0:00

B-R-L-E-E-N.

0:04

At one point last summer, America's

0:06

favorite beer changed. Big

0:09

news in the big business of

0:11

beer tonight. America's top selling beer

0:13

is no longer American. This morning,

0:17

America has a new favorite beer, and

0:19

it's a Mexican import. This.

0:21

OK, Jack, the old king of

0:24

beers has been dethroned. Who is

0:26

the new king? Shocker coming up.

0:28

Modelo Especial is the new top

0:30

selling beer in America. Modelo Especial.

0:33

Like, everybody kind of figured. The

0:35

crisp Bud Light was replaced by the

0:37

fuller bodied and imported Modelo as the

0:40

top selling brew in the country. This

0:42

was owed in part to a customer

0:44

boycott of Bud Light for its campaign

0:47

with trans social media personality Dylan Mulvaney.

0:50

This month I celebrated my Day 365 of womanhood, and

0:53

Bud Light sent me possibly the best

0:55

gift ever, a can with my face

0:57

on it. Check out my Instagram story

0:59

to see. The whole episode was followed

1:01

by a counter backlash when the beer

1:03

company backtracked on its collaboration with the

1:05

star. But for those who've

1:08

been following the US beer market closely,

1:10

it was really only a matter of

1:12

time before Modelo Especial was going to

1:14

take over Bud Light's top spot. So

1:17

if the fiasco had not

1:19

happened, Modelo would have overtaken

1:21

Bud Light eventually, next year,

1:23

the year after. Ina

1:26

Verstul is one of those people closely following

1:28

the industry. She's a journalist in Munich covering

1:30

the business of beer. But

1:33

the boycott, the huge consumer boycott

1:35

just sped things up incredibly. And

1:37

so it happened in the summer, I think

1:39

it was May or June, in monthly

1:42

sales it overtook. And the

1:44

decline of Bud Light

1:46

has continued now into the autumn and

1:48

into the winter. Modelo is

1:50

just keeping up its

1:53

trajectory. So

1:56

the gap will widen unless AB

1:59

Invert. manages to persuade its

2:03

former consumers to return

2:05

to the brand. This

2:09

is The Closer. I'm Amy Keene. That

2:11

Medello knocked Bud Light from its perch is

2:14

about much more than a marketing U-turn. It's

2:16

a story about how the Department of Justice, and

2:19

one lawyer in particular, along

2:21

with a then little-known wine and spirits

2:23

company from upstate New York, threw

2:25

a wrench in a massive beer deal. We'll

2:27

be right back with that story. Hi,

2:34

everyone. It's Amy. Our friends at Harvard Business Review

2:36

have a podcast I think you'll like. It's

2:39

called HBR IdeaCast. Every

2:41

Tuesday, they bring you case studies

2:43

and conversations with the world's best

2:45

business and leadership experts to help

2:47

you manage up, manage a business,

2:50

and manage yourself. Listen

2:52

for free wherever you get your

2:54

podcasts. Just search HBR IdeaCast. It's

2:56

all you need to lead. The

2:59

Closer is brought to you by Progressive Insurance.

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rates not available in all states

3:34

or situations. Prices vary

3:36

based on how you buy. Ina

3:39

Verstel has spent much of her career

3:41

studying and writing about beer, both

3:44

the drink itself and the

3:46

economics of the business. And

3:48

my name already gives it away. I'm

3:50

a German national, but I grew up

3:53

in England. Why do you think

3:55

we should understand the business of beer? The

3:58

business of beer is very close. related

4:01

to market conditions, whether

4:03

you operate in a

4:05

monopoly, a duopoly

4:07

or if you have

4:09

an oligopoly. Depending

4:12

on the degree of concentration,

4:14

there's a different level of competition and

4:17

the more concentrated a market becomes,

4:20

the less competition there is. And

4:23

if one of the big players

4:26

raises prices, the competitor,

4:28

the big competitor also follows suit.

