Anheuser-Busch accused of watering down several brands

Los Angeles (CNN) -- Two California residents are suing Anheuser-Busch, alleging that the company waters down Budweiser and other beers "significantly" to boost profits, their attorneys announced Tuesday.

The class-action lawsuit alleges that the maker of the "King of Beers" has the technology to precisely control the amount of alcohol in its beers but adds water so that the alcohol is well below the advertised figure of 5% by volume, the suit said.

"There are no impediments -- economic, practical or legal -- to AB accurately labeling its products to reflect their true alcohol content," the 18-page lawsuit said. "Nevertheless, AB uniformly misrepresents and overstates that content."

The beer maker rejected the lawsuit's allegations.

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"The claims against Anheuser-Busch are completely false, and these lawsuits are groundless," said Peter Kraemer, vice president of brewing and supply for Anheuser-Busch. "Our beers are in full compliance with all alcohol labeling laws.

"We proudly adhere to the highest standards in brewing our beers, which have made them the best-selling in the U.S. and the world," he said.

The lawsuit alleges the other watered-down beers are Bud Ice, Bud Lite Platinum, Michelob, Michelob Ultra, Hurricane High Gravity Lager, King Cobra, Busch Ice, Natural Ice and Bud Light Lime.

But the suit doesn't provide figures for the allegedly watered-down alcohol content.

Nina Giampaoli and John Elbert, who reside in Sonoma County, California, are the plaintiffs who say they stopped buying Budweiser after learning of the alleged mislabeling, the suit said.

Their suit, filed last week in federal court in San Francisco, alleges violations of California's consumer protection laws and Missouri's Merchandising Practices Act.

"I think it's wrong for huge corporations to lie to their loyal customers -- I really feel cheated," Giampaoli said in a statement. "No matter what the product is, people should be able to rely on the information companies put on their labels."

The company's parent, Anheuser-Busch InBev SA/NV, is the world's largest producer of alcoholic beverages and made more than 10 billion gallons of malt libations in 2011, generating gross profits of more than $22 billion, the lawsuit said.

The parent company's 13 U.S. breweries alone produced more than 3 billion gallons of alcoholic beverages in 2011, and Anheuser Busch has a 47.7% market share of the U.S. sale of beer, the suit said.

"Because water is cheaper than alcohol, AB adds extra water to its finished products to produce malt beverages that consistently have lower alcohol content than the percentage displayed on its labels," the suit said. "By doing so, AB is able to produce a significantly higher number of units of beer from the same starting batch of ingredients.

"AB never intends for the malt beverage to possess the amount of alcohol that is stated on the label. As a result, AB's customers are overcharged for watered-down beer and AB is unjustly enriched by the additional volume it can sell," the suit said.

The lawsuit, which says the matter in controversy exceeds $5 million, seeks unspecified amounts for compensatory and exemplary damages and asks the court to require the beer makers "to fund a corrective advertising campaign," the suit said.

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