At a time when parts of the world are facing food riots, Big Agriculture is dealing with a different sort of challenge: huge profits.

On Tuesday, grain-processing giant Archer-Daniels-Midland Co. said its fiscal third-quarter profits jumped 42 percent, including a sevenfold increase in net income in its unit that stores, transports and trades grains such as wheat, corn and soybeans.

Monsanto Co., maker of seeds and herbicides, Deere & Co., which builds tractors, combines and sprayers, and fertilizer maker Mosaic Co. all reported similar windfalls in their latest quarters.

The robust profits are emerging against the backdrop of a food crisis some experts say is the worst in three decades. The secretary-general of the United Nations, Ban Ki-moon, on Tuesday called for the creation of a high-level global task force to deal with the cascading impact of high grain prices and oil prices. He said that countries must do more to avert “social unrest on an unprecedented scale” and should contribute money to make up for the $755 million shortfall in funding for the World Food Program, which feeds the world’s hungry.

President Bush told reporters on Tuesday that he’s “deeply concerned about people who don’t have food abroad,” and all three presidential contenders have recently cited high food and energy prices as causes for concern. Arizona Sen. John McCain, the presumptive Republican candidate, has said he favors scrapping the 51-cent per gallon ethanol tax credit and a 54-cent per gallon tariff imposed on most imported ethanol, ideas abhorred by farmers and many politicians.

The crisis stems from a combination of heightened demand for food from fast-growing developing countries like China and India, low grain stockpiles caused by bad weather, rising fuel prices and the increasing amount of land used to grow crops for ethanol and other biofuels rather than food.

Food companies say they’re not to blame for the soaring prices and are committed to working toward a solution. They say bigger profits can be used to develop new technologies that will ultimately help farmers improve productivity. Monsanto says it’s designing improved genetically modified seeds that can squeeze even more yield from each acre of planted grain, while ADM says it’s investing in tools that can mitigate supply disruptions. “Maybe the question should be not, ‘Are you making money?’ but, ‘What are you doing with the money that you make?”‘ says Victoria Podesta, vice president of corporate communications at ADM.

Some observers think financial speculation has helped push up prices as wealthy investors in the past year have flooded the agriculture commodity markets in search of better returns.

Total index-fund investment in corn, soybeans, wheat, cattle and hogs has increased to more than $47 billion, up from about $10 billion in 2006, according to AgResource Co., a Chicago-based agriculture research firm. The Commodity Futures Trading Commission last week held a hearing in Washington to examine the role index funds and other speculators are playing in driving up grain prices.

Not all food-related companies are benefiting. Companies that work most directly with farmers are gaining the most from higher food and grain prices, while companies further along in the food chain, like meat producers Tyson Foods Inc. and Pilgrim’s Pride Corp., are smarting because they’ve had trouble passing along the increases to consumers.

Tyson, Springdale, Ark., on Monday posted a $5 million loss for its latest quarter, hurt by higher prices for grains to feed its chickens. Earlier this month, Pilgrim’s Pride, Pittsburg, Texas, said it plans to cut weekly chicken processing by 5 percent to counteract higher grain costs.

“Anybody who is early in the chain is going to benefit,” says Ann Gilpin, an analyst with Morningstar. “I don’t think this is going to last forever, but there are some significant tailwinds to cause this to persist for a couple of years.”

Flush with more revenue than they have enjoyed in years, and eager to take advantage of the highest grain prices they’ve seen in years, farmers are paying more money for seeds, fertilizer and farm gear. That has translated into huge revenue jumps and handsome profit increases for the companies that sell these products. Growing global demand for food has been a boon to companies that buy, process and transport grains.

Monsanto saw its profit in the latest quarter more than double. Rivals DuPont Co. and Syngenta AG recently raised their profit estimates. Deere posted a 55 percent rise in earnings in its latest quarter. Mosaic’s third-quarter net income jumped about 12-fold.

ADM’s major rivals are notching big profit gains, too. Closely held Cargill Inc.’s profits jumped 86 percent to $1 billion in the latest quarter. Bunge Ltd.’s earnings rose about 20-fold to $289 million. Bunge sells fertilizer in addition to processing and storing grains.

