Is Budweiser Lawsuit About More Than Alcohol?

Beer drinkers have filed a lawsuit against none other than the "king of beers," Budweiser and its parent company Anheuser-Busch.

The claim? Drinkers are accusing the company of watering down beers like Budweiser and Michelob and mislabeling the bottles. Consumers think the bottles contain less than the 5% or less alcohol by volume listed on most beer labels.

To back up their claims, plaintiffs say former employees at the brewery have provided information indicating that beers were watered down. But does that warrant legal action?

If the allegation has merit, it probably does, since misleading customers isn't allowed under the FTC's requirements.

Businesses can't engage in misleading advertising or other deceptive practices. That includes mislabeling products, either intentionally or unintentionally. If the alcohol content is less than what is listed, that could be a problem.

It's not just a federal requirement either. Most states have laws that prohibit misleading business practices as well.

But it's not clear that Anheuser-Busch, which merged with international alcohol producer InBev in 2008, is mislabeling the product, reports the Los Angeles Times.

Former employees reported to plaintiffs that Budweiser and other beers have been watered down as part of corporate practice. That allegedly results in alcohol content lower than the stated amounts.

But the plaintiffs haven't independently tested any of the beers they claim have misleading labels. Anheuser-Busch has called the claim groundless.

It is possible that the beer could be watered down, yet still in compliance with labeling laws. After all, "watering down" can refer to alcohol or flavor.

While no plaintiff has come out and said it, it seems that a bigger issue here is trust. None of the plaintiffs trust that Anheuser-Busch is still making a quality product.

Is that a legal concern? Not exactly, but if trust is the underlying issue here, then it's costing the company more than just sales.

Truth in advertising is a legal requirement but it's based on a good corporate policy: You need to earn and keep customer trust. Anheuser-Busch may be paying the price on that lesson, but you don't have to.

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Related Resources:

• Could Lawsuit Halt Bud's Turnaround? (CNBC)
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• Legal to Label Your Business 'Sustainable'? (FindLaw's Free Enterprise)