Just as the prophesies foretold, in the not too distant future, a bland beer brewing monolith would emerge on the horizon, comprised of many other brewing companies, both large and small. That imposing figure would be hastily dubbed Beer Voltron. And it would attempt to rule the beer drinking and distribution worlds.
Well, that day for the U.S. is officially today. Regulators have approved the AB InBev acquisition of SABMiller, contingent upon the sale of SABMiller’s U.S. business. Miller Lite and High Life will jump back to the Molson Coors yacht – keeping AB and MillerCoors competitive at least here in the U.S. This was all pretty much expected.
But this deal is not full of future market monopoly dread for the craft beer industry, or at least shouldn’t be. As part of this agreement, Beer Voltron must seek a Department of Justice review of any future acquisitions of beer distributors or craft brands. Also, there is a condition that will prevent AB InBev from running its ridiculous incentive programs that work to encourage distributors and retailers to sell its products while avoiding craft beer. Cool, if true.
Here’s what the Brewers Association had to say about the deal:
“Today’s decision by the Department of Justice (DOJ) to approve the acquisition of SABMiller by ABI stipulates many of the safeguards the Brewers Association requested to preserve fair competition and access to market for America’s small and independent craft brewers.
“While we continue to believe that the merger of the world’s two largest brewers is bad for both the beer industry and consumers, the DOJ’s significant requirements, including the termination of incentive programs such as the Voluntary Anheuser Busch Incentive for Performance Program (VAIP), a cap on ABI’s self-distribution volume and other measures to protect distributor independence, appear to address some of our major apprehensions with the merger. With effective enforcement of these provisions, small brewers can rely on their independent distributor partners to access the market. This will help ensure that beer enthusiasts can continue to enjoy a vast variety of options from the more than 4,600 breweries in the U.S.
“The Brewers Association will closely examine the consent decree and compliance with its provisions, as well as monitor ABI’s actions, specifically with regard to the acquisition of independent craft brewers. We remain concerned about how past, pending and future acquisitions may shift the dynamics of the current beer market. We will continue to encourage the DOJ to monitor and, where necessary, take action to remedy any anti-competitive effects of ABI’s behavior in the U.S.”
Molson Coors will pay $12 billion to acquire AB InBev’s 58 percent stake in MillerCoors and will make and sell Miller Light and Coors Light, in the U.S., and will have the rights to the Miller brand outside the U.S.