A-B has launched "Budweiser Genuine Draft" in China, the world's largest and fastest-growing beer market. BGD, an unpasteurized lager sold in a clear bottle and meant to taste like it flowed from a tap, strikes some as similar to 20-year-old Miller Genuine Draft, a unpasteurized lager in a clear bottle whose main selling point is its draft-like taste.
While U.S. beer drinkers may scoff at the apparent imitation, in China it was BGD that beat MGD to market -- it launched last summer. Miller's Chinese joint venture last week announced an "agreement in principle" but not a timeline to bring MGD there.
Historian Maureen Ogle, whose recent book "Ambitious Brew" is a history of American beer, said this is reminiscent of how Milwaukee beer drinkers drank Ernest Miller's Budweiser before Adolphus Busch's. "What comes around goes around," Ms. Ogle chuckled. "But the stakes are a lot higher in this case."
Indeed, while A-B sued to stop Miller from making its own Budweiser in 1893, it regarded Miller at that time as an "annoying gnat" that was no threat to its larger business, Ms. Ogle said. But there's nothing insignificant about the competition for brewing supremacy in China, where A-B and SABMiller, Miller's South Africa-based parent, are grappling for growth that long ago became impossible in the fading U.S. beer market.
The Chinese beer market surpassed the U.S. in volume during 2003 and has continued to grow at an 8% clip. SAB Miller's Snow is the largest brand, but A-B, which outbid SAB for the Harbin brewery in 2004, has a joint venture with the country's largest brewery, Tsingtao, and brews its trademark brands there, so it has the largest share of the total market.
Both brewers have vowed increased media spending as Chinese consumers increasingly identify with individual brands. And both brewers are growing, too: SABMiller's brands grew 27% in the first half of 2006, while A-B's grew 20% through the first nine months.
Not 'trademarkable' language
A Miller Brewing Co. spokesman said A-B would never be able to launch BGD in the U.S. because consumers would see it as an imitation. But Miller does not appear to have any recourse to prevent A-B from using the "genuine draft" label abroad. "As we understand it, those words are descriptive and not trademarkable," he said.
An A-B spokesman said the Genuine Draft name was inspired by the beer's taste, not MGD, since Chinese beer drinkers prefer the taste of draft beer.