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Anheuser-Busch InBev could control over half of the US beer market soon

Discussion in 'Beer News' started by Todd, Jul 3, 2012.

  1. Todd

    Todd Founder (1,515) Colorado Aug 23, 1996 Staff Member

    And the biggest keeps on getting bigger ...
    According to the article, AB InBev controls 47.7% of the US market already. This deal would add another 6%, resulting in a single company controlling 53.7% of the US market.

    Read the rest from Time Business by Josh Sanburn:
    http://business.time.com/2012/07/03/one-company-will-soon-control-half-of-the-u-s-beer-market/

    Related links:
    Anheuser-Busch InBev buys Grupo Modelo for $20 billion (Bloomberg News)
    Anheuser-Busch InBev grabs hold of Corona (The St. Louis Post-Dispatch)
     
  2. FYI - I believe that the anti-trust laws require a 75% market share before even considering regulatory involvement. In addition, the law takes into account how the market share was obtained, i.e. fairly or unfairly. We all can weigh in with our opinion about AB-InBev's fairness in their business dealings, but alas, our votes won't count. Only the bureaurocrats in DC [and the lobbyists that pay them] votes count.
     
    movingglass likes this.
  3. Drewskis

    Drewskis Disciple (55) Jun 20, 2012

    Will continue to not purchase any of their products and keep supporting the microbeweries as long as I can. Why worry about shit you can't control. Good to know, though.
     
  4. The DoJ made Anheuser-Busch sell the American Brewing Co., of Miami, FL. over anti-trust violations back in the late 1950's when A-B had less than 10% of the US market (and less than 1/3 of Florida's), and they had to get DoJ approval after that before buying any other brewery. The brewery itself, known for the "Regal" brand, was then purchased by National of Baltimore.

    More recently, InBev had to sell the rights to the Labatt brand in the US and stop brewing it for export here as part of the deal to allow them to buy A-B.

    Many other brewery deals have been knocked down over the years for similar reasons, most not even involving A-B (the US's largest since the mid-50's), like Schlitz-Heileman in the early '80's and the second Pabst-Heileman a few years later, and a rumored Stroh-Coors in the late '80's was dropped because of fear it wouldn't be approved by the DoJ.
     
    CooperEllis and beertunes like this.
  5. Yes all true, but look at your timeline. Other than the InBev/A-B deal, all of your other examples are at least 20 years old. Times have changed and the government seems to be much less interested in curtailing business dealings, the Democrats lest they be criticized for being anti-business and the Republicans cause they are pro-business. It now appears as if InBev is going for lots of smaller brewers instead of one big one.
     
  6. So sad that Goose Island has been bought by this group.
     
  7. The Anti-Trust Division of the DoJ also investigated the joint venture/merger of Miller and Coors in the US by their parent co's (SABMiller and MolsonCoors) in 2008 before approving it, and that combination obviously was not going to be anywhere near the 75% market share figure you quoted as necessary "before even considering regulatory involvement".
     
    beertunes likes this.
  8. Jason

    Jason Founder (1,365) Massachusetts Aug 23, 1996 Staff Member

    Q1 of 2008 AB had around 50.9% share of the market ... this was lost due to many reasons, the biggest from the buyout. Now they are simply trying to regain those numbers through buyouts. A plan that will fail them in the end IMO.
     
    cavedave and Centennial like this.
  9. Nah, if AB-InBev gains more market share in the US (even if they're claiming that they'll have "no control" over the Modelo brands in the US since they're selling the other half of Crown to co-owner Constellation as a way to avoid DoJ Anti-Trust concerns), then we all lose.

    Hey, I agree that the DoJ's Anti-Trust moves in the brewing industry over the years has been confusing and, more importantly, pretty ineffective. (Huh, they didn't let Pabst buy Blatz? They didn't let Heileman buy Schlitz? WTF difference would those deals have made?)

    Some brewery historians suggest that preventing A-B from buying other brewers and breweries is what HELPED them maintain their #1 spot and then grow their share of the market large enough to be out of the range of any other brewer at this point.

    While most of the other big national breweries (Schlitz, Heileman, Falstaff, Pabst, Carling-National, Stroh, etc) "grew" by buying inefficient 19th century era, often urban, breweries, A-B wound up with a chain of nice new shiny, automated super-efficient "green field" breweries because they were forced to built, not buy. They were selling their beer for "premium" prices while their competitors were trying to compete by underselling them. All the while AB's total cost per barrel was probably much less than the "cheap beer" brewers'.
     
  10. If they're based in Belgium does that make them a foriegn business? That would seem to contradict the all-American image Macro beers like to promote.

    I love foriegn beer, but I feel like I support domestic jobs/economy when I buy from U.S. Craft/micro breweries.
     
    SortaAmbivalent likes this.
  11. davey101

    davey101 Initiate (0) Connecticut Apr 14, 2009

    Well its still being brewed in the good 'ol U S of A by American workers.

    But the "muricaaaaa" image they market is kind of ironic.
     
