Anheuser-Busch, the company that makes Bud Light, faces a hefty fine and a series of mandatory safety reviews as part of a settlement with the U.S. Environmental Protection Agency (EPA) for violations of federal requirements regarding the prevention of chemical accidents.
EPA said in a June 5 press release that it had reached a settlement with Anheuser-Busch, resolving the company's violations of the Emergency Planning and Community Right-to-Know Act and the Clean Air Act's chemical accident prevention requirements.
As part of the settlement, the Bud Light maker must pay a $537,000 fine and is required to implement a comprehensive safety review at 11 of its breweries where a hazardous chemical called anhydrous ammonia is used.
Breweries that use anhydrous ammonia as part of the refrigeration system must comply with strict safety regulations regarding handling and storage of the chemical to protect both staff and the community.
An EPA investigation of three of Anheuser-Busch's facilities in New Hampshire, Colorado, and California led to findings of non-compliance.
Besides carrying out inspections at the three facilities, EPA also investigated an ammonia release that took place at Anheuser-Busch's Colorado facility, which injured two staff members.
While anhydrous ammonia is an efficient refrigerant, it is also corrosive to skin, eyes, and lungs, and so must be handled with care.
Over the course of some 50 years, the ammonia refrigeration industry has developed standards and guidance for preventing accidental releases of ammonia and for mitigating impacts if an accident does occur.
"These standards apply layers of protections to make facilities safer and are routinely updated to keep up with improving technology, newly identified hazards, industry operating experience, and/or incidents indicating more stringent hazard controls are needed," EPA said.
Other requirements around reporting ammonia releases provide first responders with critical information needed to stage an effective and safe response.
While EPA did not provide details of the Bud Light maker's violations in regards to the various standards, the settlement calls for a comprehensive safety review and subsequent corrective action plans at Anheuser-Busch facilities located in New Hampshire, California, Colorado, Texas, Ohio, Florida, New York, Virginia, Georgia, and Missouri.
“This settlement with Anheuser-Busch sends a clear message to companies that store hazardous materials like anhydrous ammonia that they have an obligation to follow regulations designed to protect our communities and environment from potentially catastrophic consequences of accidents,” EPA Regional Administrator KC Becker said in a statement.
“Failure to comply with the law puts first responders and members of the surrounding community in harm’s way,” Becker added.
Bud Light CrisisThe fine and mandatory safety reviews represent the latest headwind for Anheuser-Busch, whose market value has plunged by billions of dollars since the Bud Light maker embarked on a marketing partnership in early April with transgender influencer Dylan Mulvaney.
“This month, I celebrated my day 365 of womanhood and Bud Light sent me possibly the best gift ever—a can with my face on it,” Mulvaney said on April Fool’s Day.
Mulvaney’s engagement with Bud Light sparked outrage among many conservatives, some of whom accused the brand of promoting a transgender agenda and called for a boycott.
Former President Donald Trump also weighed in on the controversy, suggesting boycotts can be an effective way to send a message to brands who critics say are pushing a leftist agenda.
Jared Dinges, an analyst at JPMorgan Chase wrote in a recent note to clients that the Bud Light boycott is poised to persist among some consumer groups in the near term.
"We believe there is a subset of American consumers who will not drink a Bud Light for the foreseeable future," Dinges wrote.
"We believe a 12 percent to 13 percent volume decline on an annualized basis would be a reasonable assumption," Dinges added, predicting a significant drop is Bud Light sales.
According to data by Bump Williams Consulting and Nielsen IQ, sales of Bud Light dropped 25.7 percent for the week ending May 20 amid a falling streak lasting over six weeks.
Michel Doukeris, CEO of Anheuser-Busch InBev, has repeatedly insisted in recent interviews and public statements that Bud Light didn’t engage in an official marketing partnership with Mulvaney.
Doukeris also said that social media “confusion” and “misinformation” were driving the Bud Light boycott that has led to the sales slump.