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Bud Beer Scandal Came to a Head, Went Flat



So Anheuser-Busch was quick to take advantage of this publicity for its marketing campaigns. The company published a full page ad in 10 major U.S. newspapers poking fun at the lawsuit. On the advertisement the company displays one of the 71 million cans of water donated to disaster relief at the time of publication. Above the can was a statement : "They must have tested one of these."

Did this "scandal" make a difference. Maybe in the short term but over the long term, I doubt it. Budweiser is as American as apple pie, lawsuits or no.

Whatever drinkers might have thought, shareholders were calmed, the controversy went away and the stock has been as heady as ever, up by more than 16% for the year to date. But top-line growth is flat as drinkers turn their thirst elsewhere.

Light beer drinkers have moved away from Budweiser and Coors, brewed by Molson Coors (TAP). There has been a trend towards craft beers with their unique flavors and complexity.

The Brewers Association reported mid-year 2013 growth of 15% in dollar sales and 13% in volume for craft beer. Should the shift towards craft beer continue, it will mark the fourth straight year of double-digit growth for craft. Even Anheuser-Busch has been trying to tap the craft beer market with acquisitions. 

But to really make a splash, it would need to buy one of the larger players in the craft beer space, such as Sierra Nevada. I expect the craft beer trend to continue as industry leaders have predicted the opening of thousands of breweries, all which will continue to put pressure on Anheuser-Busch's growth.

Don't worry about your supply of Bud, however. Anheuser-Busch will always be around, in the bars and on the shelves throughout America.

As for whistleblower James Clark, he was sued by his former employer, which claimed he "improperly used and misrepresented our confidential information to instigate these lawsuits, all for his personal gain."

Personally, I think this is just water over the dam.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Stock quotes in this article: BUD, TAP 

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