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What on Earth is Anheuser-Busch Thinking?

This is a partial transcript from The O'Reilly Factor, March 1, 2004 that has been edited for clarity.

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BILL O'REILLY, HOST:  Now for the top story tonight, what on earth is Anheuser-Busch (search) thinking?  With us now, Shawn Tully, senior writer for "Fortune" magazine. 

Can you believe this?

SHAWN TULLY, "FORTUNE" MAGAZINE:  It's really an extremely high-risk move that they've made here, Bill, because this company is a very shrewd marketing company. 

They've been able to gain market share consistently against the microbreweries and against imported beers and get their prices higher and made Bud Light the number one beer in the country. 

They have 50 percent market share in the beer market in the U.S.  They've gotten into microbreweries themselves.  They've come up with ads that were the top-rated ads in the Super Bowl (search), including one with a horse passing gas. 

O'REILLY:  But look, they saw what happened to Pepsi.  All right? 

Now this guy Ludacris, this isn't some kind of Ozzie Osborne deal here, all right?  This is a guy -- You don't get more extreme than guy.  All right? He comes in and celebrates illegal, violent criminal activity.  This is what he does.  And I can't imagine a Fortune 500 company embracing this guy. 

TULLY:  The problem is you're on a very narrow line here. You want to be hip, but you don't want to antagonize your older, kind of core beer drinkers. 

On the other hand, you want to be a little bit cruder maybe than before, but you don't want to antagonize women. 

And I think that they are in a position now where if they cross that line they're going to damage...

O'REILLY:  But they've crossed it.  Have they not crossed it?

TULLY:  I think that's up to consumers to decide. 

O'REILLY:  What's your bet here?  I mean, look, Pepsi, millions of people.  Now we're talking about this on the radio and television today.  I know it's a different market, Pepsi and kids and this and that. 

But look, Anheuser-Busch has got Busch Gardens (search), Tampa Bay, Williamsburg, Sea World Orlando (search), San Jose, San Antonio; Discovery Cove (search), Orlando, Sesame Place (search) in Langhorne, Pennsylvania. 

Americans are just going to say look, we're not going to go.  We don't want this pollution to be embraced by corporate America.  That's what they're doing. 

TULLY:  It's very hard to predict -- there will be a backlash.  There's no question about it.  There's going to be a backlash.  Will that backlash generate so much publicity for them among young beer drinkers that it makes up for the damage to their core franchise and other areas?

O'REILLY:  Right.

TULLY:   It's possible that it will. 

O'REILLY:  But what about the morality of this?  You know, we asked Anheuser-Busch.  They're afraid.  They know they're doing wrong.  I mean, they know they're doing wrong, so they're afraid.  They gave us a dopey statement like -- well, you just said, they're trying to get 50 percent of the market.

But isn't there a morality?  I mean, why not John Gotti (search), the late mobster?  Why not hire him?  You see what I'm talking about here?

TULLY:  Yes.  The stuff that you were reading would definitely be very disturbing to a lot of consumers.  There's no question about it

O'REILLY:  This is what this guy does all day long.  I mean, I could sit here for an hour and read this kind of stuff.

TULLY:  On the other hand, we're talking about a marketing campaign.  We're talking about an entertainer here.  The question is, you know, how seriously do you want to take this and how seriously are the consumers going to take this? 

O'REILLY:  Every educator that I've talked to, and I've talked to hundreds, say that the kind of gangsta rap that Ludacris traffics in has debased the culture, made it more difficult for them to teach children and indeed, led children into anti-social behavior. 

Every single one of them say that.  And Anheuser-Busch is going to reward that kind of stuff?

TULLY:  What really matters is the way consumers react and whether they react by not buying their products.  There's a free market out there.  They're going to vote with their dollars on this thing. 

O'REILLY:  What are you betting?

TULLY:  I bet that perhaps they went over the line here in terms of disrupting that balance between antagonizing some of their core consumers, versus winning a hipper audience. 

O'REILLY:  Is there anybody in this company with any sense that can reverse this?

TULLY:  Yes.  When you start losing money on this stuff, it gets reversed pretty quick. 

O'REILLY:  All right.  Well, once again, I'm not buying it.  I don't like to do this.  I didn't like to do it with Pepsi, and I don't like to do it now, but you've got to draw a line. 

The line was drawn.  We're going to deal with in a minute with "The Passion of the Christ" movie.  And it's being drawn now. 

Mr. Tully, thanks very much.  Appreciate it.  Thanks to see you. 

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