Megabeer is almost here
October 7, 2015 8:14 AM   Subscribe

SABMiller may have rejected Anheuser-Busch InBev's latest offer, but some analysts think an eventual merger is inevitable.

The merger would place 70% of the US beer market in the hands of a single company, with similar market effects the world over, unless antitrust regulators have something to say about it.

Here is a list of the beer brands owned by the two megaconglomerates.
posted by dis_integration (45 comments total) 3 users marked this as a favorite
 
The merger would place 70% of the US beer market in the hands of a single company, with similar market effects the world over, unless antitrust regulators have something to say about it.

If they don't have something to say about it, why even bother having antitrust regulations?

In what scenario is a merger that consolidates 70% of an industry into a single company not an antitrust issue?
posted by tocts at 8:18 AM on October 7, 2015 [22 favorites]


In what scenario is a merger that consolidates 70% of an industry into a single company not an antitrust issue?

A Neoliberal scenario?
posted by GenjiandProust at 8:20 AM on October 7, 2015 [7 favorites]


In what scenario is a merger that consolidates 70% of an industry into a single company not an antitrust issue?

In the US? Intercity passenger rail transportation.
posted by Rob Rockets at 8:24 AM on October 7, 2015 [1 favorite]


"Alexander Keith’s: Beer from Canada."

"Kokanee: Western Canadian beer."

These are not styles of beer. Also, Alexander Keith's main beer is billed as an "India Pale Ale" here in Canada.

Not saying people can't like it or shouldn't like it, but: if I handed this to anyone who hadn't tried it and said "Here's an IPA," you'd tell me that you were being trolled. It essentially looks and tastes like an otherwise unremarkable macro-brew lager. Not that there's anything wrong with that.
posted by mandolin conspiracy at 8:24 AM on October 7, 2015 [5 favorites]


Based solely on my knowledge of the companies that own breweries in Australia (and then the companies that own companies that own breweries), that's not a remotely complete list.
posted by deadwax at 8:27 AM on October 7, 2015


Keith's: "Those Who Like It...Like It A Lot Well, It's Okay, I Guess. Better than Blue Or Canadian, Anyway.
posted by The Card Cheat at 8:27 AM on October 7, 2015 [7 favorites]


There is no consolidated North American beer market. You can only really discuss their monopoly control on a state by state basis because that's how booze is regulated. Many of the states already have close to monopolistic control at the level of distribution middlemen.
posted by srboisvert at 8:30 AM on October 7, 2015 [7 favorites]


Intercity passenger rail transportation.

Whew! Luckily we were saved from the terrible spectre of cheap, efficient travel!
posted by wenestvedt at 8:31 AM on October 7, 2015 [4 favorites]


How can they have 70% of the market if I don't drink any of them?
posted by Capt. Renault at 8:35 AM on October 7, 2015 [5 favorites]


In the US? Intercity passenger rail transportation.

In fact, while they may have a near monopoly on intercity train travel, they in no way have a monopoly on intercity travel. With buses and airlines both in the mix, the US consumer has many choices for getting from City A to City B.

Trusts are a problem when they have market leverage. Thanks to Megabus/Greyhound, WN/AA/UA/DL, and of course private cars, they have almost no leverage in the intercity travel market, so the fact that they control a huge fraction of the passenger rail travel market isn't an issue.

Plus, they exist *explicitly* because Congress created them, which walks right around the trust issue. See also the USPS, which has a dead lock on first class mail (and the fact, of course, that UPS/FedEX and other in fact offer alternatives to your mail service.)

So, you're point exactly is?
posted by eriko at 8:38 AM on October 7, 2015 [1 favorite]


Huh. From the NYT piece"

...the 27 percent block owned by America tobacco manufacturer Altria

Huh. I mean, I can see the synergy here, but didn't realize big tobacco had a stake like this.
posted by mandolin conspiracy at 8:39 AM on October 7, 2015


Alexander Keith's main beer is billed as an "India Pale Ale" here in Canada.

As it has since 1820, long before "India Pale Ale" meant "Overhopped Dark Garbagewater."
posted by Sys Rq at 8:45 AM on October 7, 2015 [3 favorites]


As it has since 1820, long before "India Pale Ale" meant "Overhopped Dark Garbagewater."

IPAs in the 1820s would have resembled neither "Hipster Bob's Hopacalypse Mouth Fuck" nor "Alexander Keith's India Pale Ale" as brewed today.

More like a Samuel Smith's India Ale, chances are.
posted by mandolin conspiracy at 8:48 AM on October 7, 2015 [7 favorites]


At least with their acquisition of Goose Island, I can have a beer that tastes like beer when I find myself in a corporate chain-restaurant/bar/ball game. A few years ago, my choices were fizzy yellow water or fizzy light yellow water.
posted by thecjm at 8:48 AM on October 7, 2015 [1 favorite]


Simply not going to happen here without some massive divestures from them. When AB InBev tried to acquire Modelo, the third largest, Justice stepped in and said no. There's no way they'd block a 1-3 merger and then let a 1-2 merger go.
posted by eriko at 8:49 AM on October 7, 2015 [3 favorites]


This shouldn't really have much impact on the US beer market since the Miller and Bud brands can't ever merge here, and honestly, these companies are so unfathomably large that I can't really understand what it will mean for the world market, either. A marriage of distribution pipelines, sure, but to what end?
posted by uncleozzy at 8:51 AM on October 7, 2015


As it has since 1820, long before "India Pale Ale" meant "Overhopped Dark Garbagewater."

