E-Malt.com News article: USA: AB InBev-SABMiller merger will hardly affect US beer distributors

The world's largest brewers — Anheuser-Busch InBev and SABMiller — announced earlier this week that they've agreed to merge, but the mega-deal likely won't have many impacts on the US beer distribution chain, South Bend Tribune reported on October 16.

Analysts who follow the beer industry assume the merged company will need to sell its interest in MillerCoors, a joint venture between SABMiller and Molson Coors Brewing, to satisfy federal regulators' antitrust concerns. AB InBev and SABMiller, combined, already control 70 percent of the U.S. beer market.

For that reason, local beer distributors aren't concerned about the merger affecting their businesses.

"We do not anticipate major changes locally at all," said Jon Leetz, president of Indiana Beverage, a Valparaiso company that distributes MillerCoors beers and other products.

"Because Anheuser-Busch is so big from an antitrust standpoint," Leetz said, "it is not likely that the Department of Justice would allow them to own SABMiller in the United States."

The $106 billion merger isn't really about the U.S. market anyway.

AB InBev's primary motivation for purchasing SABMiller is to gain access to beer drinkers in Africa, Latin America and other parts of the world. The merged company would control about a third of the global beer market.

"I don't foresee anything changing at our business," said Steve Infalt, executive vice president at South Bend-based United Beverage Co., which is affiliated with Anheuser-Busch products.

"This is mostly a global-positioning situation for Anheuser-Busch," Infalt said. "They're more interested, I believe, in Africa and South America and China."

Infalt said the most likely outcome is that Denver-based Molson Coors, which already owns a 42 percent stake in MillerCoors, will buy SABMiller's remaining share of the joint venture. That scenario would give Molson Coors control over a quarter of U.S. beer sales and leave AB InBev with about 45 percent of the U.S. market.

All of the large beer companies have been losing market share in recent years to small craft brewers — a trend that is playing out in Michiana as well. More than 20 small breweries are operating in northcentral Indiana and southwest Michigan, and many of those have opened in just the past few years.

Craft beer accounted for 11 percent of U.S. beer sales in 2014, up from about 8 percent of sales in 2013, according to the Brewers Association.


16 October, 2015