  12. leedorham

    leedorham Champion (835) Washington Apr 27, 2006

    IIRC AB had at least some employee ownership and bragged about it on commercials. Anyone recall that or have any idea what percentage employee-owned they are?
     
  13. Giovannilucano

    Giovannilucano Savant (450) Wyoming Feb 24, 2011

    From my point of view, this kind of shit makes me feel like being a human is shameful. That big companies have a greed disease, and over look beer: the passion and pride of many countries in the world is reduced to greedy, sick men who gain a high or hard on for money!

    I am proud that I have the passion and humbleness for the love of beer, its tradition and all those who work hard to make it!
     
    pixieskid, cavedave and gigaknight like this.
  14. jivex5k

    jivex5k Advocate (650) Florida Apr 13, 2011

    I won't be supporting them.
    Vote with your wallet! Spread craft beer awareness!
     
  15. rlcoffey

    rlcoffey Savant (490) Kentucky Apr 20, 2004

    Toyota makes cars in my state made by American workers.

    I dont think anyone considers them American cars.
     
    squirrely2005 likes this.
  16. davey101

    davey101 Initiate (0) Connecticut Apr 14, 2009

    That wasn't my point. My point was that when you buy their beer you are supporting the American work force.
     
    Brew33 likes this.
  17. Not really in this case, seeing as the thread is about AB-InBev buying Mexico's largest brewer, Grupo Modelo ;)

    OTOH, can't get more American these days than Bass Ale and Beck's Bier (well, wait- sure you can...).
     
  18. Bitterbill

    Bitterbill Poobah (1,145) Wyoming Sep 14, 2002

    Do you think you can convince people not to buy Goose Island beers? :rolleyes:
     
  19. MaineMike

    MaineMike Savant (290) Maine Jan 22, 2011

    Who cares? 50% of a market in which 90% of the product is crap that none of us drink. This wont change anything.
     
    Gash, brethartt and BrewCityBB like this.
  20. JediMatt

    JediMatt Aficionado (210) Iowa Jun 18, 2010

    I don't buy them anymore. I love their beers, but I refuse to support AB's business practices.
     
    pixieskid likes this.
  21. Todd

    Todd Founder (1,515) Colorado Aug 23, 1996 Staff Member

    It would actually be over 50%, and saying that 90% (actually 94%) is crap, and that none of us drink it, would be a gross exaggeration. And if you don't think this deal will change anything, I recommend reading the articles.
     
  22. And craft beer is made by a non-American work force?
     
    Rutager likes this.
  23. CellarGimp

    CellarGimp Savant (475) Missouri Sep 14, 2011

    This acquisition results in approximately zero percent share gain of my wallet.
     
    Gash likes this.
  24. jivex5k

    jivex5k Advocate (650) Florida Apr 13, 2011

    Look how many craft labels Busch owns:
    • Goose Island Beer Co.
    • Kona Brewing Co.
    • Ray Hill American Pilsner
    • Starr Hill Brewing
    • Fordham Brewing
    • Dominion Brewing
    Don't buy these brands!
     
    JimKal likes this.
  25. MaineMike

    MaineMike Savant (290) Maine Jan 22, 2011

    True, I didn't put a lot of thought into my statement and I'm not an expert in big business. I stand by my opinion that most of the folks using this sight aren't drinking a ton of AB with the exception of the craft breweries they own, and even those would represent a very small portion of the 6%.
    As far as the deal not changing anything, what I meant is that I don't see it negatively affecting craft beer. If its true that such a deal could cause AB's prices in the market place to rise, that could only help craft beer, right?
    Of course AB carries a big stick in the market place and its only going to get bigger. Craft beer will continue to thrive regardless of the giants that choose to corner the market and dominate through acquisitions and marketplace bullying.
     
  26. Good luck trying to convince the hypocrytical BA crowd from jizzing over the GI barrel aged stuff, while they whine about corporations....

    I 'm actually looking forward to ABI getting into the craft game in full. They undoubtedly have the brewing talent & resources to do so....& do it at a reasonable price point. This is a huge threat to the $10 lackluster bomber crowd...which IMO needs an attitude adjustment from the market & will get it.
     
    jacksback, gpcollen1 and Brew33 like this.
  27. Anheuser Busch does obviously own Goose Island and it's brands, but they simply own a minority share of the parent companies of most of the others- Kona's Craft Brew Alliance, Dominion's Coastal Brewing Co. (a 49/51% joint venture with Fordham) and Starr Hill. They also distribute those breweries' brands through their wholesale network as part of those deals.

    Ray Hill was a contract brewing arrangement (unusual for AB) that included another 49/51% JV deal, which ended in October, 2009. After that bottles of Ray Hill have come from The Lion in PA and, later, Weston Brewing of MO but the company is apparently dormant according to this article.
     
    Ranbot likes this.
  28. frazbri

    frazbri Advocate (635) Ohio Oct 29, 2003

    You have a lot more faith in ABInbev than I do. It's not that I believe their brewers can't make great beer, but I don't think the corporate structure is designed for it's production and sales.
     
