs

Some scrutiny is aimed at its advertising agencies. A-B plans to do business with fewer agencies, a trimmed-down roster that better understands its needs.

Peacock said the company had been looking for several years to make its sales and marketing operations more accountable. The goal of doing business with fewer agencies is not to be "punitive," but to make sure Anheuser-Busch's spending is appropriate and generates an acceptable return, he said.

Previously, Anheuser-Busch's marketing process was a bit like herding cats. After it worked out its plans in the beginning of each year, things would often start to get muddled as the months went by. The company would spend a lot of time in the middle of the year trying to determine exactly how much its marketing would cost. The new process is "much more disciplined," said Peacock, who was A-B's vice president of marketing before being appointed president after the InBev buyout.

At the beginning of the year, Anheuser-Busch wants its brand teams to plan out their creative needs as specifically as possible. Then, the company will sit down with the chosen agencies and hammer out the fees for the year, based on benchmarks developed over years of crafting campaigns. The company wants to pay by the project - not by the hour. If a project takes more hours than expected to complete, that's the advertising agency's problem.

But this is not a case of A-B's dropping the hammer, Peacock said. The company will also curb its habit of changing orders in midstream.

"The accountability goes both ways," Peacock said.

In its relationship with beer distributors, Anheuser-Busch is unabashedly changing. It wants to refocus on selling beer, and not on nitpicking every aspect of its distributors' business.

The company recently rewrote part of its agreement with distributors of Budweiser, Bud Light, Busch and other A-B beers. The original agreement saddled distributors with irksome requirements: Inspectors from A-B would check the tire pressure on distributors' trucks and take note if there were cigarette butts in the parking lot or stains on the ceiling tiles. Trade publication Beer Marketer's Insights called some of the requirements "infamous."

Anheuser-Busch - which, of all the big U.S. brewers, was the most hands-on in its distributors' day-to-day operations - decided the old ways needed to be changed.

This year, Peacock said, "we stripped out some things that were low value and we added some things like performance standards and monthly performance reviews that we think add value."

The company says it wants to work with its independent beer distributors - the middle tier of the brewer-distributor-retailer-consumer chain - to give data and action plans that can help them sell more beer.

The goal is to be collaborative, not dictatorial, said Peacock. A-B folks should spend less time inspecting warehouses and more time trudging around the market.

That doesn't mean things will be casual. Even though A-B wholesalers might have newfound latitude, the pressure on them to hit sales targets might actually be higher now than before, industry insiders said.

Inviting distributors to a meeting in Houston last month, the company said building trust between distributors and Anheuser-Busch InBev executives was one of its key goals.

"Brito and InBev have reputations," Peacock said. "We needed to make sure (distributors) had a chance to get to know them, because it's a 'people' business. It should never be a situation where we're just jamming things down their throat. You create distrust."

Under fire

All is not warm and fuzzy. Anheuser-Busch InBev's tougher line toward suppliers has drawn fire. The U.S. division is losing some suppliers who can't adjust to the company's new policy of taking as long as 120 days to pay bills. Before the InBev takeover, Anheuser-Busch paid many of its accounts in 30 days.

The Forum of Private Business, a U.K. trade group, recently added Anheuser-Busch InBev to its "late payment hall of shame," accusing the company of taking advantage of its dominant position at the expense of its suppliers. The U.K.-based Food and Beverage Industry Suppliers Association called A-B's new approach "totally unsustainable" and "disgraceful."

Anheuser-Busch InBev said the "challenging global economic environment" was the motivation for the change. The company acknowledged that it might take time for some of its suppliers to get used to the new system, but promised to do what it could to help with the transition.

In any case, the new policy will probably weed out some smaller, weaker suppliers, said Harry Schuhmacher, editor and publisher of Beer Business Daily. "Basically, what A-B is doing is taking out another loan," he said.

Peacock concedes that the limping economy and tight credit make the change more difficult for small companies. But he argued that the new terms are not unreasonable: A-B continues to be a predictable, reliable revenue stream for its suppliers - a good customer in troubled times. In return for an assurance of demand that many buyers don't provide, A-B reserves the right to stretch out its payments, Peacock said. The company sees the trade-off as part of its "partnership" with suppliers.

"You know you're going to get paid," Peacock said. A-B "is very reliable, and our business is a fairly healthy business."