4:31

Then prices just go up and

4:33

consumers can't do anything but pay

4:36

for beer through their noses. And

4:38

I've got this very bloistly now because

4:40

I don't object to companies

4:42

making a profit. Let this

4:44

be understood. But still, I mean,

4:46

there is a degree of profitability

4:50

that is not beneficial

4:52

to consumers. For many years

4:54

in the US, there was one beer company

4:56

whose brands had a hold on the market,

4:58

Anheuser-Busch. And

5:01

they were very, very

5:03

clever and skillful operators

5:06

because they had managed to

5:08

hike the market share in

5:10

the US to close to 50% by

5:13

volume without doing any deals.

5:16

So over the decade, the

5:18

Department of Justice was very

5:22

off the old Anheuser-Busch market

5:24

position. But since they didn't do any

5:26

deals, they couldn't stop them from growing. And

5:30

then in 2008, it was taken

5:32

over by a company called Inbev, a company

5:34

that was itself the result of a series

5:36

of other deals. The newly

5:38

formed company went by AB Inbev.

5:41

The Department of Justice kept a

5:44

close eye on what they were doing. So

5:47

when they were taken over, they

5:49

controlled close to 50% of the

5:51

beer market already. And there

5:53

was only one competitor

5:55

at the time called Miller Cause.

5:58

And the two had close

6:00

to 80% of the market. A.B.

6:03

Inbev's most popular label, Bud Light.

6:06

For the great taste that won't fill you up and

6:08

never let you down, make it a Bud Light. Originally,

6:11

I mean that's going back

6:13

decades into the last century. The

6:16

main seller was Budweiser beer. Bud

6:18

Light. Bud Light. Bud

6:22

Light. Bud

6:25

Light. Bud Light. Bud

6:30

Light. But that had fallen out of favour

6:32

with Americans when the big

6:34

brewers launched these what they

6:36

call light beers in the

6:38

US. These beers that have

6:41

fewer calories than regular beers

6:44

like Budweiser. And the marketing

6:46

they also installed

6:49

played to

6:52

the idea of this is an all

6:54

American beer. Conveniently,

6:57

A.B. Inbev held a

6:59

stake in the maker of popular

7:01

imported beers. It's called Grupro Modello

7:03

from Mexico. This is

7:05

the company behind Corona, Modello Especial

7:07

and other brands. The

7:09

trouble was that the old

7:12

Anheuser-Busch had been had over

7:14

a barrel by Grupro Modello

7:16

in the 1990s. Grupro

7:18

Modello had been worried that with the

7:20

creation of NAFTA, the North American Free

7:22

Trade Agreement, Anheuser-Busch would be

7:25

able to flood the Mexican market with

7:27

brands like Budweiser and Bud Light. So

7:30

instead, they decide. We set

7:32

a stake to the old Anheuser-Busch, which

7:35

then would actually become something

7:37

like a non-aggression part. Crucially

7:40

though, for Grupro Modello, this stake

7:42

did not include any management control.

7:45

They were not necessarily in

7:48

the business for the love of beer.

7:50

They were businessmen above

7:53

all. And by 2012,

7:55

Anheuser-Busch was now A.B. Inbev and

7:57

it was looking to change this

7:59

arrangement. A, B, N,

8:01

B so that this is

8:03

no good. This is a very untenable

8:05

situation for us. For one, we

8:08

still have no management, because this is a

8:11

contract they inhabited from the

8:13

ultra-hoza bush. And we

8:15

can't lay our hands on

8:18

the import or export business of

8:21

Corona in the US. So they said,

8:23

okay, we're going to take over a group of a

8:25

deal and we have

8:28

control of Mexico, which was then

8:30

also a very profitable and growing

8:32

beer market. So Modilo in Mexico

8:35

itself was attractive, but they also

8:38

hoped that ultimately they

8:40

would be able to lay their hands on

8:43

the import business. The

8:45

two sides came to an agreement. AB

8:47

InBev would buy out the other half

8:49

of Grupo Modello, the price, $20 billion.

8:54

In corporate news, AB InBev is reportedly in talks to

8:56

buy the rest of Grupo Modello. It doesn't already have

8:58

any of the deals that could be won here. The

9:00

market likes the deal. Bitty Nantheiser Bush shares up almost

9:02

8% at all time

9:05

high. The deal expands what is

9:07

already the world's largest beer maker.

