The company outgrew its original home in tiny Castle Danger and now distributes beer to bars and restaurants throughout northern and central Minnesota. Anheuser-Busch InBev announced in November it would purchase SABMiller for $106 billion, bringing together the two largest beer producers in the world. The combined company would hold the No. 1 or No. 2 positions in 24 of the world’s 30 largest beer markets. “By working to ensure those decisions are driven by consumer demand and not producer power, we can help competition in the beer industry remain on tap”.
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Sen. Chris Coons, D-Delaware, said, “Nobody wants to take a seat at a bar and find out that their only choices are between a Bud and Miller”. “I’m deeply concerned this merger will squeeze out the small and independent craft brewers in DE and across the country at the cost of innovation, consumer choice and jobs”.
Bob Pease, chief executive of the Brewers Association, which promotes independent craft brewers, anxious the MillerCoors sale was not enough to protect smaller brewers’ access to markets, and the two companies should be forced to sell-off the wholesalers they owned.
Carlos Brito, CEO of the Belgium-based Anheuser-Busch InBev, repeatedly told lawmakers the proposed deal would not affect USA operations.
“This hearing will provide an opportunity to publicly examine the impact of the so-called “beerhemoth” merger on consumers and for the Antitrust Subcommittee to continue its oversight of potentially anti-competitive market consolidation”, senator Mike Lee, the chairman of the panel, said in a statement. AB InBev is planning to sell off SABMiller’s stake in MillerCoors to co-owner Molson Coors for $12bn.
“This transaction is really about the rest of the world, not the U.S.”, said Brito, citing post-deal plans to expand in parts of Asia, Africa and parts of South America.
The U.S. beer industry is more competitive than ever with the strong growth of craft beer and increased competition from wine and liquor, Brito said.
“The U.S. beer industry – which serves tens of millions of consumers at all income levels – is highly concentrated with the two defendant firms accounting for approximately 71 percent of all sales volume nationwide”, the plaintiffs write in the lawsuit filed December 1.
Anheuser-Busch InBev, which makes Budweiser, want to buy SABMiller, which makes Miller Lite, for more than $100 billion. SABMiller, based in London, has Miller Genuine Draft, Peroni and Milwaukee’s Best among its 200 or so brands.
National Beer Wholesalers Association Chief Executive Craig Purser voiced similar concern and called on regulators to prohibit “exclusivity mandates” that would led distributors to focus exclusively on one brewer’s brands. Large brewers can “exert pressure on independent distributors not to carry rival brands and on retailers to design their shelves to disfavour or remove rival brands”, he said.
“This is a troubled market landscape against which this is occurring”, said Diane Moss, president of the American Antitrust Institute, who told the Senate Judiciary’s antitrust subcommittee that the deal, as constituted, violates federal law and would result in higher prices and fewer choices. Leahy is the top-ranking Democrat on the full committee.
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The planned $107 billion merger between the owners of Budweiser, Coors and dozens of major beers got its first public scrutiny Tuesday with debate over whether the deal would freeze out local US brands like Dogfish Head, Castle Danger or Rogue.
