Big Beer is trying to get bigger. The world’s two largest beer producers, AB InBev and SABMiller, have agreed to a $104 billion merger that would unite the Budweiser and Miller tribes. The new sudsy superpower would control 30 percent of the world’s beer and eight of the top 10 best-selling brews.
Before it’s official, the feds have to give their approval. Minnesota Sen. Amy Klobuchar, the ranking Democrat on the subcommittee that handles antitrust issues, announced this week that they’ll give it a hearing. Ultimately, it’s the Federal Trade Commission’s call, but local brewers aren’t sweating it too much — mostly because they don’t think the government will let the Budweiser and Miller brands cohabitate.
“I’m really skeptical that this sort of merger is going to be allowed to go forward in the U.S. at least,” says Matt Schwandt, co-owner of Bauhaus Brew Labs in Minneapolis.
Combined, the two companies own a bazillion different brands. Stella Artois, Beck’s, and Labatt Blue are on AB InBev’s roster, while Pilsner Urquell, Peroni, and Wisconsin’s Leinenkugel are under SABMiller. Some think AB InBev would have to sell off its U.S. rights to some of the brands and holdings — namely SABMiller’s majority stake in MillerCoors (Miller Lite, Coors Light) — before the deal would be approved.
If unconditionally greenlighted, small brewers fear the conglomerate would have a monopoly in certain regions and the clout to strong-arm distributors into pushing their beers above others. Schwandt suggests that a new mega-company could try to keep craft brewers out of stores in smaller towns, and quarantined in metropolises.
“If for some reason it does sneak through, and I guess it’s not out of the realm of possibilities given how much power, especially AB InBev has, I think it would be a huge blow to what is a burgeoning craft beer industry in the U.S.,” says Schwandt, a former lawyer.
The bigger concern for your favorite Minnesota microbrewers, they say, is the trend of Big Beer buying out the little guys. The more independent breweries they swallow, the harder it becomes for smaller breweries to fight for shelf space.
“The whole strategy of course is to build up a portfolio of craft breweries,” says Ted Marti, owner of August Schell Brewing Company, America’s second oldest family brewery. “Then they can tell their wholesalers, ‘Well, you don’t need to look outside the box for craft brewers, because we have a whole portfolio of craft brewers.’ That’s where the challenges are going to occur.”