9:09

Beverage distributor. But there was another crucial

9:11

element to this deal. Buying up

9:13

all of Grupo Modello was probably going

9:15

to raise the antitrust alarm at the

9:17

Department of Justice. So AB

9:19

InBev and Grupo Modello concocted a side

9:21

deal. To sell its

9:24

products in the US, Grupo Modello had

9:26

formed a joint venture called Crown Imports.

9:29

And they did so with a wine

9:31

distributor called Constellation Brands. Modello

9:33

would sell its 50%

9:36

stake in the US

9:38

import business, which is called, or

9:40

which was called Crown Imports, to

9:43

Constellation for less

9:45

than $2 billion. The proposed

9:47

side deal gave Constellation Brands control

9:49

of the Grupo Modello beers in

9:51

the US, but with a catch.

9:55

But all they were given was

9:57

a 10-year supply

9:59

contract. And not

10:01

only would that have meant that if

10:04

AB InBev, as the new owner of Modelo,

10:06

had raised supply prices,

10:09

then Constellation

10:11

would have had to raise prices in the US

10:13

too. That side deal

10:15

that AB InBev and Grupo Modelo had

10:17

drawn up included one more important point.

10:21

That AB InBev would be able to buy

10:23

out Constellation at

10:26

the end of this 10-year term. You've

10:28

mentioned a few times now Constellation Brands, and I'd

10:30

love to just take a minute to actually explain

10:33

to listeners what this company was and how it

10:35

fit into the picture. Can you just

10:37

tell us about what the company was,

10:39

what it was known for, what it was like at the

10:41

time in 2012? Constellation

10:44

has a very interesting history.

10:49

It started out as a bulk

10:51

wine company in the 1940s already.

10:55

It was not terribly profitable,

10:59

especially when branded wines

11:01

and domain wines and

11:03

high-end brands were kind of

11:06

emerging in the 70s and 80s. And

11:10

the opportunity that

11:12

arose for them to really diversify away

11:14

from wine was in 1993, and

11:18

they could buy Spartan

11:20

beers from Chicago,

11:23

an importer, which was at the time

11:25

one of the two importers of Corona

11:27

in the US. So

11:30

in 2012, Constellation

11:33

was really at the

11:35

mercy of Modelo and

11:38

Anhoi Tabut, because they did

11:40

the primary deal and what

11:42

would become of them was a secondary

11:45

concern. So

11:47

just to make sure we see, it almost feels

11:49

a bit like a love triangle here of three

11:52

drinks companies, AB InBev

11:54

in 2012 already has

11:56

a stake in Grupo

11:58

Modella, Mexico's Grupo Modella. They

12:00

decide now is the time we have

12:03

to take over entirely, but in order

12:05

to, or as part of this deal,

12:07

they arrange a side

12:09

deal with Constellation Brands who has

12:11

the ability to sell Groupo Modelo

12:14

within the US. As

12:16

part of this deal, AB InBev says to

12:18

Constellation Brands, you will continue selling for 10

12:20

years and then we will get the

12:22

rights to that part of the business. Is that correct?

12:25

Yes, that's correct. And

12:29

at the time when the original deal

12:31

was published, I thought, how

12:33

could Constellation really agree to

12:35

such unfavourable terms?

12:38

I mean, call me suspicious minded.

