Foreign-Owned Beer in American Clothing: What You're Drinking This July 4th

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Red, white and blue seasonal cans haven't indicated an "American" beer in a long time.

You're going to see a whole lot of beer displays this July 4th weekend, and they're going to feature a whole lot of beers draping themselves in the American Flag to take advantage of the patriotic tone of the holiday. Granted, that isn't exactly in compliance with U.S. code regarding the flag, commonly known as the "flag code." But brewers don't care all that much about those stipulations and argue that their designs only emulate the flag. The code says otherwise:

(i) The flag should never be used for advertising purposes in any manner whatsoever. It should not be embroidered on such articles as cushions or handkerchiefs and the like, printed or otherwise impressed on paper napkins or boxes or anything that is designed for temporary use and discard.

Besides, this patriotic ploy is quickly losing its appeal in a shifting U.S. beer market. Overall U.S. beer sales have either stagnated or declined outright every year since recession-addled 2009. According to the Beer Institute industry lobbying group in Washington, D.C., the only year that U.S. beer sales increased in that time was 2014, when they rose 0.6%. That wasn't enough to erase a downturn that took overall U.S. beer production from 213.3 million barrels in 2008 to 206.3 million last year.

Light lagers owned by large multinational producers have seen sales plummet while sales of craft beer brands continue their steady rise. Since 2009, according to the Brewers Association craft beer industry group in Boulder, Colo., craft beer sales rose from 8.5 million barrels to 24.1 million barrels as brewery numbers increased from 1,523 to more than 4,400.

Yet even craft beers aren't necessarily "American." Since the acquisition of Chicago-based Goose Island Brewing Company in 2011, Anheuser-Busch InBev alone has purchased seven more breweries in as many states, as well as Michigan-based Virtue Cidery. MillerCoors, under joint Canadian and U.S. ownership by Molson Coors, also purchased San Diego's Saint Archer Brewing Company last year.

More impressive, however, is the acquisition of U.S. craft brewers by importers and foreign brewers including Heineken, Constellation Brands, Mahou San Miguel and Duvel Moortgat. This comes as import sales rose 6.2% last year, selling 5 million barrels more than all craft brands combined and snagging a nearly 15% share of the overall U.S. beer market. Mexican brands alone have seen 10.2% growth over the last year, according to Nielsen, matching the growth of craft beer in retail markets while posting 0.2% greater share.

All of this matters a lot more around July 4th than it does during the rest of the year. According to the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau, July is the last of the peak summer months for beer sales. Shipments that fester around 14 million to 15 million barrels through spring suddenly jump to about 18 million barrels in June before settling in a 17 million or so in July. By August, it starts its slide just below that 17 million mark before collapsing to as low as 13.3 million by November.

We don't blame brewers for trying to win over U.S. followers at this point in the calendar, but we do question the effectiveness of branding your beer "American" when your headquarters are anything but. The following are just a few examples of brands that are trying to their best to look "American" this July 4th, but that are sending their regards from abroad:

5. Budweiser

When Anheuser-Busch sold to InBev -- based in Leuven, Belgium, and Sau Paolo, Brazil -- in 2008, you would have thought that would have stripped Budweiser of any right to attach itself to U.S. holidays.

Yet, this year, Anheuser-Busch InBev decided to replace Budweiser's traditional label with an "America" label. You could argue that it wins on a technicality -- as Brazil is in either South America or on the American continent, depending on where you were educated -- but the presence of verses from "The Star-Spangled Banner" and "This Land Is Your Land" (which represents a fundamental misunderstanding of Woody Guthrie's entire career) points directly at the U.S.

Even before this, however, there was little about Budweiser that was "American." It dates back to a beer from the Czech Republic's Bohemian region that was first brewed in the 18th Century. It shares a name with a Czech beer that actually holds the trademark to it in much of Europe, forcing Anheuser-Busch InBev to call its beer "Bud." The U.S. version wasn't made here until 1876, and even then by a German immigrants who gave their beer its name in tribute to the original.

Since the 2008 takeover, Anheuser-Busch InBev cut jobs in the U.S. and even removed Budweiser's German hops from the mix. However, the brand was in steep decline even before then. In 1988, Budweiser sold 50 million barrels and was one in every four beers purchased in the U.S. market. Its sales have dropped more than 70% to just 7% market share, compared to the 12.2% craft share cited by that the Brewers Association. That even falls beneath the 7.8% share that Nielsen says Mexican brands like Corona, Dos Equis and Modelo now enjoys in the United States.

