Patriot games could backfire for Anheuser

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Anheuser-Busch's red-white-and-blue strategy could result in a black eye for the brewer.

Distributors fear A-B's potshots at competitors for being un-American could backfire, painting the company as more jingoistic than patriotic to the immigrant base that populates Bud's All-American country.

On its Web site and in point-of-sale materials distributed to wholesalers, Anheuser-Busch waves the flag and assails Miller Brewing Co. and Coors Brewing Co. for their control by "foreign interests" and for closing breweries.

What it neglects to mention is that those companies employ thousands of Americans, that A-B itself has closed a U.S. brewery within the last decade and that nearly $5 billion of the King of Beer's assets are international.

A sample shot at Miller, part of London-based SABMiller, on "With over 80% of its employees outside of the United States, it's hard to ignore a simple question. Does Miller reflect the American spirit?"

The nativist broadsides-which claim most profits from U.S. sales of Miller and Coors products "go outside of the U.S"-are expected to flop as sales tactic. Anheuser-Busch's moves likely won't affect purchasing decisions either way, observers said. Rick Murray, exec VP of Edelman, Chicago, said most consumers don't care who owns a brewery. "It's frankly a waste of advertising money," he added, pointing out that Miller and Coors generate thousands of jobs in the U.S.

There's also real potential that the attacks could blow back at Anheuser-Busch. Its positioning, illustrated in a point of sale piece that crows "American owned. Born here. Brewed here," could alienate consumers who weren't born in the U.S., and threatens to turn off the general market.


Anheuser-Bush declined to comment for this story.

Harris Diamond, CEO of the public-relations firm Weber Shandwick, New York, likened the messaging to the "politics of character destruction"-which can hurt the accuser if overplayed. He said the A-B charges don't cross that line but "are right on the edge."

Some wholesalers are nervous. One in the Northeast said he is not distributing the Miller- and Coors-bashing materials to immigrant-owned stores. "We're handing it out but we're not handing it out at all places," said the wholesaler. "We have to be careful here."

The attacks fuse two marketing strategies-bashing Miller and playing the patriot card-that A-B hopes to use to reverse slumping sales in what's shaping up to be a brutally competitive summer.

During the Super Bowl, Anheuser-Busch ran an ad showing U.S. soldiers being applauded in an airport. A new promotion, "Here's to the Heroes," involves the Clydesdales visiting various cities. People can make video messages that will be sent to troops stationed overseas. Two Clydesdale hitches will meet under the St. Louis Arch on July 4.

As Memorial Day approaches, the brewer is in attack mode. Its Web site and point-of-sale materials note that Miller-which Philip Morris Cos. sold to South Africa Breweries in 2002-is 68%-owned by foreigners. Coors, which merged with the Canadian brewer Molson to create Molson Coors Brewing, is accused of being 51% owned by non-U.S. interests.

The Web site points out that Miller closed a Washington State brewery since the acquisition and that Coors is shuttering a Tennessee facility. But that all-American swagger overlooks that Anheuser-Busch closed a brewery in Tampa, Fla., 10 years ago and is increasingly investing in overseas markets.

"We look forward to participating in an increasingly more global beer business," said the shareholders letter in the company's latest annual report. In fact, the brewer shelled out $700 million last year to buy China's Harbin Brewery. Its international beer assets stood at $4.7 billion in 2004, up 47% from 2002, according to the report. In 2004, $187.9 million of foreign earnings were considered permanently reinvested outside the U.S.

"It's the odd company that's ... bulletproof to such accusations," said Michael O'Brien, general manager-president of PR firm Cohn & Wolfe.

That's exactly the point Doug Brodman, Miller senior VP-sales and distribution, made last week in a memo to the brewer's wholesalers. "Given the global nature of today's business environment, we believe that A-B is taking a significant risk with this strategy," the memo said. "You can rest assured we are at work making sure they will have to live with the full implications of any short-sighted actions."

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