12:41

My suspicion was at the

12:43

time that Constellation

12:45

hoped or, if

12:48

there were reckless, trusted the

12:50

Department of Justice to step in

12:52

and tear up the proposed agreement

12:55

altogether. And

12:57

in early 2013, that's just what

12:59

the Justice Department did, which took

13:01

AB InBev by surprise. Apparently,

13:05

AB InBev had been persuaded by

13:07

its own legal team, these

13:11

hired legal gangs, as you like

13:13

to put it in America, that

13:15

the deal that they had initially

13:20

submitted would be greenlighted

13:22

by the Department of Justice. And

13:24

I thought, they must be

13:26

mad. How

13:30

could they believe in

13:32

their wildest dreams that

13:34

this deal would go through? There

13:36

was one Department of Justice official leading the

13:38

charge in these beer wars. It

13:40

was a lawyer by the name of Bill Baer. And

13:43

I spoke to Mr. Baer a few weeks ago, and

13:46

I said to him, hello. Since

13:49

the 1990s, I have been

13:52

looking at academic literature on

13:54

the American beer industry. And

13:58

academics for 30 years. years,

14:00

I mean since the 1990s, have

14:03

been saying concentration is

14:05

too high and means

14:07

competition is too low. And

14:10

when they say competition is too low, it's

14:13

to the detriment of consumers. And

14:15

of course, but if you're a group of

14:17

justice people, they would have been

14:20

looking at the proposed transaction and

14:22

would have said,

14:25

no, this is not going to

14:27

fly. And they were fortunate that

14:29

Mr. Baer had just taken over

14:32

the anti-trust division at the Department

14:34

of Justice in 2013. He said,

14:36

this deal is a non-starter, guys.

14:40

There is himself an interesting character in

14:42

this story. For

14:45

one, the financial press has noted his

14:47

own apparent love for beer and

14:50

American beer at that. But Ina, who

14:52

recently spoke to him about this deal,

14:54

says he was much more focused on

14:57

competition in his beloved US beer market

14:59

than anything. He seems

15:01

very sociable and very approachable.

15:03

And he's not talking legalese.

15:06

So he does not mince words. And

15:09

so he's very straight talking, don't tell me.

15:12

I asked him, can you explain

15:14

to me what the meeting was like? And

15:17

he said, the first meeting when they all

15:19

met and he said to me, yeah, it

15:21

was just funny. It

15:23

was a room full of lawyers, probably

15:25

40 lawyers altogether. And they

15:28

were all talking legalese.

15:30

So no drama, no shouting, none

15:32

of the Chile

15:34

and Novella stuff. But it was still

15:36

dramatic because AB InBev's legal team told

15:39

him the deal is good and it's

15:41

sound. It's not to the detriment of

15:43

consumers. And we have made sure of

15:45

this and that and that. And

15:48

Mr. Bear just retorted and said

15:50

this deal is a non-starter and that took

15:53

them aback. What

15:56

Bear wanted for the US beer market was

15:58

an independent third party. A third

16:00

company. And with the

16:03

modellos out of the picture, there

16:05

would have been no third player because if

16:08

the original deal had gone through, consolation

16:11

would have been reduced to

16:13

an importer again. And

16:15

this time as the importer of

16:18

another rough-playing global

16:21

heavyweight called Avian. And

16:24

he said this is not good to consumers.

16:26

And the legal team was taken aback and

16:28

they said, can you please adjourn it for

16:31

a week? And so they met again one

16:33

week later and maybe Inberg had

16:35

brought along its CEO, Hal

16:37

Spritov. And this

16:52

is not good enough. And then they

16:54

challenged him and said, well, if you

16:57

don't want to greenlight

16:59

this deal, sue us then. And

17:02

he said, I will. Trust me.

17:06

Meantime, a big beer battle is brewing. A

17:09

battle over beer is brewing. We

17:11

begin with the beer battle brewing, the Justice

17:13

Department today suing to block the 20

17:16

billion dollar merger between Anheuser-Busch

17:18

Inbev and Mexican brewer, Medello.

17:21

Using company documents to bolster their case,

17:23

Justice Department lawyers say the deal will

17:25

lead to higher prices for popular beers

17:27

like Budweiser and Corona. Bear

17:29

published the DOJ's position in a nearly 300

17:32

page publicly available document.

17:35

It gave you very precise market data.

17:39

The complaint quotes from

17:42

internal communications amongst

17:44

all the big players in the

17:46

industry. So I had never seen

17:48

anything so precise and comprehensive before

17:51

in my life. Here's

17:53

Bill Bear in a recent interview with the Wall

17:55

Street Journal about the deal. We

17:57

said you need Inbev to... completely

18:00

divest any interest in Modelo as

18:03

it relates to the United States.

