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Will AB InBev and Heineken monopolize the Mexican beer market?

July 10, 2013Keith Gribbins

corona beer bottle on a beach
AB InBev bought Grupo Modelo and its beer brands like Corona Extra, the No. 1 imported beer in America. To avoid antitrust concerns, Grupo Modelo and AB InBev have sold their distribution rights in America, but not in Mexico.

We reported in June that Anheuser-Busch InBev (AB InBev), the largest beer roll-up in the world, completed its $20.1 billion purchase of Grupo Modelo, S.A.B. de C.V., buying the rest of the company that it did not already own. The U.S. Justice Department filed a lawsuit to block the merger of these two giant beer companies, saying the deal would limit competition and lead to higher prices for American consumers, causing AB InBev to sell its Grupo Modelo distribution rights to Constellation Brands. But Mexico has not been so lucky— at least not yet.

Local Mexican craft brewers and beer companies from around the world are eagerly waiting for Mexico’s antitrust regulator to make a decision on the Grupo Modelo purchase. Since AB InBev took over the Mexican brewery (which owns brands like Corona, Modelo and Pacifico), it is estimated that it now owns 55 percent of the Mexican beer market. Meanwhile, Heineken, the third largest beer maker in the world, owns Mexican brewery Cuauhtémoc Moctezuma (which makes Dos Equis and Tecate brands), accounting for about 43 percent of the country’s beer volume. These two giants combined have 98 percent ownership of Mexico’s beer market. According to an article on the Daily Meal:

The coming ruling on the lawsuit will show whether the Anheuser-Busch InBev and Heineken International’s Mexican duopoly of Mexican beer can keep exclusivity agreements with corner stores and restaurants. If the regulator finds that they cannot keep such agreements, smaller competitors could establish a larger presence in the Mexican beer industry.

SABMiller, the second-largest beer company, currently has only one percent of Mexico’s beer market, which it dedicates to small brands and craft brewers. Since Mexico is the fifth highest consumer of beer in the world, the company finds it imbalanced that the Mexican beer market is governed by a duopoly. For this reason, smaller brewers filed the lawsuit. The beer renaissance that is taking place in America could trickle down to Mexico if this lawsuit goes in favor of SABMiller, who would be able to distribute and advertise its small, craft breweries more successfully.

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  1. jaramx says

    July 10, 2013 at 3:38 pm

    RT @CraftBrewingBiz: Will AB InBev and Heineken monopolize the Mexican beer market? http://t.co/jPr4VNuOdO

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