USA: US biggest craft brewer D.G. Yuengling & Son voices opposition to pending AB InBev, SABMiller merger

D.G. Yuengling & Son, the US largest craft brewer, is voicing opposition to the pending $103 billion merger of Anheuser-Busch InBev and SABMiller PLC, which is expected to close on October, 11, St. Louis Business Journal reported on October 7.

Pottsfield, Pennsylvania-based Yuengling wrote a letter to the U.S. Justice Department this week opposing the agreement that cleared the way for the deal to close, The Morning Call reports.

As part of its agreement with the Justice Department, AB InBev agreed to divest SABMiller's entire U.S. business, including its ownership interest in MillerCoors, and to refrain from limiting the ability and incentives of independent beer distributors to sell and promote the beers of its rivals. However, in its letter to the Justice Department, Yuengling claims the agreement doesn't do enough to limit the merged entity's influence on beer distribution channels in the U.S.

"Yuengling considers recent events and the proposed merger as one of the biggest threats to its existence, short of a second round of Prohibition," the company said in the letter.

Yuengling claims AB InBev has fought the craft brewer's expansion into some areas such as Mississippi by putting pressure on distributors who are dependent on AB InBev for much of their sales, Morning Call reports. The company is asking the Justice Department to reconsider its settlement or impose further restrictions on the merged entity's influence on distribution channels.

Shareholders of both AB InBev and SABMiller voted last week to approve the deal, which would create a merged business that will generate about $55 billion in revenue and produce nearly a third of the worldwide beer market.

06 October, 2016