  29. robconoclast

    robconoclast Aficionado (155) Ohio Jun 22, 2012

    Hasn't AB InBev's stocks been hurting the last few years though, despite their aquisitions ?
     
  30. Doesn't look like it https://www.google.com/finance?client=ob&q=NYSE:BUD and then click on 1y or 5y options. They're up over 27% year to date.

    Their US market share by volume has been down, tho' - 2010 - 47.7% v. 2011 - 46.9%, as well as their total shipments down over 3m bbl. in that period, according to BMI
     
  31. rlcoffey

    rlcoffey Savant (490) Kentucky Apr 20, 2004

    I was going to make a comment about the spike in price in 2008 due to the buyout but realized that google needs to fix their charts instead. Other sites dont show BUD back that far, because that was an entirely different company and shouldnt be included on same graph.
     
  32. I must say that i didn't read all the comments but in the grand view who cares if the Big two merge? Some will say that the prices of hops and barley, etc will go up. But between the two right now if they want that to happen they can. But they will buy every craft brewery. Either one can do that now too. But they can get into the craft beer game. News flash they have already, buying up the breweries that will sell to them. So let them merge. Now in my crazy thinking, lets say they can't buy miller/Coors together which means that one half would have to be sold. I would love to see some craft brewery (other than Boston beer company) purchase this, and produce some great craft beer in great amounts. Why? Just to see if it can be done. Or better yet, let the craft beer community own a vested interested in the brewery and let the people own it, and vote on what should be brewed. ah what do I know, must be the beer talking.
     
  33. I do, also Hondas from Ohio,BMWs from SC ect ect ect
     
    BrettHead likes this.
  34. Ungertaker

    Ungertaker Savant (460) Minnesota Apr 30, 2010

    There are two ways any of us can make an impact on this:

    1. Put your money where your loyalties lie. If you don't agree with what a company is doing, don't but their products.

    2. Call or email your elected officials. This might sound crazy, but don't stop there. Get involved politically. The people who are in office were not born into office. They all had to start somewhere. If those of us who care enough about any issue step up and make our voices heard at the caucus level, those who ascend will know who we are. Heck, one of us may even end up in an elected office. Complaining on a beer-related forum is going to do nothing to change the way the game is played. Let's get out there and make a difference!
     
  35. $10 bomber? Im not even surprised by bombers upwards of $12 and 750s upwards of $15.
     
  36. Neither is calling or emailing elected officials, just saying they are bought and paid for.
     
    otispdriftwood likes this.
  37. Pete0714

    Pete0714 Aficionado (150) Indiana May 18, 2011

    Rallying cry of the craft brewers: "They may take our markets, but they'll never take..OUR FLAVOR!!!!"
     
    whendeathsleeps likes this.
  38. For most BA's, located in the US, their elected officials have little control over a Belgium-based company buying the other half of a Mexican brewing company they don't already own. AB-InBev has already sold Modelo's half of the US importer Crown, and claim they will have no "control" over the marketing of Corona and the other brands. Tho' that's already in some dispute, given that ABInBev will still control the wholesale pricing, obviously and some analysts are suggesting that the DoJ make AB also divest of some of their US brands.

    Still, that's about all the US officials can do, beyond a deal similar to the Labatt deal when InBev bought A-B (sell the US brand to NAB, have it brewed by a non-AB-InBev company) - which could wind up benefit Heineken, owners of the #2 Mexican brewery, Femsa.
     
  39. #2 in the US, MillerCoors, is a joint venture between 2 multinational brewing conglomerates, SABMiller and MolsonCoors. The likely, or at least rumored, AB-InBev target for it's next big purchase is SABMiller. The speculation has always been that the most likely purchaser of the Miller brands and breweries in the US (to satisfy the antitrust regulators in the Dept. of Justice) would be the minority owner of MC in the US, MolsonCoors.

    With the collapse of the "other" Big Brewers in the US in the past two decades (Stroh, Heileman and Pabst - the latter now a "virtual" brewery) there has been a number of large breweries available (maybe over a dozen) and, save for BBC's purchase of the eastern PA brewery (Schaefer>Stroh>Pabst>Diageo) that once was listed at 6m bbl/yr capacity, none of them were purchased by craft brewing companies. They were all just too big for craft breweries to consider (and some, like Blitz Weinhard and Rainier, were relatively "small" compared to today's macro-sized breweries). Even the BBC Schaefer plant is being run at less than original capacity and they don't even brew full batches - the brewhouse was designed for 1000 bbl. batches and BBC only does 600-700 bbl. at a time.

    The MillerCoors breweries are, if anything, even larger than those of the companies noted above - all with 7-11 million barrel capacities IIRC. That would be capacity equivalent to over 50% up to100% of all the craft beer sold in the US owned by one (non-BBC) company. Just wouldn't make financial sense for any one craft company to consider buying that large a facility with their current sales all under 1m bbl./yr.
     

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