TYPES OF INFLATION THAT SOCIALISTS WILL NEVER TAKE RESPONSIBILITY FOR
Degradation of the quality and quantity of products as companies try to stay in business
AB InBev Overstates Alcohol in Budweiser, Lawsuit Claims
By Sophia Pearson - Feb 26, 2013
Anheuser-Busch InBev NV (ABI), the world’s biggest brewer, was sued by
consumers in three U.S. states for allegedly overstating the alcohol
content in its Budweiser beer.
AB InBev’s St. Louis-based Anheuser-Busch Cos. routinely adds extra
water to its finished products to produce malt beverages with
significantly less alcohol content than displayed on its labels,
violating state statutes on consumer protection, according to a
complaint filed yesterday in federal court in Philadelphia. Similar
lawsuits were filed in federal courts in New Jersey and San Francisco.
“AB’s customers are overcharged for watered-down beer and AB is
unjustly enriched by the additional volume it can sell,” Thomas and
Gerald Greenberg said in the Philadelphia complaint.
AB InBev, the maker of Budweiser and Stella Artois, controls 39 percent
of the U.S. beer market. The company is seeking government approval to
buy the rest of Grupo Modelo SAB, Mexico’s largest beermaker, for $20.1
billion. The Modelo brands account for 7 percent of the U.S. market. AB
InBev shipped 98.5 million barrels in the U.S. in 2011, according to
Beer Marketer’s Insights.
The claims against Anheuser-Busch are “completely false,” Peter
Kraemer, the company’s vice president of brewing and supply, said in an
“Our beers are in full compliance with all alcohol labeling laws,”
Kraemer said. “We proudly adhere to the highest standards in brewing
our beers, which have made them the best-selling in the U.S. and the
Budweiser, the No. 3 beer in the U.S. in 2011, was introduced in 1876
when company founder Adolphus Busch set out to create a national beer
brand, according to the Anheuser-Busch website. Each batch of the beer,
which blends American aroma hops with barley malts and rice, follows
the same family recipe used by five generations of brewmasters,
according to the website.
The complaints accuse the AB InBev unit of also mislabeling the amount
of alcohol in Bud Ice, Bud Light Platinum, Michelob, King Cobra, Busch
Ice, Black Crown, Bud Light Lime, Hurricane High Gravity Lager, Natural
Ice and Michelob Ultra.
Josh Boxer, an attorney for plaintiffs in California, said additional
lawsuits will be filed against the company in Ohio and Colorado. The
California complaint, filed by Sonoma County residents Nina Giampaoli
and John Elbert, seek to represent consumers in the state and consumers
nationwide who have purchased AB InBev products in the past five years.
All three complaints seek damages exceeding $5 million.
Total damages “could be quite significant based on the volume of products that AB produces a year,” Boxer said.
It’s unclear in the complaints how the plaintiffs determined the
alcohol content was less than stated. Boxer said the complaints are
based on information from former workers at some of the company’s 13
“On information and belief this is a corporate policy of AB to
intentionally short the alcohol content,” Boxer said in a phone
interview. “We believe this is a corporate policy that comes from AB
InBev and trickles down.”
The Greenbergs said they routinely purchased as many as four cases of
Budweiser a month during the past four years, with the contents labeled
as having an alcohol content of 5 percent by volume, according to the
Giampaoli regularly purchased one six-pack of Budweiser a week during
the past four years, according to that complaint filed Feb. 22. Brian
Wilson, who is suing Anheuser-Busch in federal court in New Jersey,
purchased one case of Michelob Ultra per month. The label stated the
beer contained 4.2 percent alcohol by volume, according to his
complaint filed yesterday.
AB InBev allegedly keeps the alcohol level for each batch of malt
beverage at specifications above the desired final product at least
initially then adds water and CO2 to the final stage of the brewing
process, according to the complaint.
The company began using in-line alcohol measuring instruments known as
Anton Paar meters that can measure the alcohol content in malt
beverages to within hundredths of one percent, according to the
complaint. AB allegedly uses the precision technology to shave the
alcohol content instead providing consumers with a product based on the
stated label, the Greenbergs said in the complaint.
Adding water to the brewing process cuts the stated alcohol content by 3 to 8 percent, Boxer said.
In addition to damages, the lawsuits are seeking a court order
requiring Anheuser-Busch to fund a “corrective advertising campaign” to
remedy its allegedly illegal conduct.
The case is Greenberg v. Anheuser-Busch Cos LLC, 13- cv-01016, U.S.
District Court, Eastern District of Pennsylvania (Philadelphia).
Food Inflation Kept Hidden in Tinier Bags
By STEPHANIE CLIFFORD and CATHERINE RAMPELL
The New York Times
Published: March 28, 2011
Chips are disappearing from bags, candy from boxes and vegetables from cans.
As an expected increase in the cost of raw materials looms for late
summer, consumers are beginning to encounter shrinking food packages.
With unemployment still high, companies in recent months have tried to
camouflage price increases by selling their products in tiny and tinier
packages. So far, the changes are most visible at the grocery store,
where shoppers are paying the same amount, but getting less.
For Lisa Stauber, stretching her budget to feed her nine children in
Houston often requires careful monitoring at the store. Recently, when
she cooked her usual three boxes of pasta for a big family dinner, she
was surprised by a smaller yield, and she began to suspect something
“Whole wheat pasta had gone from 16 ounces to 13.25 ounces,” she said.
“I bought three boxes and it wasn’t enough — that was a little
embarrassing. I bought the same amount I always buy, I just didn’t
realize it, because who reads the sizes all the time?”
