Molson Coors (NYSE: TAP) can really hold a grudge. The mega brewer is still wincing from the smackdown Anheuser-Busch InBev (NYSE: BUD) gave it during the Super Bowl with its misleading Bud Light corn syrup ads, but despite lawsuits, half-hearted apologies, and donations to corn farmers, Molson is still pouting and refusing to participate in an industrywide marketing campaign to get people to drink more beer.
Speaking to advertising industry publication Ad Age, Molson's MillerCoors spokesman says it likes the ad idea, but "we can't reengage on the campaign until Anheuser-Busch stops their category denigration campaign."
It's time for MillerCoors to get over the Bud Light blues. Image source: Anheuser-Busch InBev.
Beer is not getting any more popular
You would think combating falling beer consumption would be prioritized above bruised feelings. Although beer remains the adult beverage of choice, with 43% of adults choosing to drink it compared to 34% and 28% for wine and spirits, respectively, that's down from over 60% in the 1990s. And it's hurting the brewers' sales volumes.
Anheuser-Busch saw a 1.2% drop in the first quarter (on top of the 4.2% drop a year ago), Molson saw a 3.8% decline, and Heineken suffered a mid-single-digit decline.
The marketing campaign is being conducted by the Beer Institute, the National Beer Wholesalers Association, and the craft beer industry's trade group, the Brewers Association. Details of what the promotional event will entail haven't been released yet, but it's reported to be aimed at lifting beer as a whole, not any particular brand. Brewers including Anheuser-Busch and Constellation Brands (NYSE: STZ), which owns the Mexican Corona and Modelo brands, one of the strongest segments of the beer industry today, are contributing financially to the effort.
By taking its ball and going home, though, MillerCoors is hurting the broader message because Heineken (NASDAQOTH: HEINY) says if all of the biggest brewers aren't on board with contributing to the campaign, it isn't going to be either.
Bud Light's big fumble
Molson Coors is being obstinate because Bud Light ran three commercials during the Super Bowl implying that the use of corn syrup by Coors Light and Miller Lite was inferior to Bud Light's use of rice.
While it's true the brands do use corn syrup in their brewing process, it's done to feed the yeast, and none remains after fermentation is complete. Moreover, the ads purposefully ignored the fact that quite a number of Anheuser-Busch's own beers use corn syrup, and it was clear the Bud Light ads were trying to draw a comparison between corn syrup and high fructose corn syrup, the sweetener in many beverages, particularly soda, that has been linked to obesity.
The resulting brouhaha over the ads led to several events in support of corn farmers, including one by Anheuser-Busch, which ended up donating $500,000 to Farm Rescue, an organization that helps farmers in financial distress. Molson Coors even sued Bud Light over the "corn-troversy," litigation that is still ongoing but has seen some rulings in its favor.
Better off brewing
By refusing to participate in the industry-boosting campaign, though, Molson Coors is simply spiting itself. Even though Bud Light's advertising continues, it was the one likely actually hurt by the campaign as many of its misleading aspects were publicized.
Nielsen data suggested Bud Light sales fell faster in the four weeks after the Super Bowl ads ran, dropping 9.2%, than it had in the same period the year before, or 6.7%.
Molson should just take the win and move beyond this issue for the sake of the industry and its own interests. It's time to get back to brewing and getting consumers interested in drinking beer again.
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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of Molson Coors Brewing. The Motley Fool recommends Anheuser-Busch InBev NV and Constellation Brands. The Motley Fool has a disclosure policy.
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