Anheuser-Busch faces bad buzz from lawsuits

2013-03-03T06:30:00Z 2013-04-04T20:24:18Z Anheuser-Busch faces bad buzz from lawsuitsBy Lisa Brown 314-340-8127

“Watery,” “watered-down” and “diluted” are not the kinds of descriptions any major brewer wants attached to its beers.

But that’s exactly the scenario Anheuser-Busch found itself dealing with last week, following a spate of lawsuits that allege some of the brewer’s beers, including its flagship Budweiser, contain less alcohol than the amount listed on the labels.

The brewer immediately called the lawsuits groundless and, using social media, has pointed out news reports that showed independent tests proving the accuracy of its labels. Still, A-B has been largely silent in the days after news of the lawsuits broke.

The brewer should consider taking a more aggressive strategy in its public response, marketing experts say. Some even cited Taco Bell’s handling of a lawsuit over ground beef two years ago as a good model to follow.

“The reality is, Budweiser is a remarkable product and has greater consistency than any other beer in the world,” said Bill Finnie, an adjunct professor of strategy at Washington University’s Olin Business School and a former A-B executive. “This is an opportunity for A-B to say: These are the facts about how mainstream beers are brewed. They need to communicate their passion for the product and what that means as far as quality, for the consumer.”

On Tuesday, Bloomberg News triggered the media frenzy when it reported a lawsuit filed in Philadelphia that claimed A-B, the St. Louis-based unit of Belgian brewer Anheuser-Busch InBev, diluted Budweiser and other brands as a money-saving measure before packaging the beverage, and thus overstated the alcohol content.

That lawsuit, in conjunction with others in California, New Jersey, Texas, Ohio and Colorado, seeks damages from the brewer for allegedly deceiving consumers.

Within hours, Peter Kraemer, A-B’s vice president of brewing and supply, issued an emphatic denial, calling the allegations “completely false.”

In the days following, news about the lawsuits’ allegations reached a worldwide audience, A-B’s public relations team took to social media with Twitter messages that link to its corporate website about the company’s brewing processes.

One message from Budweiser’s Twitter account said: “Thanks to all of our #Budweiser fans for your support in the face of the groundless alcohol content lawsuits. We appreciate your loyalty.”

By Thursday, A-B also used a “promoted tweet” on Twitter with links to independent lab tests conducted on behalf of National Public Radio and St. Louis TV station KSDK (Channel 5) that showed A-B beers did indeed contain 5 percent alcohol as stated on the labels. Promoted tweets are paid messages on the otherwise-free social media platform.

However, A-B has declined to comment further on the lawsuits or its communications strategy surrounding the media attention.

While the brewer is constrained in what it can say by the pending litigation, the company needs to do more to protect the brands’ reputations, said Jim Fisher, chairman of the marketing department at St. Louis University’s John Cook School of Business and an associate professor.

Turning to social media is an important step in countering the bad publicity, and should be combined with a more aggressive stance refuting the allegations, he said.

“It’s an integrated communications challenge,” Fisher said. “What they need to do is think about how they might use advertising and communicate with their distributors about what they should say to customers about it.”

In 2011, Taco Bell countered a lawsuit challenging the quality of its meat by spending millions on a TV and print ad campaign to refute the claims. The lawsuit was dismissed within months of its filing following the campaign. Taco Bell also took out full-page ads in the Wall Street Journal and other newspapers asking for an apology from those who made the allegations. (Taco Bell now finds itself in the midst of new scandal, this time related to horse meat found in its ground beef at restaurants in the United Kingdom. The chain apologized to customers on Friday and vowed to step up its testing processes.)

Gary Ford, associate professor of public relations and communications at Webster University, said that as with the 2011 Taco Bell case, A-B’s primary concern should be protecting its beers’ reputations. “To preserve (its) reputation, a company really needs to step forward and address it sincerely and directly,” he said. “If they don’t tell their story, someone else will.”

The lawsuits have already garnered worldwide media attention, including coverage by the BBC News in the United Kingdom and newspapers in A-B InBev’s home country, Belgium.

The bad buzz comes as the brewer is seeking to revive sales of Budweiser in the U.S.

While foreign sales are growing, the brand’s U.S. sales volume has been falling since the 1980s.

Still, there’s a fine line in how much the brewer should say publicly, said Irv Schenker, clinical professor of management communication and director of the Management Communication program at New York University’s Leonard N. Stern School of Business, especially since the lawsuits don’t likely pose a threat to its finances or workflow.

“I’m sure there are talks going on at InBev about calibrating the degree to which they should respond to lawsuits that appear to just be trolling for dollars and will likely be dismissed,” Schenker said. “Social media is probably the best approach to reaching impressionable young adults of drinking age who might be most likely to hear about the allegations.”

Lisa Brown is a business reporter at the Post-Dispatch. Follow her on Twitter @LisaBrownSTL and the Business section @postdispatchbiz.

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