Antitrust Law Daily Wrap Up, ANTITRUST NEWS: AAI warns against rumored acquisition of SABMiller by Anheuser-Busch, (Nov 20, 2014)

By Greg Hammond, J.D.

The American Antitrust Institute (AAI) has expressed its opposition to the rumored merger between the two largest beer brewers in the world—Anheuser-Busch InBev (ABI) and SABMiller (Miller)—in a letter to William J. Baer, Assistant Attorney General in charge of the Department of Justice Antitrust Division. “To say the antitrust issues are significant would be an understatement,” the AAI warned, noting that consumers could expect higher prices and reduced varieties of products if the speculated merger is allowed.

ABI is the largest brewer in the world, holding a 40 percent share of the national market by sales value and 50 percent share by sales volume. It sells some of the most popular brands, including Becks, Budweiser, Labatt, and Stella Artois. Similarly, Miller is the second largest brewer in the world, holding a 25 percent share of the national market by sales value and a 30 percent share by sales volume. Miller also sells a number of popular beer brands, including Coors, Miller Lite, and Peroni. The resulting “behemoth” corporation would hold a 65 percent by sales value and 80 percent by sales volume share of the national market, according to the AAI.

“The merger would raise major competition concerns in the United States,” AAI President Albert Foer and AAI Special Counsel Sandeep Vaheesan wrote. “It would eliminate competition between the two biggest brewers in the United States and the world.”

As a result of the merger, Foer and Vaheesan note that ABI would hold even more control of beer distribution and retail channels, and the company could ultimately use this power to undermine the continued emergence of craft beer—which has and continues to provide Americans with greatly increased beer choice. “The probable result for consumers would be higher prices and diminished non-price competition in the beer market,” the letter stated.

“If ABI pursues this acquisition, the DOJ should investigate the merger carefully, and should treat the efficacy of any conventional divestiture with exceptional skepticism,” Foer and Vaheesan wrote.

The American Antitrust Institute is an education, research, and advocacy organization working to increase the role of competition, assure that competition serves the interests of consumers, and challenge abuses of concentrated economic power in the American and world economy.

Companies: Anheuser-Busch InBev; SABMiller

News: Antitrust