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Price War Begins

June 16, 2005 - Miller Brewing will resume its ad campaign of direct comparisons with Bud Light and also announced yesterday that they would cut prices, indicating the beginning of an anticipated summer price war.

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Miller was "out-executed" by competitors over the two-week period including the Memorial Day holiday and ending June 4, the company said. Miller will reduce prices for Miller Lite, Miller Genuine Draft beers and other beers in select markets where Anheuser-Busch has already cut prices.

The Labor Department reported yesterday that the price of beer fell 0.9 percent in May from a year ago. It's proof that discounting, led by A-B is bringing down prices for the whole industry - specialty beers excepted.

"Bud Light is a massive brand that is becoming increasingly vulnerable to consumer reconsideration, and we'll continue to make the comparative argument for Miller Lite completely explicit," said Charlie Frenette, interim chief marketing officer at Miller, in a statement.

In the new ad spots, Bud Light drinkers are startled to learn that Miller Lite has more taste. the company says.

In promoting a taste strategy for its brands, primarily Miller Lite, Miller last year began making direct challenges to A-B, including a taste test that had drinkers agreeing Miller products had "more flavor" or "more taste." Other spots had Bud Light drinkers outside A-B headquarters, announcing through a megaphone that they had switched to Miller.

A-B late last year filed protests with TV networks over several Miller spots that the St. Louis brewery claimed were based on improperly conducted taste tests. Several of the Miller spots were pulled by the networks, which allowed other Miller commercials in the series to continue on the air.


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