COMMENT: SABMiller, AB - see you in court?

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SABMiller may be backing down a little in its fight against Anheuser-Busch's marketing, but dropping the case altogether may be less than ideal for both sides. The legal battle has made interesting news, and increased media coverage has resulted in greater consumer awareness of both brands. This may conceivably boost sales of both of their beers.

After months of trading adversarial advertisements, SABMiller and Anheuser-Busch have gone to court to settle their differences. While beer giant SABMiller has since dropped a portion of its legal complaint, neither company is backing down from their escalating rivalry.

The latest fight began when SABMiller launched a marketing campaign in July 2003 publicising Miller Lite, the company's largest brand, as having fewer carbohydrates than Anheuser-Busch's Bud Light. As a result, sales of Miller Lite increased while those of Bud Light slowed.

In early 2004, SABMiller went further by targeting Budweiser's reputation as the "King of Beers," advertising its Miller brand as the "President of Beers," to coincide with the current presidential campaign. Anheuser-Busch's acerbic response proclaimed Miller the "Queen of Carbs," and alleged that Miller's ownership by a South African brewery made it ineligible to run for the presidency in the US.

In response, SABMiller sued, alleging the South African advertisements misled consumers about company ownership - SABMiller is based in London - and that Anheuser-Busch distributors had placed its own labels over Miller displays and products. SABMiller also stated that the "Queen of Carbs," moniker was homophobic. This latter portion of the suit has now been dropped, due to the lack of an adverse effect on sales.

The negative exposure has served a positive purpose. Both beer manufacturers have received free publicity from the lawsuit. News outlets have covered the story, recounting details of the rivalry but also nutritional and price information of Miller and Budweiser products. The controversy is generating discussion among consumers, serving as an example of effective viral marketing.

Indeed, it would be little surprise if both companies' products - especially their low-carb beers - enjoyed a sales boost on the back of the dispute. Coming so soon after the two clashed in a takeover tussle for the Chinese brewery Harbin, SABMiller and Anheuser-Busch seem determined to adhere to the old adage that there is no such thing as bad publicity.

Sectors: Beer & cider

Companies: SABMiller

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