Colt 45 shoots down its two ad agencies Brewer cites cost, not black criticism

August 28, 1993|By Ian Johnson | Ian Johnson,New York Bureau

NEW YORK -- In the wake of a controversial advertising campaign and falling sales, G. Heileman Brewing Co., the maker of Colt 45 malt liquor, has fired its two advertising agencies.

The nation's No. 5 brewer canceled its $20 million annual account with two Madison Avenue agencies, Messner Vetere Berger McNamee Schmetterer and Deutsch/Dworin.

Company officials said they had grown dissatisfied with the ads' effectiveness and notified the agencies Tuesday, though the decision was not made public immediately.

Heileman said the cancellation was unrelated to criticism from the black community that the company's ads targeted black fTC drinkers and helped encourage alcoholism in inner-city areas.

"It was just a business decision based on our advertising needs and the ability of the agencies to meet them. I don't think it resulted from pressures by outside groups," said Randy Smith, Heileman's general counsel. "From a business standpoint, we didn't think they were doing the job."

Although the privately held company does not release financial figures, independent trade groups estimated that the Wisconsin-based brewer has seen falling sales of its potent malt liquor beers, some of which are brewed in its Halethorpe plant southwest of Baltimore.

The company's beer shipments dropped 3 percent in 1992 and 11 percent in 1991, the year it emerged from Chapter 11 bankruptcy protection, according to the newsletters.

Part of the reason for the weak sales might stem from vocal opposition to Heileman's malt beers, industry observers said.

Last year, for example, Heileman came under attack for a television commercial created by Deutsch/Dworin for Colt 45 that featured a young black man giving a serious talk to inner-city kids about commitment and the need for education. At the end of the commercial, the young man pulls out a Colt 45 -- one of the brands of malt liquor criticized for its high alcohol content.

"The ad was sort of strange. The guy is talking about success and then pulls out a malt -- a beer designed to give you a quick buzz," said Dave Kiley, an advertising industry observer for Ad week, a trade publication.

Black community leaders have said other Heileman marketing efforts also targeted their communities and they have urged that the products be shunned. One new Heileman product, for example, featured a menthol flavor, a taste favored by black cigarette smokers, industry trade figures have shown.

Regular beers have between 3 percent and 5 percent alcohol content, while malt liquors have up to 8 percent. Malt liquors account for 3 percent of the beer market, with annual sales topping $1.1 billion.

And although blacks only make up 12 percent of the U.S. population, about 27 percent of malt consumers are black, according to the Beer Institute, a trade group in Washington.

Malt beers also are one of the few growth areas in a sluggish beer market. Sales of malts grew 24 percent between 1987 and 1992, according to trade publications.

Ad agency officials, however, said Heileman only told them that they were being dropped because the company wanted to cut costs and could save $250,000 by not flying from the Midwest to New York.

The reasoning, however, seemed questionable to agency officials, because that would imply that Heileman visited New York scores of times a year, which they doubted was true.

The agencies did not seem too bothered by the loss of business. Officials from both agencies said they would prefer to do business with larger beer makers.

"What's really telling is that the agencies just said 'Oh well,' " Mr. Kiley with Adweek said.

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