WASHINGTON — The CEO of Anheuser-Busch InBev told a Senate committee Tuesday that the company’s merger with SABMiller will allow it to better compete in foreign markets and to extend “the reach of iconic brands such as Budweiser to new markets.”

“Put simply, the purpose of this transaction is to enhance our ability to serve new markets, particularly in Africa, Asia, and Central and South America,” Carlos Brito told the Senate Judiciary subcommittee on antitrust, competition policy and consumer rights.

But the CEO of the National Beer Wholesalers Association – with some skeptical senators agreeing – said the proposed merger would “upset the equilibrium” of the global beer market, put too much profit in one beer industry producer, and enhance AB-InBev’s ability to influence distribution to the potential detriment of smaller craft brewers.

“If the proposed deal closes, 57 percent of the world’s global beer profit would fall within the ABI and SAB combination,” Craig Purser said. “By comparison, Heineken, the next largest global competitor, is at 11 percent, and Molson Coors, the largest U.S. competitor to ABI-SABMiller, would be just under 3 percent of that same global profit pool.”

After weeks of negotiating, the boards of A-B InBev and SABMiller announced last month that they had approved the merger, worth about $108 billion, making it the largest beer merger in history and one of the globe’s largest. The merger between the Belgium-based A-B InBev and London-based SAB Miller could take place the second half of next year if it receives regulatory approval, including from the Department of Justice and shareholder OKs.

But both Purser and Bob Pease, CEO of the Brewers Association, which represents craft brewers, said they were concerned that the merger and the divestiture of its interests to Molson Coors would provide a fresh opportunity for both global companies to influence beer distribution and restrict fledgling micro-brewers’ abilities to expand.


“Our biggest concern is a company like this will use its increased market power” to even further influence distributors, Pease said.

Sen. Richard Blumenthal, D-Conn., the most vigorous skeptic, suggested that Justice Department approval of the merger and divestiture include language protecting small brewers’ access to distributors.

He said a recent trend toward “mammoth beer behemoths” has “not been a happy one for consumers” and has led to higher prices.

“I think this merger has tremendous ramifications for consumers, despite the representations here that there will be no impact on the U.S. market,” he said. ” … We have seen this movie before in the airline industry, to take one, and it may not end all that happily for consumers.”

Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.

filed under: