Archives for February 2013
Wednesday’s ad is for Ballantine, from 1957. Showing a dinner party, or really a soup party, paired with buckets of Ballantine Ale. In a rarity for beer advertising, they’re touting the hops used to brew the beer, a British hop known as “Brewer’s Gold.” According to HopUnion’s hop varieties booklet, Brewer’s Gold was developed in Great Britain as primarily a bittering hop by a Professor Salmon in 1934. Ballantine refers to it as a “rare, choice hop.” And hop about this great tagline at the end? “Enjoy the genuine — it’s the trend, friend!”
Tuesday’s ad is another one for Schlitz, from 1956. Showing another backyard barbecue, or “cookout,” it’s another group of well-dressed hipsters, enjoying some brewskis with grilled meat. The barbecue man is even wearing a chef’s hat and white apron. And according to the ad, Schlitz is not only the “World’s Largest-Selling Beer” but is also as “refreshing as all outdoors!”
Just when you think things can’t get any stranger, beer drinkers in three states — California, Pennsylvania and New Jersey — have filed a class action suit against Anheuser-Busch InBev. The L.A. Times is reporting in Beer drinkers accuse Anheuser-Busch of watering down brews, that the lawsuit alleges the following:
Ten Anheuser-Busch products were named in the lawsuits: Budweiser, Michelob, Michelob Ultra, Bud Ice, Bud Light Platinum, Hurricane High Gravity Lager, King Cobra, Busch Ice, Natural Ice and Bud Light Lime.
Former employees at the company’s 13 breweries — including some in high-level positions — are cooperating with the plaintiffs, said San Rafael, Calif., lawyer Josh Boxer, the lead attorney in the case.
“Our information comes from former employees at Anheuser-Busch, who have informed us that as a matter of corporate practice, all of their products [mentioned in the lawsuit] are watered down,” Boxer said, according to the Associated Press. “It’s a simple cost-saving measure, and it’s very significant.”
The excess water is added just before bottling and cuts the stated alcohol content by 3% to 8%, he said.
ABI, naturally, is calling the lawsuit “groundless,” but it will be interesting to see how it all plays out.
Cartoon by Tony Husband.
UPDATE: NBC News is also now reporting this story, in Budweiser waters down its beer, lawsuit alleges. Apparently, Bloomberg broke the story earlier today, and also the AP, the BBC and Business Day have all weighed in.
UPDATE 2: I’ve seen a lot of commentary on this story in the interwebs suggesting that since there appears to be no test results from the Plaintiffs in this case that perhaps they are simply confusing high-gravity brewing with actively lowering the final alcohol percentage, which is a reasonable assumption. But there may be another possibility. Thanks to Stan at Appellation Beer for pointing out a post from last October by Gary Spedding at his Alcohol Beverage Testing News. I’ve known Gary for a number of years. He runs a lab in Kentucky called Brewing and Distilling Analytical Services, LLC and also most years presents an orientation exercise for GABF judges the day before we start each year. It’s sort of a continuing education component of the judging experience. His presentations are always interesting and informative and, needless to say, Spedding’s expertise is unassailable.
Last October, he posted Gaining its airs and losing its graces — a Tale of Two Buds, which he wrote in response to a popular article last fall from Bloomberg Business Week entitled The Plot to Destroy America’s Beer. In addressing the suggestion in the article that Budweiser beer had changed after InBev took control of Anheuser-Busch, noted the following experiences he’d had with the beer in recent months.
Bud has been our control beer in our laboratory … for calibrating our alcohol instruments Bud goes in after calibration to see hopefully 5.00% abv. pretty much on the nose. Not so recently. Now as low as 4.94% after slipping from 4.98% earlier in the year. Losing it graces by higher airs it may be toppling from its top spot and is no longer our control beer of choice. But it is changing. A tale of two Buds (early and late) would reveal much more. Over the years the international bitterness content has declined from about 12 in the late 90’s to 7-8 today — another parameter to watch.
That original post also included a discussion of increasing oxygen levels, but Spedding had a lengthy discussion with Paul Cobet, who’s the Director of the Technical Center for ABI in St. Louis. The oxygen question is apparently now less of a concern and appears to be instrument-driven, and Gary updated that with a newer post, Regaining its Graces — Driving Oxygen Down — Good for Budweiser. So while the plaintiffs may not have tested the beer — still odd, admittedly — there is apparently some reason to think their case may hold water after all.
As the news keeps swirling around the possible — I say inevitable — buyout of Grupo Modelo by Anheuser Busch-InBev in a breathless “will they, won’t they” kind of coverage, I’m utterly fascinated by the theater of it all. It’s especially interesting to see the many “business experts” weighing in with no real understanding of the history of the brewing industry or how it all works. These “instant experts” all seem to assume that general economics or business principles apply equally well to every scenario, yet fail to grasp that alcohol has always navigated a different path through the economic world, with extra layers of taxation, legislation and law, its moral or anti-alcohol critics, and has to abide by at least 51 sets of laws (federal laws plus one for each state). I brought this up last month in The Beer Monopoly, but this morning an economics reporter from the New York Times, Adam Davidson, weighed in with his own take on the shenanigans.
