The Judicial Panel on Multidistrict Litigation (JPML) has ordered the centralization of six actions claiming that Anheuser-Busch Companies, LLC, systematically overstated the alcohol content of its malt beverage products by diluting them with water. In Re: Anheuser-Busch Beer Labeling Mktg. & Sales Practices Litig., MDL No. 2448 (JPML, decided June 10, 2013). The putative class actions being centralized have all alleged that the beer manufacturer added extra water to 11 different products despite its claims that any deviation from the alcohol content stated on the product label “is within the range permitted by federal regulation.” In transferring the actions to the U.S. District Court for the Northern District of Ohio, the panel agreed with plaintiffs that “notwithstanding defendants’ apparent acknowledgement of some variance for unspecified products, the alleged conduct at issue—systematic overstatement of alcohol content—will remain in dispute and will involve complex discovery concerning the calibration of the involved equipment…
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The Department of Justice (DOJ) has published the antitrust complaint filed with a proposed final judgment and competitive impact statement, resolving its concerns that the acquisition of Grupo Modelo S.A.B. de C.V. by Anheuser-Busch InBev SA/NV would violate section 7 of the Clayton Act. According to DOJ, the final judgment requires the companies “to divest Modelo’s entire U.S. business to Constellation Brands, Inc.,” or to an alternative purchaser if that transaction fails, to avoid a threat to the competitive U.S. beer market. Court approval of the agreement is required, and public comment is requested within 60 days of publication. See Federal Register, May 22, 2013.
Scientists presenting at the National Meeting & Exposition of the American Chemical Society have reportedly identified elevated levels of arsenic in some beers sold in Germany. According to Mehmet Coelhan, who conducted the study of 140 beers as part of a monitoring program, “the discovery could be of importance for breweries and other food processors elsewhere that use the same filtering technology implicated in the elevated arsenic levels in some German beers.” The team concluded that arsenic was released into the beer from a filtering material called “kieselguhr, or diatomaceous earth, that’s used to remove yeast, hops and other particles and give the beer a crystal clear appearance.” According to Coelhan, “The resulting arsenic levels were only slightly elevated, and it is not likely that people would get sick from drinking beers made with this filtration method because of the arsenic. The arsenic is still at low levels—the risk of…
Putative class actions have been filed against the Anheuser-Busch Cos. (AB) in federal courts in California, New Jersey and Pennsylvania, alleging that “consumers receive watered down beer containing less alcohol than is stated on the labels of AB’s products.” Giampaoli v. Anheuser-Busch Cos., LLC, No. 13-0828 (N.D. Cal., filed February 22, 2013); Wilson v. Anheuser-Busch Cos., LLC, No. 13-1122 (D.N.J., filed February 25, 2013); Greenberg v. Anheuser-Busch Cos., LLC, No. 13-1016 (E.D. Pa., filed February 25, 2013). Claiming that the company uses a technology enabling it to create precise alcohol levels in its beer products, each plaintiff seeks to certify a nationwide class of consumers who have purchased AB products such as Budweiser®, Bud Ice®, Bud Light Premium®, Michelob®, Michelob Ultra®, Hurricane High Gravity Lager®, King Cobra®, Busch Ice®, Natural Ice®, Black Crown®, and Bud Light Lime®. Alleging violations of consumer fraud laws and breach of state and federal warranty laws, the plaintiffs…
The Boston University School of Public Health and Johns Hopkins Bloomberg School of Public Health’s Center on Alcohol Marketing and Youth (CAMY) have published a study identifying alcohol brands allegedly consumed by underage youth. Michael Siegel, et al., “Brand-Specific Consumption of Alcohol Among Underage Youth in the United States,” Alcoholism: Clinical & Experimental Research, February 2013. According to a February 11, 2013, CAMY press release, the top 25 brands that study participants reported consuming during a 30-day period “account for nearly half of youth alcohol consumption,” with 27.9 percent of study participants reporting that they consumed Bud Light, 17 percent reporting that they consumed Smirnoff malt beverages, and 14.6 percent reporting that they consumed Budweiser. The study’s authors reportedly based their findings on Internet surveys completed by 1,032 participants aged 13 to 20 years who responded to questions about “their past 30-day consumption of 898 brands of alcohol among 16…