Ms. Gilpin, the Morningstar analyst, said some companies are enjoying steep profit margins on certain food ingredients in this “brave new world of commodity prices” in part because of perceived shortages globally for basic foodstuffs like soybean oil. In a telephone conversation with Bunge officials in February, Ms. Gilpin says she was told that “food companies are so panicked about supply,” Bunge can charge what it wants for soybean oil.

A Bunge spokesman says “the amount Bunge pays farmers for crops and the amount we charge when selling products to customers are related to prevailing market prices, which are set daily in futures and other markets.” He says these prices have gone up “as the world has entered a period of tighter supply and demand.”

Archer-Daniels-Midland’s grain merchandising and handling business was its star performer in the quarter ended March 31. Operating profit rose to $366 million from $46 million a year earlier. ADM’s bread-and-butter business is procuring grain from farmers and then selling it up the food chain, either by processing it into one of myriad products such as high-fructose corn syrup and ethanol, or packing it on barges and ships to be sent overseas.

Patricia Woertz, the company’s CEO, said she empathizes with consumers who are paying more for food, but she directed the blame at gasoline prices that force up food transportation costs, rather than the use of crops for biofuels, saying that the food-versus-fuel debate is “misguided.” On a conference call with analysts, Ms. Woertz responded to suggestions that U.S. policies encouraging the production of ethanol should be reconsidered. “Retreat from biofuels is wrong, it’s foolish,” she said. ADM is one of the nation’s largest ethanol producers.

ADM’s stock fell 3.9 percent Tuesday to $45.58 in 4 p.m. composite trading on the New York Stock Exchange, suggesting that investors may be worried that ethanol subsidies are under fire. “Most investors we speak to feel uneasy about allocating their capital to a business model that relies on government subsidies, however small,” Credit Suisse analyst Robert Moskow said in a note to investors.

Cargill’s chairman and CEO, Greg Page, said earlier this month that “the dimensions of change in global agriculture are striking” and that the Minneapolis company is doing “an exceptional job measuring and assessing price risk.” He said world grain stocks are at their lowest level in 35 years.

Rising food-ingredient costs have hurt some U.S. packaged-food companies. Kraft Foods Inc.’s profit dropped by 6 percent in the fourth-quarter of last year thanks to high dairy costs that hurt its cheese business. Other food companies have fared better by cutting costs, hedging their commodity purchases, passing along price increases to consumers and boosting marketing. General Mills Inc. recently raised its 2008 profit forecast and in March, the Minneapolis-based cereal maker reported fiscal third-quarter profit rose by 60 percent from the previous year’s quarter.

Consumer-products giant Unilever has been particularly hard hit by increases in the price of vegetable oils, such as palm oil, which it uses in margarine and soap. It is passing the costs on to consumers. “We have moved decisively to increase prices across many categories and markets,” Unilever Chief Financial Officer Jim Lawrence said on an earnings call with analysts in February.

In Europe, Nestle SA and Groupe Danone SA, two of the world’s largest food manufacturers, have passed on higher prices to consumers with apparently little or no impact on profits. Nestle increased its average wholesale price for all its products 5.3 percent.

Like many European companies, Nestle doesn’t release first-quarter profits. But sales rose 6 percent to 25.7 billion Swiss francs ($24.84 billion) in the quarter from the year-earlier period. Stripping out the effect of currency changes, acquisitions and divestments, sales were up 9.8 percent — a big jump for such a large company. “This performance is unprecedented,” Nestle’s head of investor relations, Roddy Child-Villiers, said on a conference call with analysts April 21.

Nestle says it will increase profit margins this year, a sign that it has been able to pass on higher costs to consumers. Nestle’s products begin at relatively cheap levels, with an average price per product around $2. Many consumers may not have noticed they are getting more expensive.

Price rises reduced the amount of milk, yogurt and other fresh dairy products sold by Danone in the first quarter, but the company says revenue still grew. The Paris-based company says it produces one-fifth of the world’s fresh dairy products. Higher feed costs have made it more expensive to keep cows, driving up wholesale milk prices.

In the U.S., consumers are being whipsawed by the weak economy as they grapple with higher fuel and food costs. With food inflation running at about 5 percent in the U.S., the highest level since 1990, some lawmakers are considering action. Sen. Charles Schumer (D., N.Y.) has scheduled a hearing in Congress on Thursday to examine how high food prices are affecting U.S. families and explore possible solutions.