That's right, build-a-wall folks: In the U.S., Mexican beer is more "American" than the King of Beers.

4. Keystone Light

We'll say this: It's more American than it was at this time last year.

It certainly has U.S. origins: it was first brewed by Golden, Colo.-based Coors in 1989 and debuted in Chico, Calif., in craft brewer Sierra Nevada's backyard. But that's before things got a little more... watered down. In 2005, Canada's Molson merged with Coors to create the Molson Coors Brewing Company headquartered in both Golden and Montreal. In 2007, it entered into a joint distribution agreement with SABMiller known as MillerCoors, which officially gave low-end Keystone parents in three different countries.

After Anheuser-Busch InBev announced its intention to buy SABMiller, Molson Coors bought SABMiller's share of MillerCoors from it and all the U.S. rights to its brands with it. That means that Keystone is definitely a North American beer. However, considering it's produced by a company that also makes a beer called Molson Canadian, no amount of red, white and blue paint can disguise Keystone and Molson Coors's dual citizenship.

3. Genesee

With all apologies to Rochester, N.Y., we can't give Genny a pass on this one.

In fairness, the Genesee brewery has been brewing in Rochester under that name since 1878 but has a history in the region dating back to 1819. It isn't its fault that one of its first buyers, the Fred Koch Brewery, had British owners. It also isn't its fault that, in 2009, it was sold to KPD Capital Partners and thrown into the North American Breweries subsidiary with Burlington, Vt.-based Magic Hat; Seattle-based Pyramid; and Portland, Ore.-based Portland Brewing -- not to mention its Labatt USA importing operation.

Lastly, it isn't its fault that KPD Capital Partners, doing what an investment firm does, flipped the whole package to Florida Ice and Farm Company for $338 million in 2012. Genesee also couldn't have foreseen that Florida Ice and Farm wouldn't be based in Florida, but in San Jose, Costa Rica.

Genesee has regularly flown the Stars and Stripes on its cans during the summer months. But once it began doing in 2013 a year after its sale, it started playing it fast and loose with the unfortunate facts.

2. Lagunitas New Dogtown Pale Ale

O.K., so the labeling is red, white and blue more by coincidence than by any concerted patriotic effort. Nonetheless, this hoppy remix of the brewery's original 1993 pale ale is now as much of a dual citizen as any Molson Coors product.

Last September, Lagunitas announced that it had sold a 50% stake to Amsterdam-based Heineken. This came as a bit of a surprise, as Lagunitas founder Tony Magee had been a vocal critic of both big brewers and craft beer acquisitions. That said, it wasn't all that surprising. Lagunitas's brewery culture in Petaluma, Calif., is built as much around marijuana as it is around beer. Its Undercover Investigation Shut-Down Ale references the time that an eight-inch joint at the brewery's Saint Patrick's Day party in 2005 sparked a drug bust that almost cost Lagunitas its existence. Lagunitas's Censored copper ale was originally named Kronik before the TTB stepped in.

While craft beer stalwarts were aghast that Magee sold, the fact that he sold only half of his brewery to a company based in Amsterdam and made enough money to cover annual trips and, maybe, a nice little pied-a-terre near the city's aromatic coffee shops made more sense than most craft beer acquisitions. God bless America... and the Netherlands.

1. Guinness Blonde American Lager

The first word in that name should tell you right off the bat that there's nothing "American" about this.

A historic Dublin brewery owned by a U.K. spirits conglomerate doesn't have anything more "American" to offer than its satellite headquarters in North America. Oh, and maybe City Brewing's facility in Latrobe, Pa., where it brews Blonde American Lager under contract.

Diageo has been eager to jump start the Guinness brand in the U.S., where it grew just 1.1% last year and its 2.3 million barrels of production are less than that of the North American Breweries brand, Boston Beer Company's Samuel Adams brands and D.G. Yuengling and Sons' beers. While U.S. craft brewers have been finding some measure of success with pilsner and other light lagers of late, we can't say it's a great play for larger brewers. The Top 4 light lager brands (Budweiser, Bud Light, Coors Light Miller Lite) all saw saw sales slump last year. Yes, Diageo and Guinness are technically imports like Corona, Heineken and Dos Equis -- all of which saw sales growth last year -- but calling it "American" and slapping anything other than "Busch" (up a surprising 19% last year) on the label won't help matters on July 4th.

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