Judge rules Anheuser-Busch must pull set of anti-Miller ads

MILWAUKEE -- A federal judge Friday night ordered Anheuser-Busch Cos. to pull one of three sets of ads in a new campaign that targets its chief rival, Miller Brewing Co., as being South African-owned.

U.S. District Judge Lynn Adelman said the ads that must be pulled -- posters displayed in liquor stores -- falsely state that Milwaukee-based Miller is owned by South African Breweries.

The judge said in issuing a preliminary injunction that two sets of television ads Miller wanted blocked may continue to run.

Philip Morris sold Miller to South African Brewers PLC in 2002, which formed a new company called SABMiller PLC, based in London.

Adelman said it was clearly untrue that Miller is "owned by South African Breweries," as it said on the posters, but he could not rule on claims that the company is still largely South African-owned.

Anheuser-Busch claimed the judge's decision upheld the truthfulness of its campaign, despite the ruling against the posters.

Miller spokesman Mike Hennick said his company also considered the ruling a victory.

Miller attorney Christopher Cole said in court that the Anheuser-Busch ads were false in claiming that Miller is owned by a South African company and were misleading to consumers because they imply Miller beer is not brewed in the United States.

Anheuser-Busch attorney Peter Moll contended that SABMiller is a South African company because a majority of its stockholders and its top three executives are South Africans.

The judge said it was unclear what standard should be used in deciding ownership, particularly since both companies made competing claims.

Miller's motion claimed St. Louis-based based Anheuser-Busch, maker of Budweiser and Bud Light, is unfairly hurting Miller Lite sales with its recent "Unleash the Dawgs" campaign.

Friday's injunction is a temporary remedy until Adelman can hear all the arguments for both sides in a formal trial. A date has not yet been set for that, but Adelman will hear Miller's claim for another restraining order June 29, for promotions in which Anheuser-Busch calls Miller Lite the "Queen of Carbs."

Adelman also set a $2.5 million bond for Miller, to cover possible penalties for Anheuser-Busch's sales losses in case his decision is reversed at a trial.

The judge watched commercials from both companies, including a Miller ad in which a man tries to debate a Clydesdale, a symbol of Budweiser beer, over its "American-ness," and an Anheuser-Busch ad in which two lizards discuss Miller's acquisition by a South African company.

Miller also alleged Bud distributors put 3-by-5 inch stickers on Miller Lite products, calling it the "Queen of Carbs" and "Owned by South African Breweries."

Miller gave the court photos of Miller Lite with stickers bearing the Bud Light logo that read, "All light beers are low in carbs. Choose on Taste."

In a deal worked out Thursday night, Anheuser-Busch agreed to send a memo to all distributors reminding them that stickering or defacing competitors' products is illegal, but the company did not admit any guilt.

Miller attorneys said distributors had reported the stickering tactics in California, Ohio, North Carolina, Virginia and Florida.

Miller Lite sales allegedly rose 13.2 percent by May 8 after the company launched an ad campaign last year saying it had half the carbs of Bud Light. Miller's motion said sales of Bud Light dropped 0.8 percent in the period.

Katz said the company's "Unleash the Dawgs" campaign, launched May 20, was designed to help company wholesalers prepare for the Memorial Day holiday.

Anheuser-Busch, the world's largest brewer, held 50 percent of the U.S. beer market last year. Miller, the world's second-largest brewer by volume, had 18 percent.