18:06

They thought I was crazy. Is

18:09

there a line or a section that you

18:11

still remember to this day that really jumped

18:14

out at you as you were reviewing the suit

18:16

published to the web? What

18:19

I found interesting in that

18:21

suit was that they kind

18:23

of admitted the other players

18:26

quoted in that complaint that

18:28

they always followed each other's price

18:30

hikes. Not regularly, not

18:32

always, but often. I think

18:34

the term that appears

18:37

in the complaint is often.

18:39

And I thought, yeah, this is what

18:41

I had noticed too as a

18:43

consumer. They were

18:46

very clued up about what went

18:48

on in the US beer market. The

18:51

lawsuit alleged that the big domestic US

18:53

brands had been following each other's price

18:55

increases for years. That means

18:57

that if one raises prices, the

19:00

other will also raise prices. Meanwhile,

19:02

the imported Modelo brands kept the

19:05

prices steady. This meant that

19:07

over time there wasn't much of a

19:09

price difference between the domestic American beers

19:11

and the imported Modelo beers. So

19:15

basically people will not have to

19:17

look for cheaper options because

19:19

they are all at about

19:21

the same level. So no competition,

19:23

no one is expanding market

19:26

shares because they don't take share away from each

19:28

other. And by making the

19:30

evidence in his lawsuit public, Bear was

19:32

trying to show how the lack of

19:34

competition in the beer business actually affected

19:36

customers. And I asked Mr

19:38

Bear, why did you put this art into the

19:40

public domain? Why did you put all this, I

19:43

mean, I would consider, confidential data

19:46

into this complaint. He said, well, I wanted

19:48

to make AB in their free land. That

19:50

was his word, re-land. And

19:53

I thought, OK, in my terminology, there

19:56

would have been you were

19:58

out to name and shame them. And

20:00

it had the desired effect

20:03

because the Department of Justice already had

20:05

a plan of a settlement.

20:08

A settlement that would change the U.S. beer

20:10

market and create a path

20:13

for an imported label to become

20:15

America's favorite. We'll

20:18

be right back. Hey

20:21

everybody, it's Amy. I want to tell you about

20:23

the Closer Newsletter. It's written by

20:25

our producer and long-time financial journalist Ben

20:27

Walsh. What I love about the newsletter is

20:29

that Ben helps you understand the deals and

20:31

deal makers making headlines right now. He

20:34

explains why they matter and where things are

20:36

headed. So if you want to

20:38

follow Closers in the News and get concise analysis

20:40

of the biggest deal stories delivered

20:43

right to your inbox, sign up for the

20:45

newsletter at thecloser.fm. In

20:51

early 2013, the U.S. Department of Justice had

20:53

set the stage for a showdown in the

20:55

U.S. beer market In

20:57

a long and detailed filing, DOJ lawyer

20:59

Bill Baer laid out his assessment of

21:01

what would happen to U.S. beer customers

21:04

if AB InBev were to fully take

21:06

over Mexico's group of Modelo. They

21:09

knew what they wanted the ultimate

21:11

deal to look like because they wanted

21:14

constellations to

21:16

become independent, economically viable,

21:19

and not at the mercy of

21:22

AB InBev. But that meant that

21:26

constellations needed a brewery

21:28

in Mexico to be

21:30

really independent from any supply contract

21:34

with AB InBev. Constellations

21:36

being Constellations Brands, that company that was

21:38

supposed to have the U.S. import rights

21:40

for group of Modelo products for a

21:43

mere 10 years as part of AB

21:45

InBev's takeover plans. So

21:47

the department said constellations

21:50

must get Modelo's

21:52

swishest brewery in Mexico

21:55

and constellations must be given

21:58

time to AB InBev. exchange

22:00

brewery. It's

22:02

actually setting the up or setting

22:04

the consternation up as an

22:07

independent brewer. Mr.

22:09

Baer managed to actually

22:12

expand the U.S. beer duopoly

22:14

into a oligopoly

22:17

with three powerful players.

