Avenue Vine

But in a front-page story in yesterday's Wall Street Journal, Anheuser-Busch chairman August Busch III and Muhleman admitted to having made several changes over the last 20-plus years to their flagship Budweiser and Bud Light brands, after vehemently denying it for months.

In written statements to the media last November, Muhleman repeatedly claimed that Anheuser-Busch had not changed the recipe for its beers. In a Nov. 11, 2005, statement, he said, "To suggest that we have made a formulation change in the way we brew our beers is a marketing ploy and is simply false. The recipes for Budweiser and Bud Light have not changed." Three days later, he reiterated the point: "It's a winning formula and we haven't changed it."

The Wall Street Journal story delved into the adjustments the country's largest brewer has made over the years to enable its products to appeal to the varying palates of a mass audience. But as consumers have become more willing to make active brand choices to meet their individual tastes, Anheuser-Busch has found itself vulnerable to smaller and more distinctive brands. The publication's focus on the challenge facing Budweiser and Bud Light resulted in a stark about-face from Anheuser-Busch.

"Moreover, for all its devotion to consistency, Anheuser concedes Budweiser has changed over the years. It quietly tinkered with its formula to make the beer less bitter and pungent, say several former brewmasters...," the Journal reported yesterday.

Later, the article reports: "Mr. Muhleman... says the company didn't set out to make the beers less bitter. He calls the change 'creep,' the result of endlessly modifying the beer... this is a change over 20, 30, 40 years,' says Mr. Muhleman... 'Over time, there is a drift.' "

And finally: "Anheuser didn't talk publicly about it, but the brewer also recently made changes in its brewing process to correct for over-lightening. In August 2003, Mr. Busch met with hops growers in Oregon and Washington and told them that Anheuser was planning to increase the proportion of hops used in its beers, according to several people who were there. Mr. Busch confirms the account, saying in a written statement: 'I told the growers of our desire to use more hops in our brewing for the purpose of delivering more amplitude and hop flavor in Budweiser.' "

Despite these now-admitted changes, Miller Lite still has more taste than Bud Light. Thanks in large part to a marketing message focused on making sure America's beer drinkers know that Miller Lite has more taste than Bud Light, Miller Lite has enjoyed steady growth since summer 2003.

About Miller Brewing Company:

As one of America's oldest brewers, Miller Brewing Company continues the commitment of founder Frederick J. Miller to brew 'confoundedly good beers' with 'uncompromising quality.' Through more than 150 years of innovation and brewing excellence, Miller has built a broad portfolio of award-winning beers that capture approximately 18% of the U.S. beer market. Miller's flagship brand, Miller Lite, is the great tasting, less filling beer that defined the American light beer category in 1975. The company also brews smooth, golden rich Miller Genuine Draft using a unique cold-filtering process Miller introduced in 1985. Miller's oldest brew is Miller High Life, the champagne of beers. Miller imports Peroni Nastro Azzurro, Pilsner Urquell and Foster's, and brews regional craft beers Leinenkugel's and Henry Weinhard's. Near-premium beers include Milwaukee's Best Light, Olde English 800, Mickey's Malt Liquor, Icehouse and Sharp's, a non-alcohol brew. Miller is a wholly owned subsidiary of SABMiller plc, the world's second largest brewer. For more information, visit www.MillerBrewing.com.

Contacts
Miller Brewing Company
Peter Marino, 414-931-4973
marino.peter@mbco.com

Source: Press Release; “Miller Nominates Anheuser-Busch Flip-Flops for List of America's Most Famous Fibs,” MILWAUKEE--April 27, 2006