Bud Light brewer will distribute a $1 billion settlement following backlash over transgender issues.
The parent company of Budweiser and Corona, AB InBev, is set to distribute $1 billion (£824 million) to its shareholders in an effort to rebuild trust following a wave of criticism related to transgender issues.
AB InBev, recognized as one of the largest brewing companies globally, has committed to a share repurchase program—the first of its kind in the company’s history—coinciding with the announcement of a 13.5% decrease in U.S. sales.
The backlash stems from a boycott of Bud Light, initiated in response to the brand’s promotional partnership with transgender influencer Dylan Mulvaney. Earlier in the year, Bud Light celebrated Mulvaney’s first year of transitioning by sending her a customized beer can, a gesture that ignited controversy and led to boycotts, predominantly from conservative circles in the United States. Critics accused the brewing giant of endorsing a left-leaning political stance.
High-profile conservatives, including rapper Kid Rock, publicly expressed their disapproval, with Kid Rock even sharing a video where he is seen shooting at a pack of Bud Light beer with an assault rifle.
The beer sales in the U.S. have experienced a significant drop, leading to a nearly 10% decrease in AB InBev’s stock value following the controversy.
During the summer, Modelo Especial, a Mexican beer brand, surpassed Bud Light in sales, becoming the top-selling beer in the U.S.
The announcement of the share repurchase program, aimed at compensating investors by acquiring their shares, comes at a time when AB InBev is striving to recover from the ongoing crisis.
The company reported that U.S. liquor stores and supermarkets are still reducing their Bud Light orders, even six months after the promotional partnership with Ms. Mulvaney. Retail sales to U.S. retailers saw a 16.6% drop in the three months leading up to September, mainly attributed to the declining sales of Bud Light.
In an effort to rejuvenate the Bud Light brand, AB InBev launched a patriotic TV commercial featuring the U.S. flag, the Grand Canyon, and a voiceover discussing “the American spirit.”
Amidst the turmoil, Alissa Heinerscheid, Bud Light’s Vice President of Marketing, decided to take a leave of absence.
AB InBev has faced criticism not only from conservative groups but also from human rights organizations for failing to publicly support Ms. Mulvaney during the backlash.
Ms. Mulvaney expressed her feelings of abandonment by the company in June, stating, “For a company to hire a trans person and then not publicly stand by them is worse, in my opinion, than not hiring a trans person at all, because it gives customers permission to be as transphobic and hateful as they want.”
In its third-quarter financial results released on Tuesday, AB InBev made no reference to Ms. Mulvaney.
Despite the challenges in the U.S., the company’s global sales increased by 5% in the three months ending in September, aided by higher pricing, although there was a 3.4% drop in the volume of beer sold.
Last week, Heineken, a competitor, mentioned that the rising beer prices are leading consumers to reduce their beer consumption.