Ms. Stauber, 33, said she began inspecting her other purchases, aisle
by aisle. Many canned vegetables dropped to 13 or 14 ounces from 16;
boxes of baby wipes went to 72 from 80; and sugar was stacked in
4-pound, not 5-pound, bags, she said.
Five or so years ago, Ms. Stauber bought 16-ounce cans of corn. Then
they were 15.5 ounces, then 14.5 ounces, and the size is still
dropping. “The first time I’ve ever seen an 11-ounce can of corn at the
store was about three weeks ago, and I was just floored,” she said.
“It’s sneaky, because they figure people won’t know.”
In every economic downturn in the last few decades, companies have
reduced the size of some products, disguising price increases and
avoiding comparisons on same-size packages, before and after an
increase. Each time, the marketing campaigns are coy; this time, the
smaller versions are “greener” (packages good for the environment) or
more “portable” (little carry bags for the takeout lifestyle) or
“healthier” (fewer calories).
Where companies cannot change sizes — as in clothing or appliances —
they have warned that prices will be going up, as the costs of cotton,
energy, grain and other raw materials are rising.
“Consumers are generally more sensitive to changes in prices than to
changes in quantity,” John T. Gourville, a marketing professor at
Harvard Business School, said. “And companies try to do it in such a
way that you don’t notice, maybe keeping the height and width the same,
but changing the depth so the silhouette of the package on the shelf
looks the same. Or sometimes they add more air to the chips bag or a
scoop in the bottom of the peanut butter jar so it looks the same size.”
Thomas J. Alexander, a finance professor at Northwood University, said
that businesses had little choice these days when faced with increases
in the costs of their raw goods. “Companies only have pricing power
when wages are also increasing, and we’re not seeing that right now
because of the high unemployment,” he said.
Most companies reduce products quietly, hoping consumers are not reading labels too closely.
But the downsizing keeps occurring. A can of Chicken of the Sea
albacore tuna is now packed at 5 ounces, instead of the 6-ounce version
still on some shelves, and in some cases, the 5-ounce can costs more
than the larger one. Bags of Doritos, Tostitos and Fritos now hold 20
percent fewer chips than in 2009, though a spokesman said those extra
chips were just a “limited time” offer.
Trying to keep customers from feeling cheated, some companies are
introducing new containers that, they say, have terrific advantages —
and just happen to contain less product.
Kraft is introducing “Fresh Stacks” packages for its Nabisco Premium
saltines and Honey Maid graham crackers. Each has about 15 percent
fewer crackers than the standard boxes, but the price has not changed.
Kraft says that because the Fresh Stacks include more sleeves of
crackers, they are more portable and “the packaging format offers the
benefit of added freshness,” said Basil T. Maglaris, a Kraft spokesman,
in an e-mail.
And Procter & Gamble is expanding its “Future Friendly” products,
which it promotes as using at least 15 percent less energy, water or
packaging than the standard ones.
“They are more environmentally friendly, that’s true — but they’re also
smaller,” said Paula Rosenblum, managing partner for retail systems
research at Focus.com, an online specialist network. “They announce it
as great new packaging, and in fact what it is is smaller packaging,
smaller amounts of the product,” she said.
Or marketers design a new shape and size altogether, complicating any
effort to comparison shop. The unwrapped Reese’s Minis, which were
introduced in February, are smaller than the foil-wrapped Miniatures.
They are also more expensive — $0.57 an ounce at FreshDirect, versus
$0.37 an ounce for the individually wrapped.
At H. J. Heinz, prices on ketchup, condiments, sauces and Ore-Ida
products have already gone up, and the company is selling
smaller-than-usual versions of condiments, like 5-ounce bottles of
items like Heinz 57 Sauce sold at places like Dollar General.
“I have never regretted raising prices in the face of significant cost
pressures, since we can always course-correct if the outcome is not as
we expected,” Heinz’s chairman and chief executive, William R. Johnson,
said last month.
While companies have long adjusted package sizes to appeal to changing
tastes, from supersizes to 100-calorie packs, the recession drove a lot
of corporations to think small. The standard size for Edy’s ice cream
went from 2 liters to 1.5 in 2008. And Tropicana shifted to a 59-ounce
carton rather than a 64-ounce one last year, after the cost of oranges
With prices for energy and for raw materials like corn, cotton and
sugar creeping up and expected to surge later this year, companies are
barely bothering to cover up the shrinking packs.
“Typically, the product manufacturers are doing this slightly ahead of
the perceived inflationary issues,” Ms. Rosenblum said. “Lately, it
hasn’t been subtle — I mean, they’ve been shrinking by noticeable
That can work to a company’s benefit. In the culture of thinness,
smaller may be a selling point. It lets retailers honestly claim, for
example, that a snack package contains fewer calories — without having
to change the ingredients a smidge.
“For indulgences like ice cream, chocolate and potato chips, consumers
may say ‘I don’t mind getting a little bit less because I shouldn’t be
consuming so much anyway,’ ” said Professor Gourville. “That’s a harder
argument to make with something like diapers or orange juice.”
But even while companies blame the recession for smaller packages, they rarely increase sizes in good times, he said.
He traced the shrinking package trends to the late 1980s, when
companies like Chock full o’ Nuts downsized the one-pound tin of ground
coffee to 13 ounces. That shocked consumers, for whom a pound of coffee
had been as standard a purchase unit as a dozen eggs or a six-pack of
beer, he said.
Once the economy rebounds, he said, a new “jumbo” size product
typically emerges, at an even higher cost per ounce. Then the gradual
shrinking process of all package sizes begins anew, he said.
“It’s a continuous cycle, where at some point the smallest package
offered becomes so small that perhaps they’re phased out and replaced
by the medium-size package, which has been shrunk down,” he said.
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