AB–InBev faces storm in a beer glass
Who are these people that are suing Anheuser–Busch for millions of dollars in damages over claims that the brewer is watering down its Budweiser, Michelob and other brands? Since the end of February 2013 at least eight lawsuits have been filed against Anheuser–Busch (A–B), the U.S. unit of AB–InBev, accusing it of adding water to several beers, bringing the alcohol levels in the beers below those stated on the labels.
Hello, are these plaintiffs suffering from the symptoms of mass hysteria? Or are there any merits to their claims that they have received less bang for their buck?
In the European Union, for example, labelling regulations permit an "analytical tolerance" of +/–0.5% ABV for all beers below 5.5% ABV. As a consequence, a beer with stated 5% ABV can in fact be 4.5% ABV or 5.5% ABV. If the beer has over 5.5% ABV, the legal tolerance is
+/–1.0% ABV.
These fairly wide tolerances are meant to help small brewers that may have trouble in always getting the stated alcohol content right. However, it is assumed that big brewers on the whole manage to get within +–0.1% ABV of the stated alcohol content. Food monitoring agencies in all EU countries keep a close eye on these things to prevent any "systematic exploitation" of these tolerances.
In the U.S., there are labelling regulations in place with similar tolerance ranges. If the U.S. plaintiffs and their lawyers had bothered to read the law concerning alcohol labelling, they would have found the following:
“Tolerances. (1) For malt beverages containing 0.5 percent or more alcohol by volume, a tolerance of 0.3 percent will be permitted, either above or below the stated percentage of alcohol. Any malt beverage which is labelled as containing 0.5 percent or more alcohol by volume may not contain less than 0.5 percent alcohol by volume, regardless of any tolerance.”
This means that a 5% ABV Budweiser can have an alcohol content as low as 4.7%. A 4.2% ABV Michelob Ultra could legally drop to 3.9% ABV and still be in compliance with what its label says.
In wine, tolerances are even wider. Wineries in the U.S. can actually decide which alcohol content to put on their labels. A wine with an actual alcohol of 13.3% ABV has within its label alcohol options a range from 11.8% ABV to 14.0% ABV.
Have consumers complained if the label said “14% ABV” and all they got was a 13.3% ABV buzz?
Given the legal tolerances, A–B’s technical brewers have not broken any laws, even if they used the regulation’s concession to their advantage (think lowering costs to boost profits) – which they vehemently deny.
But this is the U.S. and litigation is a national pastime. In late 2010, the New York Times reported that in the U.S. each year about USD 310 billion, or about USD 1,000 for each person in the country, are spent on tort litigation. This includes the costs of tort litigation and damages paid to victims. About half of this total is for legal fees and goes towards the lawyers.
According to the NY Times, “most other countries do not allow contingent fees (where lawyers are paid only if they win from the proceeds of the lawsuit). Allowing contingent fees increases the number of suits. In most of the world a losing party is sometimes responsible for the legal costs of the winning party; this is not true in the U.S., so lawyers are willing to bring more risky cases. The American system is also much friendlier to group litigation (such as class actions) than is the rest of the world.”
This may help explain why so many Americans have decided to sue A–B and why A–B is busy trying to put out crisis fires.
In early March there were big ads in several major U.S. newspapers. Although A–B’s advertisement did not directly address the accusations that its brands have been watered down, those who read between the lines of “The Anheuser–Busch logo is our ironclad guarantee that the beer in your hand is the best beer we know how to brew. We take no shortcuts and make no exceptions. Ever” knew why A–B paid for these ads in the first place.
Interestingly, the “flame thrower” responsible for A–B’s crisis PR is a former
A–B employee now turned Californian lawyer, according to St Louis media. He in turn has been sued by A–B for orchestrating the lawsuits in order to misrepresent the company’s beer–making processes, smearing the company and its brands, U.S. media say.
It seems unlikely that the “scandal” is going to die down any time soon as litigation lawyers usually work closely together with litigation PR experts who know how to keep the issue simmering in the media in the hope that the lawsuit will ultimately be successful.
