One of the world’s largest financial institutions is advising clients against purchasing stock in Anheuser-Busch due to the ongoing “Bud Light crisis” in the United States, NBC News reported.
Carlos Laboy, a stock analyst with HSBC, downgraded the Anheuser-Busch InBev stock to “hold,” saying the US branch has “deeper problems” than Anheuser-Busch is admitting due to the boycott launched against Bud Light over its partnership with transgender social media influencer Dylan Mulvaney.
In his assessment, Laboy wrote on Wednesday that the company leadership’s attempt at “brand culture transformation” has shown mixed results, adding while he thinks Anheuser-Busch is succeeding, in the United States, it is not.
He said the management’s response to the Bud Light crisis, coupled with the unprecedented loss of volume and “brand relevance,” leads to “many questions.”
While Anheuser-Busch reported a spike in first-quarter profits in 2023, data from Beer Marketer’s Insights found a steep drop in beer sales during the month of April.
In the first quarter, Anheuser-Busch was up more than 5.7 percent, but in this quarter, it is down by over 4.8 percent so far.
Laboy wondered how the Anheuser-Busch management in the US could have underestimated the “risk of pushback” given what has happened with other firms in recent years.
He said if the company considers Budweiser and Bud Light “iconic American ideas” that have “long brought consumers together,” why did its marketing executives fail at inviting “new consumers without alienating the core base” of its biggest brand?
On Wednesday, Anheuser-Busch InBev shares dropped another 1.3 percent.
Since its partnership with Mulvaney was announced, Anheuser-Busch has lost $6 billion in stock value.
The New York Post reported on Tuesday that in the last week of April, nationwide sales of Bud Light fell by 23.4 percent compared to the previous year.
In the fallout of the controversy and boycotts, multiple marketing executives with the company were put on a leave of absence.