22:19

So the DOJ first steps in, I

22:22

think it's January of 2013, and just a few months

22:25

later by April, news breaks I

22:27

think late one Friday that AB

22:29

Inbev have reached an agreement with

22:31

the Department of Justice to let

22:33

their deal through. Anheuser-Busch Inbev is

22:35

closer to putting its $20 billion

22:38

acquisition of Grupo Modelo in the

22:40

can. AB Inbev worked out

22:42

a deal with the government. The

22:44

settlement looked like this.

22:47

The U.S. government would let

22:49

AB Inbev's takeover of Grupo Modelo

22:51

go through, provided the

22:53

company's less Modelo's U.S. business

22:55

to constellations brands. This

22:57

included the licenses of Grupo Modelo's beer

22:59

brands and that brewery in Mexico. So

23:04

the one who had to actually do the

23:06

most agreeing was AB Inbev because

23:08

they saw

23:11

their original proposal threaded,

23:14

saunted pieces. So

23:18

they had to give that brewery

23:20

in Mexico to constellations.

23:23

Constellations were allowed to buy

23:25

out the whole import

23:28

business in perpetuity. And

23:31

they would also obtain the rights

23:33

to the brands in perpetuity. So

23:36

that was far more than the

23:39

original proposal would have awarded

23:42

to constellations. The

23:46

price tag for the settlement is

23:48

the price tag. So Constellations brands

23:50

picks up Grupo Modelo as part

23:52

of the settlement for less than

23:54

$5 billion. That seems an awfully

23:56

small price for Constellations to pay.

24:00

Yeah, and only one leekie because

24:02

they were the only buyer around.

24:05

And if you are the only buyer around, the

24:08

profit multiple that usually

24:10

applies is far lower than

24:12

if there had been a string

24:14

of buyers wanting to buy that

24:18

business. So they got a very

24:21

good deal. A very good

24:23

deal, which instantly made them the third largest

24:25

beer supplier in the country. So

24:28

once the deals finalize, what

24:30

happens with consolation now being such a big

24:32

US beer supplier? How

24:34

does the picture shift with

24:37

the conclusion of the settlement? What

24:39

consolation chose to do was to continue

24:41

with its aggressive pricing. And

24:44

that meant that

24:46

both of the leading

24:48

brands, I mean, the super leader was Corona

24:52

extra at the time, but

24:54

Modello, especially, was already catching

24:56

up nicely. So by keeping those

24:58

prices not low, the

25:01

proper term is by closing the

25:03

price gap between those import brands

25:05

and Bud Light, people

25:07

traded up to Modello because they

25:09

said, OK, I want something nicer,

25:12

something special. And

25:14

it's only a little bit

25:16

more expensive than Bud Light. So that

25:19

pricing strategy alone worked

25:22

in constellations favor. But they

25:24

also did very clever things

25:27

with the brands. Those

25:30

clever things include marketing like

25:32

launching Modello Especial advertising in

25:34

English for the first time. In

25:37

1925, we created a model

25:39

beer, a full flavored Mexican

25:41

lager, appropriately named Modello

25:43

Especial. While

25:46

Corona continued to be an American

25:48

favorite, Modello Especial caught on with

25:50

American customers. Modello

25:55

is another interesting

25:57

packaging because the bottle looks

25:59

really It's

26:02

still wrapped in this gold foil, something

26:06

we in the rest of the

26:08

world would have gotten rid of already

26:10

because it's environmentally so unsound. Sorry, yes.

26:13

Yeah, of course, of course. This is

26:15

the perspective, I'll give you, but I mean, they stuck to it.

