Posted by: David Kiley on June 16, 2005
Miller Brewing said it would run a new television spot this week called “The truth hurts”, in which it depicts Bud Light drinkers “startled to learn that Miller Lite has more taste”.
The ad is a reversal of trend. For the last few months, Miller has been laying off going after Anheuser-Busch’s Bud in ads. But as Miller has been gaining share, while beer sales in general decline while legions of consumers awaken to the notion that spirits and wine have more taste than either Miller of Anheuser products, Bud has been cutting prices, thus putting more pressure on Miller sales.
Besides the snarky direct attack ads, Miller will be cutting prices in repsonse to Bud. “Doug Brodman, senior vice-president for sales, said, “we initially underestimated A-B’s aggressiveness [when the began discounting at the start of the year], and were not able to move quickly enough to address their cuts”.
I guess everyone’s entitled to their taste in beer. But when I see two companies with products that are practically commodities in the way they are sold and taste, and they get into a price war at a time when costs are rising, I see a category with terrible upside for profit.