• Ad Age, Friday, July 11, 2008 12 PM

Increased competition -- both from new domestic competitors such as Bud Light Lime and Miller Chill, as well as stronger import brands -- are taking a toll on Corona Extra sales, executives at the brand's U.S. importer now admit. Earlier, they had blamed a price increase.

There has been "some impact from new competitive product introductions," Rob Sands, CEO of Constellation Brands, which owns 50% of Corona importer Crown Imports, recently told Wall Street analysts. That's a significant change from Sands' story two months earlier, when he said, "our people have said that they didn't think that the Bud Light with Lime introduction hurt Corona at all. These products tend to be more like coolers or alcopops."

"Their competitive dynamic has changed," says analyst Kaumil Gajrawala, who covers the beer sector for UBS, Corona also faces competition from Femsa Cerveza's U.S. portfolio, including Tecate and Dos Equis. Corona Extra, however, is still a juggernaut: It sold 8.3 million barrels last year, making it the largest import, according to Beer Marketers Insights.

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