CBA Votes to Merge with Anheuser-Busch InBev

Discussion in 'Beer News & Releases' started by officerbill, Feb 26, 2020.

  1. officerbill

    officerbill Zealot (504) Feb 9, 2019 New York
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    Craft Brew Alliance Shareholders Vote in Favor of Merger with Anheuser-Busch InBev
    The marriage of Craft Brew Alliance (CBA) and Anheuser-Busch InBev cleared another hurdle today as shareholders of the Portland, Oregon-headquartered craft beer maker voted to approve a sale of the company to the world’s largest beer manufacturer.
    ““By joining with A-B, we look forward to accelerating the potential of CBA’s distinctive portfolio, led by Kona Brewing Company as a truly distinctive lifestyle brand, while continuing to invest in our local communities.”

    https://www.brewbound.com/news/craf...-in-favor-of-merger-with-anheuser-busch-inbev
     
  2. jesskidden

    jesskidden Poo-Bah (2,005) Aug 10, 2005 New Jersey
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    As noted, they still have to get approval from the Department of Justice.
    Department of Justice Asks Craft Brew Alliance and Anheuser-Busch InBev for More Information Ahead of Merger

    Part of the agreement between the DoJ and AB which allowed the purchase of SABMiller (after Molson Coors bought the rest of the US MillerCoors division they didn't own) included this clause:
    People tend to forget that, with all it's problems (like the collapse of the Widmer and Redhook brands along with the minority AB ownership) CBA was the 12th largest brewery in the US.
     
  3. officerbill

    officerbill Zealot (504) Feb 9, 2019 New York
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    Craft Brewing Business has an article about the vote that includes quotes from the DoJ agreement (https://www.craftbrewingbusiness.co...ders-approve-anheuser-busch-full-acquisition/)

    “The settlement also prohibits ABI from instituting or continuing practices and programs that limit the ability and incentives of independent beer distributors to sell and promote the beers of ABI’s rivals, including high-end craft and import beers”
    It looks like DoJ's 2016 settlement is primarily concerned with distribution and market access.
    Does CBA have interests in any distributors?
     
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  4. spicoli00

    spicoli00 Defender (640) Jul 6, 2005 Indiana

    Purchase price will be will above the HSR threshold for DoJ/FTC review so it would have been reviewed anyways. Having been through the process numerous times, you'd be surprised what you can get away with if the administration is favorable, which it is now. They've got fancy lawyers that know all the angles. I'd argue the craft beer market is totally separate from the macro market and that Bud's craft division plus BREW is only a small fraction of the craft market. that's one angle at least. Acquisition approved with no conditions.

    EDIT: Current HSR threshold is only $94M
     
    #4 spicoli00, Feb 26, 2020
    Last edited: Feb 26, 2020
  5. jesskidden

    jesskidden Poo-Bah (2,005) Aug 10, 2005 New Jersey
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    No, they've used AB's distribution network since before the merger of Redhook and Widmer that created CBA and that distribution deal was often touted by those two companies as a primary reason for selling AB a minority share of their company.

    That language about the distributors was a result of concerns by some (like the Brewers Association) of recent purchases of AB independent distributors by AB and their habit of rewarding distributors that didn't carry competing brands, etc., around the same time as the SABMiller deal.
    Yeah, it ain't like the old days when AB was forced to sell the American Brewing Co. of Miami and Pabst had to sell Blatz in the late 50s-mid 60s and all sorts of mergers/purchases were prevented by, or simply fear of, the DoJ. Even into the 70s-80s, abandoned mergers like Coors-Stroh, Pabst-Carling/National, Heileman-Schlitz, Pabst-Schlitz, due to fear of the Anti-Trusters..

    Wasn't suggesting that there was much of a chance that they'd prevent the deal, only hold it up for a bit longer.
     
  6. spicoli00

    spicoli00 Defender (640) Jul 6, 2005 Indiana

    It's DoJ's prerogative to do the dreaded "second request" :open_mouth::rolling_eyes::joy:
     
  7. MNAle

    MNAle Poo-Bah (1,829) Sep 6, 2011 Minnesota
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    Does anyone here honestly think this "merger" (i.e. takeover) will be harmful to consumers?

    If so, I'd like to hear how.
     
  8. jmdrpi

    jmdrpi Poo-Bah (6,820) Dec 11, 2008 Pennsylvania
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    Every additional brand that AB owns, allows them to strong-arm another tap handle or shelf spot in your local bar or store that could have gone to a better tasting beer.
     
  9. MNAle

    MNAle Poo-Bah (1,829) Sep 6, 2011 Minnesota
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    True, but the additional market power of the Kona brand is pretty small on a nationwide scale.
     
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  10. Scott17Taylor

    Scott17Taylor Poo-Bah (1,778) Oct 28, 2013 Iowa
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    I agree, but I’m honestly more worried about seltzer’s taking beer space right now. There’s already been a ton of shelf space taken by AB “craft” brands and if they really wanted more they could just release more SKUs under the same brands they already own.
     
