€™s failure “Aussies are miffed that their brand cannot fully capitalize on the Australian for Beer campaign because the import agreement ties growth in Foster’s budget to growth in Molson’s. Thus, Foster’s has been stuck at roughly $10 million in annual spending because Miller has been underspending on Molson until it comes up with an effective creative strategy” (Khermouch 5).
Other weaknesses exist at Molson Brewing besides its import agreement structure, declining sales in the U.S., and limited control over its own marketing and import direction. Further, many point to a Miller Brewing management mentality that refused to except the reality that Molson’s declining sales and plant closings and lay-offs were a sign that the brand was in trouble. Production problems like can and bottle flaws have injured the company’s relationship with wholesalers and others, but recently part of Molson’s strategy has been to convince Miller executives that it is time for a change if Molson is to be salvaged. As one Molson executive said of the Miller executives “They’ve finally admitted that Molson is broken, has a huge problem and needs to be turned around. For wholesalers in the Northeast, where erosion of Miller’s core brands has been most severe, the Molson and Foster’s imports hold unusual importance. Molson declined 5 percent to 20 million cases in 1998, versus rival Labatt’s 16 percent gain to nearly 15 million cases” (Khermouch 8).
Production and packaging problems like the Molson 12-ounce longneck non-returnable bottles and other issues were also thought to be weaknesses that were hurting sales. Molson has setup a monitoring team to view Miller’s handling of the brand in the U.S., where Square One of San Francisco has been named the new advertising agency to handle the $15 million in billings from Molson in the U.S. (Khermouch 8). In order to help increase sales in the U.S., Molson has declared it...