A proposed merger agreement between world-leading beer manufacturers Budweiser, Coors and dozens of other breweries could potentially change the landscape of U.S.-based brewers. Anheuser-Busch InBev (ABI) finalized a deal with British- and South African-based rival SABMiller on November 11, 2015 to the tune of $107 billion. (USA Today) The merger is now facing antitrust scrutiny from the U.S. Department of Justice with a review pending. The proposed transaction is currently anticipated to close in the second half of 2016.
The Brewers Association, an organization of over 2,800 craft brewers, voiced its objections based on concerns that local brewers would face even tougher obstacles to expand their services to major sporting events and retailers. Carlos Brito, CEO of Anheuser-Busch InBev, assured the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights that the proposed merger would have “no impact” on U.S.-based beer sales. Brito testified that approximately 90 percent of ABI wholesalers also distribute competitor brands with no anticipated change following the proposed merger.
The proposed merger would divest SABMiller’s current 58 percent stake in MillerCoors into Molson Coors, which currently holds the remaining 42 percent of MillerCoors. Bob Pease, CEO of the Brewers Association, encouraged Senate lawmakers to require ABI to surrender its current company-owned wholesale distributors in nine U.S. states as part of the proposed merger. The unique ownership of beer wholesalers by large beer manufacturers, such as ABI and SABMiller, is presently allowed in fifteen U.S. states. Pease further shared his concerns regarding ABI’s past leveraging of wholesale operations to allegedly eliminate local competitive brewers in markets such as Oakland, San Jose and Colorado.
While Senate lawmakers and the U.S. Department of Justice continue to evaluate any threat of antitrust violations, the proposed ABI/SABMiller merger may signal dynamic global growth for some of the world’s largest beer distributors. Time will also tell if the Brewers Association’s concerns merit further actions to protect the growing popularity of U.S.-based craft breweries.