26:19

I mean, this is how it was marketed. And

26:22

of course, the gold foil is to represent

26:24

a, this is something better. This

26:26

is something high end. This

26:29

is really brilliant quality because we don't

26:31

stint on the packaging even. So

26:34

the beers are, now I try

26:36

to be polite, inoffensive. I

26:39

mean, they are excellent at

26:41

what they aim to be. They

26:45

are not really beers that are

26:47

in your face. So they

26:50

are very agreeable, easy to

26:52

drink beers that look

26:54

different and

26:56

are called something different. So

27:01

that made them easy to stick

27:03

out both of these beers. I

27:05

think we have to actually acknowledge the

27:07

role Corona has played here too. A

27:10

Corona in palm trees, a

27:14

Corona in calm seas. Because

27:17

Corona led the way or barged

27:19

ahead and Modilo could

27:21

follow. And

27:24

the settlement was signed

27:26

in 2013. The

27:28

Modilo brand was not available in all

27:31

US states. Because

27:34

I mean, this is what the Mexicans had

27:36

done together with Constellation. They

27:39

cautiously pushed this

27:42

brand state by state

27:45

into the country. It

27:48

became desirable by not being

27:50

available in all states initially.

27:53

So that's a very clever strategy. And

27:55

I think what they also did was, they

27:58

did not choose. in

28:01

American imagery for

28:04

the brand. I mean, it's still a

28:06

Mexican brand. I mean, that's as

28:09

Spanish sounding as it is. They

28:12

said, okay, we need to find

28:15

values and an imagery for this

28:17

brand that appeals to everybody that

28:20

all consumers can relate to. And

28:22

that's the fighting spirit. You

28:24

are fine. This is your reward.

28:26

And so by 2023, Medello

28:31

was on course to take over Bud Light as

28:33

the best selling beer in the U.S. before too

28:36

long. Then came Bud

28:38

Light's marketing mishap. The partnership between

28:40

Bud Light and transgender activist Dylan

28:42

Mulvaney is getting a lot of

28:44

backlash. Bud Light's fall comes after the

28:46

company picked transgender influencer Dylan

28:48

Mulvaney to promote Bud Light and created

28:50

a customized Bud Light can for Mulvaney.

28:55

Conservatives called for a boycott of Bud Light.

28:58

Bud Light sales were down more than 24%

29:02

compared to a year ago for the week

29:05

ending June 3rd. Actually, that's been pretty steady

29:07

since his controversy first broke heading sales, turning

29:09

investors. And

29:11

the Mexican import took over sooner than

29:13

expected. So if the fiasco

29:16

had not happened, Medello

29:18

would have overtaken Bud Light eventually,

29:20

next year, the year after. But

29:23

the boycott, the huge consumer boycott

29:26

just sped things up incredibly.

29:29

It's been a little more than 10 years now since

29:32

the settlement was agreed. You'll recall

29:34

the original proposed AB InBev deal included

29:37

getting back the rights to the

29:39

Modella brands in the U.S. after

29:41

10 years. But instead, thanks to

29:43

that settlement, the U.S. beer market

29:45

has been reshaped, and those U.S.

29:47

rights still belong to consolation brands.

29:51

Is there a deal-making lesson in the story

29:54

here somewhere? Uh,

29:57

in the U.S. never underestimate the Department

29:59

of Justice. That's a

30:01

good one. It could

30:03

be an expensive mistake to

30:05

underestimate the department of justice.

30:08

My last question for you, Ina, is a personal one. Completely

30:10

outside of the brands we've discussed today, what beer

30:12

do you like to drink? Always

30:16

a local beer, wherever I am, because

30:18

that's freshest. Freshest? And I guess

30:20

it gives you a sense of the local market.

30:22

That's me. That's

30:27

our episode for this week. But there's much more for my conversation with

30:29

Ina for Brazen Plus subscribers on Apple P The

30:36

closer is a production of Project Brazen

30:39

in partnership with PRX. Our show is

30:41

praised by Isabel Kirby McGowan, Trina

30:43

Menino, and Anna Muto. Van

30:45

Walsh is our reporter, Maran Hell-Gonzalez is

30:47

our project manager, and Lucy Woods is

30:50

head of research. Megan

30:52

Dean is programming manager, and Ryan Ho is

30:54

design lead. Golda

30:56

Arthur is our showrunner, and Bradley Hope

30:58

and Tom Wright are executive producers.

31:01

Our marketing consultant is Maggie Taylor, and

31:03

I'm Amy Keene. Thanks for listening.

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