Anheuser-Busch Has Reportedly Offered $150 Million in ‘Relief’ to Distributors in Hopes of Keeping Bud Light on Shelves Amid Controversy

Anheuser-Busch is allegedly offering $150 million in relief funds to distributors.( Photo: AP Photo/Matt Slocum)

On Friday, the New York Post reported that according to Beer Marketer’s Insights, Anheuser-Busch is offering distributors financial incentives to continue pushing the Bud Light brand. This appears to be the latest attempt at damage control for the beer sold in those controversial blue cans.

It’s been a rough year for Bud Light, and by proxy its parent company, Anheuser-Busch. In April, Bud Light tapped a transgender influencer, Dylan Mulvaney, for a marketing campaign, which led to outrage among conservatives.

In short order, a series of bomb threats led to the evacuations of multiple Anheuser-Busch facilities, and right-wingers voiced their fury on the internet and social media platforms. An all-out beer-soaked culture war ensued when the brand’s former vice president of marketing, Alissa Heinerschild, called the beer brand’s former marketing strategy “fratty” and “out-of-touch,” according to the New York Post.

The brand’s fan base appeared to take this as a personal attack, which fueled the flames of outrage online. Musician Kid Rock even filmed a video of himself shooting a gun at cases of Bud Light.

But perhaps the most damaging response was the Bud Light boycott, which caused the brand to hemorrhage money. In June, the brand was dethroned as the most popular beer in America to Modelo despite Bud Light’s multiple efforts to backpedal after the campaign. Bud Light effectively severed all ties with Mulveney, and after a lot of hand-wringing, made the decision to lay off 400 employees at the end of July — the majority of whom were in marketing positions in corporate offices in New York and Los Angeles. This time, the boycott appears to have been effective.

In the latest attempt to keep Bud Light on shelves, the New York Post reported that Bud Light has offered up to $150 million in “relief” aid to its distributors this year.

Anheuser-Busch is apparently offering to reimburse distributors for freight and fuel costs, while shifting some accounts from Net 30, the industry standard, to Net 35.

In June, The New York Post reported that as part of the Bud Light Apology Tour — which did not involve apologizing to Mulvaney after unceremoniously dumping her — the brand offered financial assistance in the form of cold hard cash and sales incentive payments to its wholesalers and distributors. The brand launched a “market share recovery initiative,” as well but The New York Post reported that Anheuser-Busch did not go into the specifics of what the initiative may entail.

It’s difficult to judge the legality or ethics of this “initiative” without  the company providing transparency on the details.

The 3-Tier System of Alcohol Distribution and ‘Pay to Play’

The American beverage industry runs on a three-tier system. This tiers are the producer (Anheuser-Busch in this case), the distributor and finally the retailer, bar or restaurant that sells the product directly to the consumer.

There are numerous regulations both at a statewide and federal level to monitor the relationships between the three branches of this system, particularly between distributors and retailers.

The purpose for these regulations is primarily to ensure that wholesalers and distributors don’t influence the buyers at restaurants or stores as to what products they put on their shelves or menus. The aim in theory is buyers should be concerned about getting the best products in front of their customers, but unfortunately, in the world of big liquor, that’s not always how things shake out.

Prior to 2020, the topic of “pay-to-play” within the distribution world began to surface in media headlines after major distributor Southern Glazers was fined $3.5 million for charges of allegedly using these illegal tactics to grow its market share.

Wine Enthusiast reported in 2017 that the distribution giant agreed to settle after charges of providing “illegal gifts and services to businesses to influence their purchasing decisions.”

In March 2018, SevenFifty Daily shared that the TTB increased its enforcement budget so it could specifically go after distributors using these pay-to-play tactics, most commonly which involve credit card swipes at restaurants.

What Anheuser-Busch is offering its distributors and wholesalers is not necessarily illegal, per se, since the beer brand is a producer offering financial compensation to a wholesaler — not a retailer.

And yet, such incentives eerily echo these practices between distributors and retailers, especially since in 2016, Anheuser-Busch was fined $150,000 for implementing pay-to-play practices within the city of Seattle, according to Eater. The beer megabrand was also fined for allegedly using pay-to-play tactics in 2017 by the state of California, according to Thorn Brewing.

Regardless of the potential gray area, it appears competing brands are encroaching on Bud Light’s shelf space, and the beer brand is doing everything within its power to defend its market share.

The New York Post said it reached out to Anheuser-Busch for comment but the company has yet to respond.

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