  11. traction

    traction Zealot (561) Dec 4, 2010 Georgia
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    I've noticed a handful of seltzers offered by regional breweries such as Trimtab's RECWater available on tap at a local bar that also does growler fills. The crazy thing is that the ones I have seen are priced as much as an average craft beer. I wonder how many people will actually drop $7 on a pint of what is essentially vodka water.. The place I have seen it just tapped the kegs the other day I have a feeling they are going to be around for awhile. I'm not a fan of seltzer to begin with but if you are going to sell it at least sell it for a fair price. The stuff I have seen in stores in 12 packs is much cheaper than I have seen it available on tap. Regardless of price I really don't like the idea of this stuff taking up handles in the tap room like it already takes up shelf space in the stores.
     
  12. Scott17Taylor

    Scott17Taylor Poo-Bah (1,778) Oct 28, 2013 Iowa
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    I personally like seltzer, but don’t really buy the alcoholic ones. I can see the appeal for people who don’t like beer to have something alcoholic that doesn’t really taste like it, they’re here to stay.

    I think prices of drinks kind of have a floor in bars anyway. How many times do you get a beer that’s a $10 six pack and one pour is $5-7? Yeah I’m worried about them taking tap and shelf space for sure.
     
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  13. dcotom

    dcotom Poo-Bah (2,449) Aug 4, 2014 Iowa
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    And the boycott list keeps growing...
     
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  14. Ranbot

    Ranbot Defender (636) Nov 27, 2006 Pennsylvania

    Yeah. It's so easy and cheap to add a splash of tasteless alcohol for a DIY hard seltzer. It's a drink of convenience, but so marginal that I don't understand why anyone spends money on it. And I actually really like and regularly drink seltzer, but I won't buy hard seltzer.
     
  15. officerbill

    officerbill Zealot (504) Feb 9, 2019 New York
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    Yeah, if I'm drinking seltzer it's because I don't want alcohol.
     
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  16. invertalon

    invertalon Devotee (474) Jan 27, 2009 Ohio
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    Any bar, restaurant or other place I step foot into has more variety with non-macro owned breweries than ever before. I don't really see any strong-arming going on anywhere in my experience at least.

    Does anyone see the opposite?
     
  17. jmdrpi

    jmdrpi Poo-Bah (6,820) Dec 11, 2008 Pennsylvania
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    It's mostly hotel & airport bars, chain restaurants, sporting & music venues, etc. Where the only "craft beer" options are Goose Island, Devils Backbone, Bluepoint, Golden Road. Where in the past those slots would have been national or regional craft beer brands.
     
  18. rgordon

    rgordon Meyvn (1,059) Apr 26, 2012 North Carolina

    William Beer, I mean Barr, will get right on that one. Business as usual everywhere, no surprises anywhere.
     
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  19. chimneyjim

    chimneyjim Initiate (169) Jun 23, 2004 Oregon

    YES. Seeing a lot of 10 Barrel, Elysian, Hop Valley ("captive" AB-InBev brands) on tap and on the shelves. Seems like its getting more difficult to find independently produced beers outside of specialty beer venues.
     
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  20. jesskidden

    jesskidden Poo-Bah (2,005) Aug 10, 2005 New Jersey
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    Interesting twist to AB's takeover of CBA - one that I can't recall industry pubs. discussing even tho' AB-InBev's agreements with the DoJ after both the SABMiller and Grupo Modelo takeovers did try to limit AB expansion in the US without DoJ approval.

    BREWBOUND:
    CBA to Divest of Kona Brewing’s Hawaii Operations in Effort to Clear Regulatory Hurdles for A-B Merger
    Kinda weird how Dave Peacock (who, lets face it, should be working for NBC :grin:) is involved. Peacock took over the AB presidency from Busch IV with the InBev takeover.

    Even in the InBev period, there's a certain "incestuous" relationship among the AB and former AB execs, etc. Was a common feature of the Busch-era AB, of course - execs and Busch family members being rewarded with AB wholesale distributorships (aka "licenses to print money" in the last half of the 20th century), etc.
     
  21. MNAle

    MNAle Poo-Bah (1,829) Sep 6, 2011 Minnesota
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    So, a former craft brewer's brand (Kona) is now has split ownership / distribution rights based on geographic region.

    Is this a first for a former craft brand?
     
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  22. jesskidden

    jesskidden Poo-Bah (2,005) Aug 10, 2005 New Jersey
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    With thousands of craft brands and some pretty odd twists and turns during the approx. 4 decades of "craft" beer, there's often some oddball situations but I'm still gonna say "Yeah, probably". Of course, similar situations have occurred for non-craft brands - ABInBev's Labatt brand controlled by FIFCO USA in the US, Corona and the other AB-InBev Grupo Modelo brands US rights owned by Constellation...

    I seem to recall something similar (maybe?) happening with one of the smaller CBA brands - Cisco, maybe? And, initially, the Goose Island brewpubs in Chicago remained under Hall family ownership after GI was bought.

    Of course, it's been awhile since Kona was Brewers Assoc. Recognized as "Craft", since they had been partially owned by CBA since 2010 and had some business connection to Widmer even before the Redhook/Widmer merger than created CBA. I'm pretty sure that in the beginning CBA's Kona ownership was under the B.A.'s 25% limit, so it might take some digging for the exact year Kona lost the "craft" designation.
     
  23. DudeBeerYaBro

    DudeBeerYaBro Initiate (183) Nov 3, 2014 California
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    There are 10 dollar six packs?
     
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