In his It’s the Economy column published today, Are We in Danger of a Beer Monopoly?, he gives his own version of reality. In his world, where there are nearly 2,400 American breweries, he at least admits many of them are “tiny,” but goes on to claim that a few “have become large national brands.” National, yes, but “large” is a somewhat relative term. They’re large compared to a tiny nanobrewery or even an average sized brewpub, but the volumes of beer manufactured by ABI and SABMIller are in another class altogether. All 2,398 of the other breweries represent much less than 10% of the total beer produced in the U.S., meaning there’s a fairly wide chasm between the two groups, even if “a handful” of them have been successful. Measured against the domination of the biggest two, even the most successful seem modest by comparison.
But this is an argument that many economists seem to make, and indeed it’s the same argument that ABI always makes when they’re trying to buy another global company. How can there be a monopoly with so much competition? Just walk down the beer set in an average grocery store and, if you know who owns or controls what, you’ll easily see who’s winning the beer wars. The power wielded by ABI and SABMiller is so far above that of any smaller brewer, or even the total of all of the smaller ones, that it really is a true David and Goliath relationship. Sure, the big guys throw a few crumbs to the little guys nipping at their heels, but they don’t feel seriously threatened by them. Lately, they’ve been paying closer attention because they’re losing incremental marketshare, but they’ll respond to any such loss, because it hurts the share price. But saying they’re on equal footing is the economic equivalent of pretending that employees and employers have equal bargaining power, as most economic textbooks continue to insist.
But here’s Davidson’s takeaway from recent events as ABI tries to win approval for buying Grupo Modelo. “So I was surprised to learn that the Justice Department is worried that Anheuser-Busch InBev, the conglomerate that owns Bud, is on the cusp of becoming an abusive monopoly.” That’s almost spit take worthy. “On the cusp?” ABI has been a de facto monopoly with one or two others for decades, all but controlling the marketplace, not that anybody has been particularly concerned in the business world.
Anyone who hasn’t had their head buried deep in the sand for last few decades has to have noticed that we live in a society utterly dominated by business interests. Business power is the only power that matters. Political power takes a back seat to it and the will of the people is something politicians invoke only when they’re trying to get elected. How else can you explain that corporations have all the benefits of being a person, with none of the responsibilities or consequences? How else can money be considered free speech to influence politics? How else can you explain the many businesses deemed too big to fail while the same individuals those corporations ruined are left swinging in the wind, with no life raft for the ordinary flesh and blood person.
Davidson goes on to give a flawed history of the brewery business, and seems to think that mergers are a relatively new phenomenon. Of course, brewery mergers and acquisitions have been going on in brewing since the late 19th century, and stopped only briefly for about thirteen years, during Prohibition. Then he says we’re “still in the very early stages of what appears to be a global version of the scale-based consolidation we’ve seen in the United States over the past century.” I can’t tell if that’s a joke? The global beer world has been dominated by an ever-shrinking group of very large conglomerates for at least the last three or four decades. It’s hardly a new thing. In 2010, the four largest beer companies accounted for over half of all beer worldwide, and according to another source the Top 5 were about half. Heineken, Carlsberg, and a few others are very large companies, indeed, and they, too, have been gobbling up breweries around the world for many, many years.
It’s probably not a coincidence that Davidson has his own S.H.A.M.E. profile. Why the New York Times continues to let him shill for big business, well’s that’s a whole other discussion, but it’s obvious he’s defending the pro-business position. It’s also clear that he’s part of the theater that will ultimately end in the DOJ’s approval of the deal between ABI and Grupo Modelo. Here’s my prediction of what will happen next. As always happens, the two parties will hammer out a compromise that was probably the deal everybody wanted in the first place, but this way both parties look good in the public eye. The DOJ will look like they’re being tough on big business and are protecting the public while ABI will look good because they were able to get the deal done, and their share price will shoot up. Everybody wins. As Shakespeare observed, “all the world’s a stage.” And we’re the audience. I just wish they’d stop pretending we’re all idiots.
Monday’s ad is for Schlitz, from 1954. Showing a backyard barbecue, or what was then called a “cookout,” the man working the grill is holding up his glass of beer while still sing his spatula on the burgers. I mentioned this in an earlier bbq ad, but again look at how dressed up they are for a cookout, the women in dresses and the men in what today we’d call business casual, though the guy in the pink shirt is sporting a tie. There’s lots of little details, like the odd facial expressions on the salt and pepper shakers next to the Schlitz sign in the lower left. The main man, the grillmaster, has shown up in a number of modern mash-ups, but this is the original ad he was taken from.