Some states are growing concerned that ethanol production is pushing up food prices. Missouri lawmakers are weighing whether to roll back a law that encourages ethanol production, while Texas Gov. Rick Perry has asked for a partial waiver of a federal mandate that requires the nation’s oil companies to blend 15 billion gallons of corn-based biofuels into the nation’s gasoline supply by 2015. That’s up from around nine billion gallons today. Mr. Perry’s proposal is being cheered by Tyson and Pilgrim’s Pride.

Julie Jargon contributed to this article.

By Lauren Etter, Aaron O. Patrick, David Kesmodel

CHINO, Calif. – Steve Mendell poured millions of dollars into stainless-steel paneling and state-of-the art cleaning systems to upgrade the decades-old meatpacking plant he has run since the late 1990s. But while Mr. Mendell focused his attention on the inside of the five-acre plant, he and other top executives at Hallmark/Westland Meat Packing Co. spent little time monitoring the facility’s outdoor cattle pens, plant employees say.

Those cattle pens are where an undercover worker for the Humane Society of the United States, a private organization, secretly filmed workers last fall forcing sick or injured cows to their feet using forklifts and water hoses. Such downer cows are generally banned from the food supply because they carry higher risks of diseases, including mad-cow disease. The video helped trigger the largest recall of beef in U.S. history last month.

Mr. Mendell “ran a great ship … except for this one fatal flaw” in how he managed the cattle pens, says Cal Faello, former head of a beef-industry trade group, who has spoken with Mr. Mendell a handful of times since the crisis began.

Mr. Mendell, 55 years old, didn’t respond to requests for comment. After failing to show up when invited to appear before a congressional committee last month, he has been subpoenaed to testify Wednesday at a hearing in the U.S. House of Representatives on meat safety. It is unclear if or how he plans to answer questions.

Hallmark/Westland halted operations last month, and it is unclear whether the privately held company will reopen. The Department of Agriculture says there is very little health risk from eating the recalled meat, which totaled 143 million pounds dating to February 2006. No illnesses have been reported.

The plant began slaughtering cattle in 1960, says Donald Hallmark Sr., a 73-year-old former owner. The plant for years was a major buyer of older, spent dairy cows from the many dairy farms in the Inland Valley, about 40 miles east of Los Angeles.

Mr. Mendell established Westland Meat Co. in Commerce, Calif., near Los Angeles, in 1990, and relocated the company to Chino later that decade. The company didn’t slaughter cattle, but bought fresh beef from companies such as Hallmark Meat Packing Co. and churned it into ground beef and other products.

In 1993, Mr. Mendell’s company and other meat suppliers came under scrutiny when four children died and 600 other people were sickened by burgers sold by fast-food chain Jack in the Box Inc. Although the exact source of the E. coli bacteria found in the beef was never determined, Westland was among companies that settled legal claims totaling $58.5 million.

Hallmark drew its own scrutiny in the 1990s. The Inland Valley Humane Society in neighboring Pomona found recurring problems with the plant’s handling of downer cows, which can’t walk or stand on their own, said Brian Sampson, the society’s supervisor of animal services.

Mr. Mendell acquired full control of Mr. Hallmark’s company in 2003, Mr. Hallmark says. One reason was that Westland wanted to become a supplier of fresh beef to the national school-lunch program run by the USDA, and needed a slaughterhouse, says Anthony Magidow, general manager of Hallmark/Westland.

The Hallmark plant had struggled financially for years, Mr. Hallmark says, but when Mr. Mendell took over, he invested heavily in the facility. To qualify for the school-lunch program, the plant had to meet many requirements, including having its financial statements reviewed and submitting a technical explanation about how it controlled germs.

The plant began supplying beef to the school-lunch program in 2003 and quickly became one of its largest suppliers. The USDA named the company its Supplier of the Year for the lunch program for the 2004-05 school year, based on criteria including timely delivery of products and high levels of customer service.

Hallmark/Westland supplied about 27 million pounds of beef for revenue of $39 million to food-nutrition programs, including the school-lunch program, in the year ended Sept. 30, 2007.

Hallmark/Westland also sold beef to companies such as Jack in the Box and the hamburger chain In-N-Out Burger. The company’s sales reached about $100 million annually in recent years and was profitable, Mr. Magidow says.

