Someone is going to go ballistic

Anheuser-Busch is launching Bud Light Lime on Cinco de Mayo, a top selling day for Corona Extra. How much more confrontational can matters become between Anheuser-Busch and Grupo Modelo?

You could argue, giving August Busch IV and his team the benefit of doubt, that with the U.S. economy in a tizz more and more consumers are going to trade their expensive cocktails, imports and craft brews for more affordable domestic beers. Given that sales of imported beer increased just 1.4 percent in 2007, compared to about 15 percent in 2006, according Beer Marketer’s Insights, Anheuser-Busch is right in putting more of its marketing muscle behind its mainstay brands such as Budweiser, Bud and Michelob by increasing its total media spending by an estimated 10 percent this year.

According to media reports, the brewer is expected to fork out about USD 70 million more than it did last year on television advertisements for its top-selling beers, Bud Light and Budweiser, while its other two core brands, Michelob and Michelob Ultra, will receive an extra USD 30 million in ads.

What leaves us rubbing our eyes in wonder is the following: Anheuser-Busch plans to roll out Bud Light Lime on 5 May -- Cinco de Mayo -- with a reported USD 35 million marketing budget behind it.

Cinco de Mayo is a fixture in the U.S. holiday calendar. Originally it was a regional Mexican holiday commemorating the victory of Mexican forces over French forces in the Battle of Puebla on 5 May 1862.

However, in the U.S., Cinco de Mayo has taken on a significance beyond that in Mexico. On this day millions of people celebrate their Mexican heritage. To Mexicans Cinco de May is what St. Patrick’s Day is to the Irish, the Oktoberfest to the Germans and the Chinese New Year to the Chinese.

Now why would Anheuser-Busch use a date as charged with Mexican cultural significance to launch an all-American beer flavoured with a bit of lime? Clearly, the brewer must have an ulterior motive. Because it’s as clear as beer that the date of the launch is to antagonise a competitor: Grupo Modelo, the brewer of Corona Extra.

The last time matters between the two companies came to a head was a few years ago when Anheuser-Busch used a rather tasteless xenophobic advertising campaign for its American beer brands, whose main victim was: Corona Extra.

Needless to say that Grupo Modelo’s CEO, Carlos Fernandez in Mexico City went ballistic when he was informed of Anheuser-Busch’s plans.

So come Cinco de Mayo 2008 and Anheuser-Busch will launch another confrontational challenge for Corona. It cannot be interpreted any other way. That sort of advertising budget for a brand extension which is probably not going to live for long can only mean one thing: warfare. Or how much volume does Anheuser-Busch expect to sell of Bud Light Lime before it has earned every single dollar the St Louis brewer has spent on it?

What adds a bit of piquancy to this is the fact that Anheuser-Busch is Grupo Modelo’s major shareholder. It’s like shooting yourself in the foot, isn’t it? Unless Anheuser-Busch has been bearing grudges against Grupo Modelo. Last year Modelo set up a U.S. joint distribution venture for Corona Extra with Constellation Brands, Crown Imports, thus rendering a big disservice to Anheuser-Busch’s distributors. Read: Modelo cut them out.

Anheuser-Busch may have been holding grudges, but this is not to say it is not a shrewd operator. If there is one thing on Anheuser-Busch’s mind, it’s bringing Grupo Modelo firmly into its fold. Perhaps Bud Light Lime is one way to try and force the issue.

Ina Verstl

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Source: Beer Marketer’s Insights