Could Lawsuit Halt Bud's Turnaround?
When it comes to booze, Americans don't mess around.
A few weeks ago, Maker's Mark announced that it was going to add more water to its signature bourbon, reducing the alcohol content.
The backlash was swift and damaging. The power of Twitter was in full force, and about a week later, parent company Beam, Inc reversed the decision.
Now, beer giant Anheuser-Busch InBev is accused of doing the same with its beer.
Except this time, there was no alleged transparency.
(Read More: Watered-Down Beer? Bud Sued Over Alcohol Levels)
And for that, instead of just Twitter backlash, there is legal backlash.
A class-action lawsuit has been filed in California, claiming Anheuser-Busch deprived consumers of what they paid for because there was less alcohol in the beer than what the label stated.
Ten brands are named in the lawsuit: Budweiser, Bud Ice, Bud Light Platinum, Michelob, Michelob Ultra, Hurricane High Gravity Lager, King Cobra, Busch Ice, Natural Ice and Bud Light Lime.
"AB's claims are false in every instance and are based on its uniform corporate policy of over-stating the amount of alcohol in each of AB's products," the lawsuit says.
"There are no impediments - economic, practical or legal - to AB accurately labeling its products to reflect their true alcohol content. Nevertheless, AB uniformly misrepresents and overstates that content."
The California case is asking for more than $5 million in damages. Pennsylvania and New Jersey reportedly also have filed similar lawsuits, and other states could follow.
(Read More: Sam Adams Beer Gets Canned and...A Beer Museum?!)
A few interesting things to note.
First, the lawsuit states that the condoned practice of adding water before bottling was "accelerated" since the 2008 merger. Also, the case's foundation seems to be anecdotal evidence from employees at the breweries. There is no scientific data involved.
"I think it's wrong for huge corporations to lie to their loyal customers -- I really feel cheated," the lead plaintiff Nina Giampaoli said through California-based Mills Law Firm. "No matter what the product is, people should be able to rely on the information companies put on their labels."
As for the company itself, Budweiser Vice President Peter Kraemer said in a statement: "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."
The timing of this could not be worse for the parent company AB InBEV.
The Department of Justice is threatening to block the $20 billion deal to take full control of Grupo Modelo.
Also, earnings came out Wednesday, with the company reporting weaker year-over-year profits, but there was one key positive: Business in the U.S. is turning around.
For the first time since the 2008 merger, volumes were up in the United States, a huge region for the company.
Regardless of what happens in court, the perception could hurt the brand and stall this positive comeback story.
That's a big deal when the U.S. accounts for 40-percent of company profit and roughly a third of revenue.
A series of $5 million lawsuits could impact billions of dollars in sales.
(Read More: The World's 10 Strongest Liquor Brands)
—By CNBC's Brian Shactman; Follow him on Twitter: @bshactman