With Mr. Mendell running Hallmark/Westland, the local Humane Society received far fewer complaints about animal treatment than it did under the previous ownership, says William Harford, the group’s executive director.

Still, in December 2005, the USDA cited the company for noncompliance for being overly aggressive in using electric prods to move cattle, among other violations. The company responded by retraining cattle-pen staff, it said in a statement to the USDA. It also said it would continue to train workers “on the importance of humane handling …and will continue to monitor the corrals.”

But this past October, when the undercover Humane Society worker took a job in the cattle pens, he received no formal training, according to statements he gave to the Chino police. On his first day, he reported to Pablo Salas, a manager who told the new employee not to be cruel to the animals or to use electrical cattle prods.

The undercover worker, who wore a hidden videocamera underneath his shirt during the six weeks he worked at the Hallmark/Westland plant, told Chino police that the plant’s owners rarely came outside to observe activities in the cattle pens. Another worker told police that Mr. Salas only came outside to the cattle pens for 15 to 20 minutes a day. Mr. Salas couldn’t be reached for comment.

The Humane Society worker filmed Daniel Ugarte Navarro, the pen manager, and other workers forcing downer cows to their feet using high-pressure water hoses, forklifts and electrical cattle prods. The video led to the arrest of two workers, including Mr. Navarro, who could face more than five years in prison.

Mr. Navarro couldn’t be reached for comment. In a statement he gave to Chino police before he was arrested, Mr. Navarro said he felt pressure to ensure that 500 cows were slaughtered each day. If he didn’t meet that quota, he said, Mr. Salas would get angry. The company suspended Mr. Salas after the video emerged.

The recall also has pointed a spotlight at the Department of Agriculture, which assigns full-time government inspectors to monitor safety at meat-packing plants. Lawmakers and consumer groups have criticized the department for failing to catch problems at the slaughterhouse. The USDA has suspended three employees pending the outcome of an agency investigation. One of them was the plant’s supervising veterinarian, Gabriel Gurango, who worked on site for 20 years.

Dr. Gurango “did not spend a great deal of time” in the cattle pens because he was responsible for so many other duties, many of them inside the plant, says William G. Hughes, general counsel for the National Association of Federal Veterinarians, who is advising Dr. Gurango. Mr. Hughes contends the USDA didn’t have enough inspectors on hand to monitor food safety at the plant. A USDA spokeswoman says the plant was “fully staffed” with five inspectors.

Dr. Gurango, a 68-year-old USDA veterinarian who oversaw four inspectors at the plant, was in the cattle pens twice daily, at 6:30 a.m. and 12:30 p.m., the undercover Humane Society worker told police. When a government inspector was present, Mr. Navarro would tone down his methods for trying to get cows to stand up, the Humane Society worker told police.

Dr. Gurango didn’t respond to a request for comment. But Mr. Hughes, the attorney for the veterinarians’ trade group, said in an interview that the veterinarian was appalled by the video and was unaware of the activities.

Dr. Gurango made at least three surprise visits daily to the cattle pens to observe animal-handling practices, Mr. Hughes says, adding that Dr. Gurango had to spend a significant amount of time inside the plant each day determining whether meat from the older cows was fit for human consumption.

More distributors are giving up exclusive deals to sell Anheuser Busch beers, to take advantage of the growing craft beer market.

A decade ago, Anheuser-Busch Cos. began dangling financial incentives to get beer distributors to jettison rival brands. The campaign, known as “100 percent Share of Mind,” was a big hit, helping the King of Beers tighten its grip on the U.S. market.

But now, some distributors are finding that selling only Anheuser products might not be smart in the fast-changing alcohol-beverage industry.

In the past year, distributors in Texas, Tennessee and elsewhere have decided to eschew Anheuser’s incentives and begin selling rival beers such as Yuengling Lager, as well as wine and spirits. Recently, R.H. Barringer Co. became the first Anheuser distributor in North Carolina to start selling other brands, acquiring a rival that sells wine and imported beer. Today, about 60 percent of Anheuser’s sales flow through distributors carrying only its brands, down from about 70 percent at its peak.

The shift might help competing alcohol brands gain market share, as distributors divert some of their attention from Anheuser, which accounts for about 48 percent of U.S. beer sales. For consumers, it means greater choice at their local bars and liquor stores. Wall Street analysts say the movement signals a weakening of the St. Louis brewer’s clout in the marketplace, as small-batch “craft” beers and imports, as well as wine and spirits, wrest market share from mass-market brews like Budweiser.

