clock menu more-arrow no yes mobile

Filed under:

Massive Beer Merger Expected to Get Thumbs Up From Justice Department

Concerns from the craft beer industry have reportedly been ignored

Joe Raedle/Getty Images

A global beer goliath will soon come to power: The U.S. Justice Department is about to approve the merger between the world's two biggest beer companies, AB-InBev and SABMiller, reports the Chicago Tribune.

The deal, which will create a conglomerate that controls 30 percent of the global beer market, has already won approval from antitrust regulators in a number of other nations including South Africa and the European Union. AB-InBev and SABMiller have sold off a number of brands in efforts to push the deal through: SABMiller offloaded beer labels Peroni and Grolsch to Japan's Asahi, and it also sold off its majority stake in MillerCoors.

Citing "people familiar with the matter," the Tribune says the U.S.'s approval of the $107 billion deal "may include measures to keep the beer behemoth from edging craft brewers from shelves," a concern that's been raised since news of the proposed merger first emerged last September. That could mean "limits on the combined company's ownership of distributors." AB-InBev has purchased a number of U.S. beer distributors over the past year, leading the Justice Department to investigate claims that the company was using unfair practices to squash its smaller, craftier competitors.

But Tribune sources say craft brewers' complaints about unfair advantages are seemingly being ignored, with one stating that much of the Justice Department's antitrust investigation resources are currently being occupied by two proposed mega-mergers in the healthcare industry.

An opinion piece in today's New York Times voices why beer lovers — and really, anyone concerned about consumer choice — should be worried about the impending merger: "The enlarged Anheuser-Busch InBev will have more influence over which brands distributors carry, making it harder for smaller companies to get their products onto store shelves. It will have even more power to strong-arm independent distributors not to carry rival brands and exert pressure on retailers to cut back on, or even refuse to carry, competitive brands. And it will have more resources to buy up smaller breweries as they start to feel squeezed out of the marketplace."

The Times piece suggests that in addition to limiting ownership of distributors, the Justice Department should also look into "limit[ing] the number of additional independent breweries that the company can buy." AB-InBev has been on a recent acquisition spree, swallowing up a number of well-known craft brewers including Goose Island and Elysian.