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Energy drink remix on tap

Anheuser-Busch, in an 11-state agreement, will stop selling beverages that contain both alcohol and caffeine.

June 27, 2008|Marc Lifsher | Times Staff Writer

SACRAMENTO — Anheuser-Busch Cos. said Thursday that it would stop producing and distributing energy drinks that contained both alcohol and caffeine and often other stimulants.

Attorneys general from California and 10 other states announced that the St. Louis-based company, the nation's largest brewer, would reformulate its Tilt and Bud Extra products.

In a legal agreement, Anheuser-Busch promised to remove stimulants, including guarana -- an Amazonian plant from which an herbal compound is derived -- from Tilt and Bud Extra.

Guarana and other natural ingredients, such as ginseng, provide a user with a short-term mental and physical boost.

Critics contend that Tilt, Bud Extra and Miller Brewing Co.'s Sparks look and taste like nonalcoholic energy drinks and put drinkers, particularly young people, at risk of being injured in car accidents or other mishaps.

A 2007 Wake Forest University study involving 4,271 students from 10 universities found that nearly one-quarter of those who had consumed alcohol in the last 30 days had mixed alcohol with energy drinks.

"You're a wide-awake drunk," said George Hacker, a policy advocate with the Center for Science in the Public Interest in Washington. "You're not aware of the fact you are drunk because you feel so good."

California Atty. Gen. Jerry Brown praised Anheuser-Busch for taking "an important step to protect young people from attractive alcohol advertising and marketing." He urged other manufacturers to follow the company's lead.

Milwaukee-based Miller was not part of the settlement with the states. It did not respond to requests for comment on its products or on the Anheuser-Busch agreement.

In a statement, Anheuser-Busch said the settlement with the 11 states "contains no findings" that it "engaged in unlawful behavior or advertised to youths."

Vice President Francine I. Katz said her company was the first brewer to cooperate with attorneys general and consumer groups, which asked brewers and distillers not to sell prepackaged caffeinated alcohol beverages. Anheuser-Busch has a long history of voluntarily working with the state attorneys general, she said, "to encourage adults to drink responsibly."

States that joined with California in the Anheuser-Busch agreement are Arizona, Connecticut, Idaho, Illinois, Iowa, Maine, Maryland, New Mexico, New York and Ohio.

Anheuser-Busch's decision should have little effect on the company's finances, said Craig Hutson, an analyst who tracks the big brewer for New York-based Gimme Credit, which provides corporate bond research.

"It's inconsequential to Anheuser-Busch in terms of sales or profits," he said. "It's a really small volume of products."

Anheuser-Busch's move to improve its public relations profile came on the same day that the brewer's board of directors officially rejected a takeover bid by InBev, a Belgium-based brewing giant whose beer brands include Bass, Stella Artois and Beck's.

The board unanimously refused the $46-billion offer, saying the unsolicited bid undervalued the maker of Budweiser and was not in the best interest of the company's shareholders.

But the rejection may not be enough to overcome shareholder pressure to push up share prices.

InBev, which traces its roots to 1366, said earlier Thursday that it planned to ask shareholders to remove Anheuser-Busch's directors.

Anheuser-Busch shares fell 41 cents to $61.35.


Bloomberg News was used in compiling this report.

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