Feb. 26 (Bloomberg) -- Anheuser-Busch InBev NV, the world’s biggest brewer, was sued by consumers in three U.S. states for allegedly overstating the alcohol content in its Budweiser beer.
AB InBev’s St. Louis-based Anheuser-Busch Cos. routinely adds extra water to its finished products to produce malt beverages with significantly less alcohol content than displayed on its labels, violating state statutes on consumer protection, according to a complaint filed yesterday in federal court in Philadelphia. Similar lawsuits were filed in federal courts in New Jersey and San Francisco.
“AB’s customers are overcharged for watered-down beer and AB is unjustly enriched by the additional volume it can sell,” Thomas and Gerald Greenberg said in the Philadelphia complaint.
AB InBev, the maker of Budweiser and Stella Artois, controls 39 percent of the U.S. beer market. The company is seeking government approval to buy the rest of Grupo Modelo SAB, Mexico’s largest beermaker, for $20.1 billion. The Modelo brands account for 7 percent of the U.S. market. AB InBev shipped 98.5 million barrels in the U.S. in 2011, according to Beer Marketer’s Insights.
The claims against Anheuser-Busch are “completely false,” Peter Kraemer, the company’s vice president of brewing and supply, said in an e-mail.
“Our beers are in full compliance with all alcohol labeling laws,” Kraemer said. “We proudly adhere to the highest standards in brewing our beers, which have made them the best-selling in the U.S. and the world.”
Budweiser, the No. 3 beer in the U.S. in 2011, was introduced in 1876 when company founder Adolphus Busch set out to create a national beer brand, according to the Anheuser-Busch website. Each batch of the beer, which blends American aroma hops with barley malts and rice, follows the same family recipe used by five generations of brewmasters, according to the website.
The complaints accuse the AB InBev unit of also mislabeling the amount of alcohol in Bud Ice, Bud Light Platinum, Michelob, King Cobra, Busch Ice, Black Crown, Bud Light Lime, Hurricane High Gravity Lager, Natural Ice and Michelob Ultra.
Josh Boxer, an attorney for plaintiffs in California, said additional lawsuits will be filed against the company in Ohio and Colorado. The California complaint, filed by Sonoma County residents Nina Giampaoli and John Elbert, seek to represent consumers in the state and consumers nationwide who have purchased AB InBev products in the past five years. All three complaints seek damages exceeding $5 million.
Total damages “could be quite significant based on the volume of products that AB produces a year,” Boxer said.
It’s unclear in the complaints how the plaintiffs determined the alcohol content was less than stated. Boxer said the complaints are based on information from former workers at some of the company’s 13 U.S. breweries.
“On information and belief this is a corporate policy of AB to intentionally short the alcohol content,” Boxer said in a phone interview. “We believe this is a corporate policy that comes from AB InBev and trickles down.”
The Greenbergs said they routinely purchased as many as four cases of Budweiser a month during the past four years, with the contents labeled as having an alcohol content of 5 percent by volume, according to the lawsuit.
Giampaoli regularly purchased one six-pack of Budweiser a week during the past four years, according to that complaint filed Feb. 22. Brian Wilson, who is suing Anheuser-Busch in federal court in New Jersey, purchased one case of Michelob Ultra per month. The label stated the beer contained 4.2 percent alcohol by volume, according to his complaint filed yesterday.
AB InBev allegedly keeps the alcohol level for each batch of malt beverage at specifications above the desired final product at least initially then adds water and CO2 to the final stage of the brewing process, according to the complaint.
The company began using in-line alcohol measuring instruments known as Anton Paar meters that can measure the alcohol content in malt beverages to within hundredths of one percent, according to the complaint. AB allegedly uses the precision technology to shave the alcohol content instead providing consumers with a product based on the stated label, the Greenbergs said in the complaint.
Adding water to the brewing process cuts the stated alcohol content by 3 to 8 percent, Boxer said.
In addition to damages, the lawsuits are seeking a court order requiring Anheuser-Busch to fund a “corrective advertising campaign” to remedy its allegedly illegal conduct.
The case is Greenberg v. Anheuser-Busch Cos LLC, 13-cv-01016, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).
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