A-B, Miller split court decision
June 2, 2004 - A federal judge has ordered Anheuser-Busch Cos. to pull one of its of ads in a new campaign that targets its chief rival, Miller Brewing Co., as being South African-owned - but ruled that A-B can continue running most of its new commercials. U.S. District Judge Lynn Adelman said posters displayed in liquor stores falsely state that Milwaukee-based Miller is owned by South African Breweries.
The ruling came as an advertising battle between A-B, brewer of Budweiser and Bud Light, and SABMiller continued to heat up. A-B called the ruling a victory because the judge held that two sets of television ads Miller wanted blocked can continue to run.
Philip Morris sold Miller to South African Brewers in 2002, which formed a new company called SABMiller PLC, based in London. Adelman said it was clearly untrue that Miller is "owned by South African Breweries," as it said on the posters, but he could not rule on claims that the company is still largely South African-owned.
"We are pleased that the judge agreed that our ads are truthful and should not be censored," said Francine Katz, Anheuser-Busch vice president of communications and consumer affairs. "We will continue to tell the public that Miller was purchased by South African Breweries and is South African-owned, a fact they seem to want to disavow."
Miller spokesman Mike Hennick said his company also considered the ruling a victory. "We're pleased that the court has found A-B's ads false and deceptive and that the court is ordering them to remove them immediately from the marketplace. We look forward to pursuing the broader issues in a trial," he said.
The ruling is a temporary solution until Adelman can hear all the arguments for both sides in a formal trial. A date has not yet been set for that, but Adelman will hear Miller's claim for another restraining order June 29, for promotions in which Anheuser-Busch calls Miller Lite the "Queen of Carbs."
Adelman also set a $2.5 million bond for Miller, to cover possible penalties for Anheuser-Busch's sales losses in case his decision is reversed at a trial.
Miller also alleged Bud distributors put 3-by-5 inch stickers on Miller Lite products, calling it the "Queen of Carbs" and "Owned by South African Breweries." In a deal worked out last week, Anheuser-Busch agreed to send a memo to all distributors reminding them that stickering or defacing competitors' products is illegal, but the company did not admit any guilt.