A headline in yesterday's editions stated that Anheuser-Busch Inc. had sued Miller Brewing Co. In fact, Anheuser-Busch asked the Federal Trade Commission to investigate Miller's marketing practices.
The nation's largest brewer. Anheuser-Busch, Inc., yesterday asked the Federal Trade Commission to investigate its hottest competitor. Miller Brewing Co. for alleged false advertising.
Anheuser-Buseh claims that Miller has been using the name Lowenbrau on beer brewed and sold in the United States, while implying in its advertising that the beer is imported from Germany.
The argument dates to a 1974 agreement between Miller, which is owned by Philip Morris, Inc., and the German brewery. Lowenbrau. In that agreement, Philip Morris was given the sole and exclusive right to import for sale in the United States beer that is sold under the name Lowerbrau.
The agreement also stipulated that Miller and Philip Morris could manufacture beer in the U.S. with the Lowerbrau name on it.
Marketing a domestically-produced beer under a label "traditionally associated with a product brewed in Germany is misleading to the public and constitutes an unfair method of competition." Anheuser-Busch charged in its filing with the FTC.
Traditionally, foreign beers are sold at higher prices in the United States.
The complaint is just one skirmish in an energetic and ongoing battle between the two domestic brewers that has been the subject of considerable press coverage in recent months.
Although Anheuser-Busch, with its mainstay label, Budweiser is by far the largest domestic brewer, Miller is on the move and is expected to shoot past the Josph Schlitz Brewery into the second spot in the industry within a matter of months.
Miller has scored major advances because of extensive marketing efforts of its Lite beer, a low calorie beer that was the first of many to hit the market.
Anheuser-Busch charges that Miller has spent "at least $1.5 million per year to promote and develop the name Lowenbrau within the United States . . . with the intention of continuing the imported image developed over a number of years by Lowenbrau, Munich."
Anheuser-Busch also said Miller has made every effort "to package, label, advertise and promote the domestically-produced product in such ways as to create the appearance that such product is actually a European-brewed import."
The U.S. version of Lowenbrau is brewed with different ingredients, by a "significantly different process," and "is not of like quality . . . as the beer brewed by Lowenbrau Munich which has been awarded medals for excellence at international product competitions," Anheuser-Busch alleged.
The result of this allegedly misleading advertising, according to Anheuser-Busch, is that Philip Morris, Miller and McCann-Erickson, the New York advertising firm that handles the Lowenbrau account in the U.S., have "improperly influenced consumer purchasing decisions throughout the United States."
The Lowenbrau advertising is alleged to be unfair under Section 5a of the Federal Trade Commission Act which simply states:
"Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful."
Anheuser-Busch also cited Section 12 of the Act, which forbids false advertising with respect to the purchase of food or drink.
The Lowenbrau can manufactured in the U.S. carries the statement "Lowenbrau Established 1382 Munich, Germay," and "Beer brewed under the Authority of Lowenbrau Munich."
Anheuser-Busch asked the FTC to take appropriate action "to assure that the unfair, deceptive and misleading practies being engaged in are discontinued and corrected."