In the wake of an antitrust lawsuit filed by the U.S. Department of Justice (DOJ) seeking to enjoin the acquisition of Mexican brewer Grupo Modelo, Anheuser-Busch InBev (ABI) has reportedly agreed to sell a massive Modelo brewery, including full U.S. rights to the Corona® and Modelo® brands, to Constellation Brands, said to be the world’s largest wine company, for $2.9 billion. Additional information about the antitrust litigation appears in Issue 469 of this Update. The brewery, Compañía Cervecera de Coahuila, situated near the U.S.-Mexico border, produces Corona®, Corona Light® and Modelo Especial®. Constellation, which filed a motion to intervene in the DOJ lawsuit to protect its interests, stands to gain greater access to the American beer market under a revised agreement that would establish Constellation’s Crown Imports beer division as completely independent. Under the deal’s original terms, Constellation would have paid its joint venture partner Modelo $1.85 billion for the 50…
Evidently in response to public comments, the Federal Trade Commission (FTC) has modified its agreement with Phusion Projects, LLC to require an alcohol facts panel on certain-sized cans of its Four Loko fruit-flavored malt beverage. In re Phusion Projects, LLC, No. C-4382 (FTC, order entered February 6, 2013). The agreement resolves charges that the company and its principals falsely claimed that a 23.5-ounce can contained “the alcohol equivalent of one or two regular 12-ounce beers, and that a consumer could drink one entire can safely on a single occasion.” To the contrary, according to FTC’s administrative complaint, the products contain the alcohol equivalent of four to five 12-ounce cans of beer. Without admitting liability, the company has agreed to label any container of Four Loko or other flavored malt beverage with more than two servings of alcohol with an alcohol facts panel. The panel will set forth the “the container…
The U.S. Department of Justice (DOJ) has filed an antitrust lawsuit against Belgian brewer Anheuser-Busch InBev SA/NV (ABI) and Mexican brewer Grupo Modelo S.A.B. de C.V., seeking to enjoin ABI’s June 28, 2012, acquisition of Modelo. United States v. Anheuser Busch InBev SA/NV, No. 13-127 (D.D.C., filed January 31, 2013). DOJ contends that the $20.1 billion deal, which would combine the largest and third largest beer companies in the United States, “would substantially lessen competition for beer in the United States as a whole and in 26 metropolitan areas across the United States, resulting in consumers paying more for beer and having fewer new products from which to choose.” According to the complaint, Modelo is the only major beer company that has consistently resisted ABI’s annual price increases and has gained a majority share of some markets in California, New York and Texas by pursuing an aggressive marketing strategy with innovative…
In a long-running dispute between Anheuser-Busch LLC and Budějovický Budvar, národini podnik, the European Union’s (EU’s) General Court has determined that a Czech brewery cannot stop the St. Louis-based company from using the “Bud” mark in a number of EU member nations. Budějovický Budvar, národini podnik v. Anheuser-Busch LLC, Nos. T-225/06 RENV, T-255/06 RENV, T-257/06 RENV, & T 309/06 RENV (Gen. Ct., decided January 22, 2013). The matter was before the court on remand from the Court of Justice. The court found that the Czech brewery’s evidence of sales in France and Austria were so small that the company could not show “trade of a sign of more than mere local significance.” The parties were ordered to pay their own costs.
U.K. members of Parliament (MPs) have reportedly agreed to revisit a beer duty escalator tax that raises the price of a pint each year by 2 percent plus the rate of inflation. According to media reports, Conservative MP Andrew Griffiths argued in the House of Commons that the current beer tax has cost the country thousands of jobs as beer sales decline and pubs are forced out of business. The debate purportedly concluded with 100 MPs voting to review the tax despite Treasury Minister Sajid Javid’s concern that the government would lose £105 million over the next two years if it were abolished. “The reality is since the introduction of the beer duty escalator [in 2008], beer duty has increased by a crippling 42 per cent,” said Griffiths, who chairs the All-Party Parliamentary Beer Group. “The point about an escalator is you stop when you get to the top. We…
