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Bud fires latest salvo in low-carb beer battle

Anhueser Busch has fired latest salvo in low-carb beer battle.  Budweiser Select, with 3.1 carbs per 12-ounce beer, is  aimed at cslowing growth of Miller Lite's 3.2 carbs per beer. By CNBC's Phil LeBeau. 
/ Source: CNBC

The King of Beers is struggling to quench the thirst of investors. So it's brewing up a new beer to kick start sales, and perhaps kick start its stock.

In the fight over how-low-can-you-go with carbs, the empire is striking back. Budweiser Select, with 3.1 carbs per 12-ounce beer, is Anhueser-Busch's answer to Miller Lite's 3.2 carbs per beer.

“I think it's a very significant new product introduction for Anhueser-Busch, the most significant in years, perhaps since Michelob Ultra, because it comes at a critical time for Anhueser-Busch,” said Benj Steinman, publisher of Beer Marketer's Insights

It's critical because Anhueser-Busch is losing ground to resurgent Miller Lite. Last year, Lite boosted sales by 10.5 percent, easily outpacing Bud Light and original Bud, which lost market share. Even though Anshueser-Busch controls almost half of the beer business in America, the momentum is clearly with Miller, which has picked up sales by touting its beer as the one with the fewest carbs.

Lite's newest ad campaign suggests Budweiser Select will actually drive beer drinkers to Miller Lite. “From what we hear,” on Miller ad claims, “we got it right the first time — still with more taste than Bud Light and half the carbs.”         

“We actually think Bud Select is confusing to consumers,” said Jeff Hembrock, a Miller marketing executive. “It appears to be another light beer from Anhueser-Busch, but that's not what consumers are being told.”

While Bud Select may be lower in carbs than Miller Lite, that’s not the focus of its ad campaign. It's mainly about having a beer with no aftertaste.

“It's a new kind of beer,” the Bud ad claims.

It's an approach that might make sense, since some beer buyers seem bored with the low-carb beer battle, according to several CNBC spoke with.

While beer drinkers may choose Anhueser-Busch beers, investors are more interested in shares of SABMiller, which has steadily moved higher as Bud shares have dropped.

“Anhueser-Busch is a turnaround story — with the question being can the rollout of new products like Bud Select not cannibalize its other big names like Bud Light,” said Sarat Sethi, a beverage industry analyst with Douglas C. Lane & Assoc.

For its part, Anhueser-Busch believes Budweiser select can increase sales overall while not hurting Bud Light sales. That's important because Bud Light is the top selling beer in the country.