First off: We don’t really think a week-old keg of Budweiser would actually be that flat (if kept properly), but we understand the simile that contributor Charles Sizemore is employing in his excellent Forbes article posted Friday. The big domestic brands in the U.S. beer market have suffered over the last few years and will continue to lose market share in 2013 — at the hands of craft brewers.
We quote the article: “American domestic beer sales rose slightly in 2012 after falling for three straight years. And within the domestic beer space, the growth is in high-end microbrews … Generation X — my generation — still likes a good beer. But we’re a small lot and we prefer microbrews when we can get them … Big Beer knows that the domestic market is dead, which is why AB InBev, SABMiller and Heineken have gone on an emerging market buying spree over the past decade.”
We encourage you to read the whole article, which was prompted by the recent power moves of Anheuser-Busch InBev, which is trying to circumvent antitrust objections surrounding its plans to buy the 50 percent of Grupo Model that it doesn’t already own (a Mexican beer conglomerate, home to America’s No. 1 import Corona Extra).
Last week, AB InBev stock shot up 5 percent on speculation that the U.S. Department of Justice might let AB InBev acquire Grupo Modelo after a few small revisions to the deal were made. Those revisions included selling Grupo Modelo’s joint venture with Constellation Brands (called Crown Imports LLC), which will divest AB InBev’s rights to distribute Modelo brands in the United States (among other things).
Of course the deal would make Constellation Brands Inc. and Crown Imports the No. 3 producer and marketer of beer in the United States, which caused Constellation’s stock to shoot up a whopping 37 percent last Thursday. That prompted us to ask: Is the U.S. beer market flatter than a week-old keg of Budweiser? Apparently a lot of investors don’t think so.
Shad Bowman says
Shad Bowman liked this on Facebook.