A-B and Miller Trade Jabs

May 24, 2004

By George Anderson

There’s a battle brewing in the beer category as Anheuser-Busch and Miller Brewing trade jabs in a public advertising and public relations contest of one-upmanship each hopes
will result in greater share for its brands.

Anheuser-Busch ran an ad in last Thursday’s USA Today, apparently trying to draw on domestic consumers’ sense of patriotism by pointing out it is a U.S. company while
Miller was “South African owned.”

Miller Brewing is owned by SABMiller, which was founded two years ago in London after South African Breweries purchased a majority stake in the company from Philip Morris. That
company, now trading as Altria, continues to own a piece of Miller.

The company ran ads of its own in USA Today and elsewhere referring to itself as “American Born” and “American Brewed.”

For its part, Miller seems pleased with the attention it is attracting from its bigger rival.

Mollie Reilly, a Miller spokeswoman, told Dow Jones’ Newswire service, “It’s always good when the dominant player is responding to your actions.”

The Anheuser-Busch ad also took issue with Miller’s emphasis on the lack of carbohydrates in Miller Lite.

“We’ll let Miller Lite spend all of their time talking about carbs. At Budweiser, we’ll continue to spend all our effort making great beer.” Anheuser-Busch’s ad refers to Miller
Lite as the “Queen of Carbs.”

Marc Cohen, an analyst with Goldman Sachs, said improved performance from Miller Lite “has forced A-B into a defensive position for the first time in a long while, and it could
be several months before the payoff to A-B’s complicated marketing response can be accurately assessed.”

Moderator’s Comment: What are your thoughts on Anheuser-Busch’s tough marketing response to Miller’s recently improved
performance in the domestic beer market? Will it work, or does it have the potential to backfire?

The negative messages going back and forth between the two companies is, in a word, unseemly.
George Anderson – Moderator

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