Anheuser’s exclusive distribution system “was a great business model,” but “the consumer environment has changed dramatically,” says Bump Williams, general manager of the beer, wine and spirits practice of market-research firm Information Resources Inc.

In recent years, some of Anheuser’s 560 independent distributors became frustrated as craft brands such as New Belgium Brewing Co.’s Fat Tire Amber Ale surged in popularity and competing distributors snatched them up. Often, the distributors adding such high-margin brews were the same ones that peddled the beers of Anheuser’s top rivals, SABMiller PLC’s Miller Brewing and Molson Coors Brewing Co.

Anheuser wholesalers “are realizing that we have made the competition stronger by basically forfeiting these brands to them,” says Chris Monroe, vice president of D. Canale Beverages Inc., a Memphis, Tenn., distributor that carried only Anheuser products until last fall.

As profit growth eroded, Anheuser distributors began clamoring for the company to acquire brands with higher profit margins and growth rates. The beer titan has responded over the past two years. It reached a deal to import European beers such as Stella Artois and Beck’s from Belgium’s InBev SA. And it has expanded agreements to distribute other companies’ craft brews, spirits, water and other beverages.

Some distributors began hawking rival products several years ago. Others haven’t been able to distribute the InBev products and other new brands from Anheuser because of franchise laws governing beer sales. The laws, which exist in many states, block a distributor from taking over a brand unless the existing distributor agrees to sell it. Ironically, Anheuser distributors often backed the adoption of such laws.

When distributors forgo the incentives Anheuser offers exclusive partners, they are making a bet that they will make up the difference with revenue from the new brands. The incentives include cash payments of two cents a case, access to credit and truck-painting allowances.

Last fall, 11 distributors in Tennessee stopped being exclusive, in part because the state’s franchise law kept them from obtaining the InBev lineup. They all began selling brews made by Pennsylvania’ s D.G. Yuengling & Son Inc., one of the nation’s oldest beer makers, which was entering the Tennessee market.

“We saw a brand with some very strong potential, and we didn’t want that brand to fall into competitive hands in the state,” says Mr. Monroe of D. Canale in Memphis.

The move may be hurting Anheuser. Yuengling established 3.2 percent market share in terms of volume in food stores in Tennessee in the 13 weeks ended Dec. 30, says Information Resources. In the same period, three of Anheuser’s four-top selling brands in the state – Budweiser, Busch and Natural Light – experienced sales declines. Budweiser volume fell 5.4 percent.

“There appears to be some correlation between Yuengling’s entry into Tennessee and the softness in some Anheuser brands,” says Mr. Williams of Information Resources. He says it is common for Yuengling to grab share from Anheuser when it enters new markets.

Dave Peacock, Anheuser’s vice president of marketing, says Yuengling is having a minimal, if any, effect on its Tennessee sales, noting that other brewers experienced similar declines late last year.

Still, Anheuser wasn’t happy with the way it learned of the Tennessee distributors’ decision. “We found out later (in their decision-making process) than we would have liked,” says Mr. Peacock. “When we don’t get early communication, it rubs us wrong.”

Anheuser continues to champion the exclusivity program, believing it gives distributors the best chance to succeed. “We want their efforts and focus aligned with ours,” says August Busch IV, Anheuser’s chief executive. The company is open to talking to its distributors about beer brands it could acquire that would help strengthen their businesses, he says.

Mr. Busch’s father, August Busch III, ran the company when it began the exclusivity program in 1997. The campaign angered Anheuser’s foes, especially craft-beer makers that lost access to some markets. The Justice Department investigated the brewer for possible violations of antitrust law, but eventually dropped the probe. At the time, Anheuser controlled about 45 percent of the beer market, and about 41 percent of its distributors carried only its brands. As more distributors went exclusive, Anheuser’s market share rose to 50 percent, a significant feat.

So far, the biggest Anheuser distributor to end exclusivity is Ben E. Keith Co., of Fort Worth, Texas. The distributor, one of the nation’s largest, sold only Anheuser beers for about 75 years until last spring. It began selling brews like Trumer Pils, as well as wine and energy drinks that also aren’t affiliated with Anheuser. The decision came “after much debate and with the utmost respect” for Anheuser, says Kevin Bartholomew, who runs the company’s beer division.

