Bud Light Maker Faces Backlash Over Ads From Workers This Time - Hindustan Times
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Bud Light Maker Faces Backlash Over Ads From Workers This Time

Bloomberg |
Feb 28, 2024 11:12 PM IST

The maker of Bud Light is receiving blowback for its advertising, as a deadline approaches for a major strike that could throw a wrench into US beer production ahead of the key summer drinking season.

(Bloomberg) -- The maker of Bud Light is receiving blowback for its advertising, as a deadline approaches for a major strike that could throw a wrench into US beer production ahead of the key summer drinking season.

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On the cusp of what would be the first work stoppage in nearly half a century at Anheuser-Busch InBev in the US by the International Brotherhood of Teamsters, the company has yet to strike a deal before its Feb. 29 deadline.

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Aside from standard grievances like wages and benefits, the union has also called out the company’s spending on marketing. Anheuser-Busch spent $3.5 billion in the first six months of 2023 — and during that period lost customers due to a promotion with a transgender influencer that backfired.

Since then, it’s spent even more on marketing deals in a battle to win back customers, and aired an ad celebrating its workers on X, the platform formerly known as Twitter, that rubbed some of them the wrong way. 

Some employees who saw it said Anheuser-Busch should prioritize investing in the workers by negotiating a stronger Teamsters contract, union spokeswoman Kara Deniz said.

“We’re looking at job security, and they’ve spent tens of millions of dollars on a couple of Super Bowl ads,” said Jeffrey Padellaro, a director for the Teamsters representing employees in the brewery, bakery, and soft drink industries.

Anheuser-Busch said it has a continuity plan in place to keep operating. It didn’t respond specifically to questions about the union criticizing its marketing spending. “Our top priority remains securing a contract that recognizes and rewards the talent, commitment and drive of our employees,” the company said in an e-mailed statement.

After union members voted to authorize a strike in December, the company aired three Super Bowl ads in a season where 30 seconds spot were estimated to cost $7 million each — starring the likes of Peyton Manning and Lionel Messi. Anheuser-Busch has also recently inked sponsorship deals with the Ultimate Fighting Championship and the International Olympic Committee.

Read More: UFC Signs Its Biggest-Ever Sponsorship Deal With Anheuser-Busch

“We have made advertising spending an issue,” Padellaro said of the company, which increased global marketing 13% in the first six months of last year over 2022’s spending.

Elsewhere, pressure has piled on Anheuser-Busch over Bud Light, which was the US’s most popular beer until April — when the now infamous promotion of the brand by transgender personality Dylan Mulvaney led to boycotts. The industry is also facing a decline in the volume of beer sales in America, with the rising popularity of hard seltzers and more young consumers choosing cannabis.

Investors sold off the company’s stock in the middle of last year, but the shares have since rebounded. Analysts have an average 12-month price target of $64.62, according to data collected by Bloomberg. The stock closed on Tuesday at $58.08.

First Since 1976

Now about 5,000 workers are prepared to strike at 12 breweries across the US, without a five-year contract that gives them better health care, job security and wages. If they walk off the job, it would mark the first Teamsters strike at Anheuser-Busch in the US since 1976, according to Deniz. As of Tuesday, the company hadn’t responded to the union’s request for a best and final offer, Deniz said.

Still, as summer approaches, it’s unclear if the company will be able to keep brewing in the event of a strike, Bloomberg Intelligence analyst Duncan Fox said. 

“Beer has a finite shelf life, so if there is a strike, retailers will buy another beer to fill the space,” Fox said.

Beer advertising has already been a point of contention in labor strife this year. At Molson Coors, the Teamsters went on strike this month at a brewery in Fort Worth, Texas, citing the company’s increased spending on marketing, even while it didn’t meet union demands on wages or benefits. 

Molson’s chief communications officer, Adam Collins, said the company respects the union’s right to strike, and has contingency plans. 

Molson also ran a Super Bowl ad — this one with LL Cool J.

--With assistance from Andy Hoffman.

(Updates with stock performance in 11th paragraph.)

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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