Would you like some beer with your water?Posted: March 29, 2013
Last month news broke that Anheuser-Busch InBev is facing two big law suits. The more sensational suit is a class-action that alleges that they have been watering down their beers. Specifically, they are accused of adding water directly before bottling, reducing the alcohol percentage of several of their brands below the level stated on the labels. The reduction is claimed to be as high as 8%. (That is, 8% of 5%. So less than half of a percent. Numbers sure are nifty that way.)
As I mentioned in a recent post, class-actions are basically scams. The only people who get very positive results are the attorneys; successful plaintiffs generally get paid in coupons. My other beef with them is the math used to calculate damages. The plaintiffs in this case want the court to award $5 million in damages for AB InBev selling them 4.7% beer with a label that says 5%. How in the world is that worth $5 million in damages? Don’t get me wrong; if they are actually selling a product that is not consistent with the label, that is both wrong and illegal and they should be punished. And if InBev made an additional $5 million by filling more cans with less beer, they have no right to that money. But I just can’t imagine a scenario where I could stand in front of a judge and say under oath, “The difference between the label and the product was enough to cause me material damages on the order of 6-figures. But the product was not bad enough for me to just buy a different beer. Because, seriously, I bought a six-pack of Budweiser every week for the past four years, even after I had found that I was dissatisfied with the product.”
What makes this case even more suspect is the fact that adding water immediately before bottling is totally standard practice and is in no way improper. They brew the beer slightly strong to begin with and then add water to get the alcohol level to the exact level they want. NPR decided to test some of the beers for themselves and found every one tested to be “well within federal limits” of their labeled alcohol content.
The second law suit is an anti-trust suit. The feds are trying to prevent AB InBev from purchasing Modelo, brewers of Corona. The logic of the suit is that the acquisition would create a giant company capable of obstructing the free market and causing price increases. As much as I love the idea of protecting the free market, the claims just don’t seem to make much sense to me. AB InBev is already a giant company. But they have been losing ground to smaller brewers for years now. Adding a few more macro-brews to their portfolio isn’t going to grant them a stranglehold on the market. If they attempted to raise prices across their newly acquired lines, that would only make it easier for other breweries to gain market-share just by keeping their prices the same. If anything, I’d expect prices to drop as the company consolidates production and streamlines distribution. It seems likely to me that AB InBev just didn’t make the right campaign contributions to make this deal go through smoothly.
Beer of the Week: Cafri – Until these law suits are sorted out (or until I forget,) I am boycotting AB InBev and Modelo beers. So this week’s beer is an unaffiliated, Corona-like brew from Korea. And, for what it is, it isn’t bad. Cafri is clear and smooth. It certainly does not have much flavor at all, but what is there is not at all offensive. It is more than adequate as a Corona substitute and was at one point my go-to cheap Korean beer.
Reading of the week: The Code of Hammurabi, Selections – The oldest extant written code of law seems primitive in some respects; there are regulations about how and when family members can be sold into slavery and under what conditions rape victims should be executed. But there are also some “progressive” laws; there are minimum wage requirements and laws that relieve debtors in the event that their crops are destroyed by acts of god. Also, there is a law against overcharging for beer. The penalty (rightfully) is death by drowning. Not in beer, in the river.
Question of the week: Under The Code of Hammurabi, a judge whose decision is later shown to have been made in error is permanently removed from the bench and forced to pay back the fine he imposed 12-fold. Would the American judicial system be better if judges whose decisions were overturned on appeal were forced to retire?