Bartholomew is among those who believe such a shift ultimately will benefit Anheuser, because individual distributors will have enhanced their long-term business prospects.

Some industry observers are surprised a greater number of distributors haven’t flown the coop. “It really hasn’t been a widespread national jailbreak,” says Harry Schuhmacher, editor of Beer Business Daily, an industry publication. “It will be interesting to see if August continues to hold the party line.”

Some analysts say “jailbreak” may not be far off.

Jim LaRose, a Cleveland-area distributor, says he is among those taking a hard look about whether to remain exclusive. He says his sales growth has flattened. “I have to have an outlook toward what it’s going to take for me to compete in all tiers of the industry,” he says.

Miller Brewing Co., known for its conventional slate of American beers, is hoping a brew with a Mexican twist can help pull it out of a sales slump.

The Milwaukee brewer is launching Miller Chill, a 110-calorie beer flavored with lime and salt, throughout the U.S. this summer after a successful test run in Arizona and several other states. Chill is Miller’s answer to the michelada, a drink popular at Mexican beach resorts usually consisting of beer, lime juice and ice in a salt-rimmed glass.

Miller, since 2002 the North American arm of London-based SABMiller PLC, plans to spend more than $30 million this year on television and print advertising for Chill. TV ads in local markets included the slogan, “Se habla Chill?” (“Do you speak Chill?”). Miller is counting on Chill to help it reverse a sales decline in North America and regain market share in the face of brutal competition.

In the U.S., beer giants Miller, Anheuser-Busch Cos. and Molson Coors Brewing Co. are struggling to increase sales of their flagship domestic beers, as beer drinkers increasingly reach for imports and small-batch “craft” brews.

Miller hopes Chill, which it calls a premium light lager, will appeal to light-beer drinkers seeking more flavor. Miller is targeting 21- to 35-year-olds for the new brand, says Randy Ransom, Miller’s chief marketing officer.

Miller isn’t positioning Chill as an alternative to Grupo Modelo SA’s Corona, the popular Mexican import often served with a wedge of lime, Ransom says, stressing that the two beers taste very different.

Michelada ingredients can vary; they sometimes include Worcestershire and hot sauce with a pinch of black pepper. Miller tested more than 20 recipes of Chill. It declines to discuss how the beer is made, citing competitors. The brewer began test- marketing Chill in March in Arizona, as well as California, New Mexico and Florida. The beer did so well that Miller decided after four weeks to launch it nationally – an unusually short trial period in the beer industry.

Anheuser, known for testing new brands, since March has been trying out a beer called Chelada – a combination of Bud or Bud Light with Cadbury Schweppes PLC’s Clamato tomato-juice cocktail – in California and Texas. Keith Levy, Anheuser’s vice president of sales and retail marketing, says the response has been “overwhelming,” particularly in the Latino market. But the company doesn’t have plans for a national launch of Chelada, sold in tall 24-ounce cans.

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At Rosie McCann’s Irish Pub & Restaurant, an upscale tavern in San Jose, Calif., patrons frequently request Stella Artois, a Belgian lager whose origins go back to the 14th century. But for nearly all of last month the Stella tap was dry. “People were frustrated,” says bartender Fee Bakhtiar. “We’d say, ‘Oops, we’re out. There’s a nationwide shortage.’ It was embarrassing.”

At the start of prime beer-selling season, bars and retailers are facing low inventories of Stella, one of the nation’s fastest-growing imports, as well as Bass, Beck’s and other European beers made by InBev SA, the world’s largest brewer, based in Leuven, Belgium. The reason: Anheuser-Busch Cos. has run into distribution problems since becoming the exclusive U.S. importer of 19 of InBev’s European brands in February.

At the root of the supply problem are the complicated rules of the U.S. beer business. Under a U.S. law dating to the end of Prohibition in the 1930s, brewers generally must sell their beers through wholesalers, who distribute to bars, restaurants and retailers. Anheuser — a giant that had 2006 net sales after excise taxes of $15.7 billion and nearly half of the U.S. beer market — is known for its vast network of distributors, many working exclusively for Anheuser. This was attractive to InBev, which previously imported its European beers into the U.S. under a unit called InBev USA. Anheuser-Busch and InBev haven’t revealed financial terms of their relationship.

