While reviewing Inside Value recommendation Anheuser-Busch's (NYSE:BUD) first-quarter results, I was reminded of Virgil Solozzo's line from The Godfather: "Let's face it, Tom, with all due respect, the Don was. slipping." It struck me how, in a different context, the same thing could be said of the King, which is, after all, slipping.

Anheuser-Busch's estimated domestic market share fell in the first quarter from 51.7% to 51.2%. Global sales volume was up 5.5%, a number that looks healthy at first glance but masks a deeper problem. First-quarter volume growth was driven entirely by the Harbin Brewery acquisition, which boosted international volume by 131%, underscoring the weakness in the company's organic operations. Factoring out the Harbin results, volume in all segments was off, for a total decline of nearly 3%.

And just as Anheuser-Busch shareholders are nursing their wounds, Northwest Airlines (NASDAQ:NWAC) comes along to rub salt in them by replacing Bud Light with Miller Lite on its flights. While Budweiser will remain the "full-calorie" selection, Miller will pick up an extra 29,000 case sales at the King's expense. Miller's successful domestic comeback, following its sale to South African Breweries by Altria (NYSE:MO), continues.

And it's not just competition amongst brewers that's hurting the King. As Stephen Simpson points out, growth in the domestic beer market has stalled, as wine and spirits poach customers from the big brewers. SABMiller is also seeing softness in domestic demand, while the newly merged Molson Coors Brewing (NYSE:TAP) saw domestic volume drop 4%.

Pricing power was the one bright spot for Anheuser-Busch in the quarter, as revenue per barrel increased by 1.6%. Strategic price increases across most lines helped offset some of the volume decline, though they weren't enough to offset rising production costs, which knocked the company's gross margin down to 37.5%, from 40.4% in the first quarter of last year. Plus, one has to question whether higher prices are hurting demand by driving customers away at the margin.

Naturally, Bud-believers (myself included) point to Berkshire Hathaway's investment in Anheuser-Busch as a vote of confidence. Keep in mind, however, that Buffett said, "I would not expect the earnings to do much for some time, but that's fine for us." Buffett's time horizon is obviously long, but with a P/E ratio near five-year lows, and dominant market share, Anheuser-Busch is starting to look attractive for long-term investors. It was a bad bet to count Don Corleone out, and it might be just as foolish to bet against the King.

The Fool's own value guru, Philip Durell, also thinks Anheuser-Busch is a promising investment opportunity. He recommended it in the April 2005 issue of Motley Fool Inside Value . To find out why, or to see which other companies have made the cut, consider a free, no-obligation trial today.

Fool contributor Chris Mallon owns shares of Anheuser-Busch and Altria. The Fool has a disclosure policy .