Although Anheuser acquired the right to import InBev beers, which companies would distribute them in the U.S. remained to be nailed down. Previously, few of Anheuser’s wholesalers handled beers made by InBev. Now, in many states, distributors who work for Anheuser have a legal right to take on distribution of InBev beers — but that typically means paying the previous distributor for the contract.

These transitions have played a part in disrupting deliveries of InBev beers. Some wholesalers preparing to sell their contracts curtailed orders for InBev beers, while new distributors had to wait to place orders, InBev Chief Executive Carlos Brito told analysts last month. There’s “also lead time involved in shipping product across the ocean,” he added. An InBev spokeswoman said Thursday that the company is “resolving this short-term issue to ensure we can meet the very high consumer demand,” and expects “conditions to improve.”

Anheuser and InBev are working closely “to accelerate deliveries” to the U.S., “and have taken multiple steps to relieve the delays as quickly as possible,” Dave Peacock, Anheuser’s vice president of business operations, said Thursday.

In a number of cases, Anheuser has filed lawsuits against distributors reluctant to give up the highly profitable class of beers. Several cases are still pending. However, more than 60 percent of the InBev beer imported to the U.S. is now distributed by wholesalers who also handle other Anheuser products — better than the brewer expected at this point, Mr. Peacock said. However, much of the remaining InBev beer is distributed by wholesalers that also handle beers from Miller Brewing Co. and Molson Coors Brewing Co. — fierce rivals of Anheuser.

The InBev deal is key for St. Louis-based Anheuser because the company’s domestic-beer business is growing slowly, and imports are hot. In a time of increased wealth and brand awareness, many American beer drinkers are showing a willingness to pay more for flavor or the cachet of a foreign brand. Led by Corona Extra and Heineken, imports accounted for 13.9 percent of the U.S. beer market last year, up from 11.7 percent in 2004, according to Adams Beverage Group, a market-research and publishing firm in Norwalk, Conn.

While many European beer drinkers consider Stella Artois a standard brew, its popularity in the U.S. is rising, especially on the East and West coasts. The brand — typically selling for $2 to $3 more than domestic six-packs in stores and about $1 more per draft pour in bars — jumped to 1.7 percent in the highly fragmented U.S. imports market last year, up from 0.3 percent in 2002, according to Beer Marketer’s Insights newsletter.

The shortages of Stella and other InBev brands are frustrating Anheuser’s distributors, though on the whole they are happy to see the company make an imports deal with InBev as domestic beers, including Anheuser’s Budweiser, have lost market share. (InBev’s Labatt Blue, made in Canada and the company’s best seller in the U.S., isn’t included in the Anheuser agreement.)

“There’s nothing worse than an empty tap handle,” says Fred Dana, owner of Dana Distributing Inc., a Goshen, N.Y., wholesaler for Anheuser products. “If the shortages continue, we’re going to lose accounts.”

Mr. Dana, who distributes beer in three New York counties, says he has been having a hard time getting his hands on Stella and other InBev beers since March, when he bought the wholesale contract from a rival for a price in the millions of dollars. He’s angry because he paid a premium, based on the high rates of growth of Stella and certain other beers. “Now we don’t have the product to recoup our investment,” he says.

Donnie Kruse, co-owner of BB’s, a brasserie-style Chicago bar known for serving InBev beers Stella, Hoegaarden and Leffe, on Wednesday learned that his distributor is out of Stella, his top seller. Mr. Kruse worries his five remaining kegs of Stella will run out by the end of the weekend and that he might have to offer it in bottles.

“I only like Stella on draft,” says Kelly Arst, a 33-year-old advertising executive who stopped by BB’s for a Stella the same night. If it’s unavailable, she says, she prefers another brand on draft to a bottle.

Another Chicago bar, the Pepper Canister, has experienced routine shortages of InBev’s Hoegaarden, a Belgian wheat beer. Because of that, last month the bar switched to Blue Moon, a Molson-Coors brand. “We couldn’t afford to be out of one of our draft beers; we only have eight taps,” explains bartender Rebecca Martin. “We’re coming into summertime and we needed a weissbier on tap.”

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By Julie Jargon, David Kesmodel