American IPAs, in particular, West Coast American IPAs. English IPAs -- you know the people who developed the style originally, are not nearly as hoppy, and are generally less hoppy than West Coast APAs.

General rule of thumb -- the farther west the brewery, the hoppier the beer will be.
posted by eriko at 8:51 AM on October 7, 2015


This shouldn't really have much impact on the US beer market since the Miller and Bud brands can't ever merge here, and honestly, these companies are so unfathomably large that I can't really understand what it will mean for the world market, either. A marriage of distribution pipelines, sure, but to what end?

Shelf space, for one. There's a great point in Beer Wars where they discuss how the majors control so much retail shelf space that it crowds out the minors.
posted by NoxAeternum at 8:54 AM on October 7, 2015 [2 favorites]


srboisvert: A duopoly at the distribution level, perhaps. At least within any given market. InBev will not allow their distributors to also distribute SABMiller product, and vice versa. Before the MillerCoors/SABMiller thing happened, Miller and Coors were slightly less hard-line about it, but since the merger they have been pushing their distributors to consolidate.

In some ways, having two big distributors is actually a good thing for the smaller brands, since the distributors are happy to start carrying the smaller brand product and can then push new product on their retailers.
posted by wierdo at 9:00 AM on October 7, 2015 [1 favorite]


Intercity passenger rail transportation.

This is pretty much the text book example of a natural monopoly
posted by dmt at 9:19 AM on October 7, 2015


Regulators put a stop to the T-Mobile and AT&T back in 2011, hopefully they can block this merger.
posted by fragmede at 9:40 AM on October 7, 2015


Monopoly? In Ontario we're living it. These conglomerates own/run the all the retail beer outlets; effectively stunting the craft industry and even dictating the prices charged at the government owned liquor store.
posted by bonobothegreat at 9:46 AM on October 7, 2015 [1 favorite]


It's been a very, very long time since I drank any beer that wasn't local, but this is still bizarre and scary to me.

Fuck Big Beer.
posted by uberchet at 9:52 AM on October 7, 2015 [1 favorite]


...but some analysts think an eventual merger is inevitable.

And, yet, the linked piece doesn't actually say why a merger is inevitable, other than, perhaps, the insinuation that, but of course! there will be a merger. That's what big corporations do.
posted by Thorzdad at 9:54 AM on October 7, 2015


Finally we see the real reason behind the Keystone pipeline.
posted by klangklangston at 9:59 AM on October 7, 2015 [14 favorites]


uncleozzy: A marriage of distribution pipelines, sure, but to what end?

Shhh, don't say "pipelines," it will give them ideas. *shudder*

At least my Jinx was with someone funny.
posted by wenestvedt at 10:02 AM on October 7, 2015 [1 favorite]


Those are different transportation methods though, eriko. The US consumer also has many non-monopolised methods of getting from metro area Soberville to all points along the Drunkington line.
posted by Jon Mitchell at 10:59 AM on October 7, 2015 [1 favorite]


I meant to FPP this when it happened but didn't have the time to craft a post: Fermenting Ideas Of Order, Lagunitas founder Tony Magee's blog of ruminations about craft brewing consolidation, which it eventually turned out was leading up to Lagunitas's sale of a 50% stake to Heineken.

(It's reverse-chronological with page-numbers, not stable permalinks; this is currently the first/earliest post, "Previous" links navigate to more recent posts. Sometimes Tumblr can be really wrong about navigation.)
posted by We had a deal, Kyle at 11:52 AM on October 7, 2015 [2 favorites]


Finally we see the real reason behind the Keystone pipeline.

He shoots and scores! OHH BABY!!!!!

Dude, that was seriously well played.
posted by eriko at 1:06 PM on October 7, 2015 [1 favorite]


The US consumer also has many non-monopolised methods of getting from metro area Soberville to all points along the Drunkington line.

I wish they'd work on the ways back from Drunkington. I'm always worn out, nauseous, and have a massive headache after that trip.
posted by eriko at 1:07 PM on October 7, 2015 [1 favorite]


I really wish George Carlin was still around to do the voices on this train story.
posted by wenestvedt at 4:23 PM on October 7, 2015 [2 favorites]


I'm genuinely surprised that yeungling is lower than sam adams. They're the only remaining independent macrobrew as far as I know.
posted by Ferreous at 4:38 PM on October 7, 2015


And in terms of big corporate mergers - in the late 1990s, Canada's biggest banks proposed a series of mergers.

There was intense public outcry about how this would reduce competition in retail banking. The mergers were blocked by the federal government. Almost 20 years later, these same banks are as profitable as they ever were. The notion of megamergers being somehow economically necessary is an outright lie.

Also, the relatively heavy regulation (as "Schedule I" Canadian banks) they're subject to has protected them from themselves and/or greedy shareholders.
posted by mandolin conspiracy at 5:54 PM on October 7, 2015 [1 favorite]


Well, if it does happen, there'll be one less beer company I'll be giving my money to.
posted by Emperor SnooKloze at 9:02 PM on October 7, 2015


InBev has ruined beer.

Clarification: InBev has ruined easily obtainable foreign beer here in the U.S., because it's not foreign any more, it all comes from the same vats in Pennsylvania or wherever. You think that's Stella, Beck's, Guinness, Bass you're drinking? Think again.

A few years ago I thought I had a physiological or neurological disorder, because it seemed like every beer I drank started to taste like shit.

Turns out it wasn't me at all.
posted by sidereal at 3:51 PM on October 8, 2015 [2 favorites]


Similar to sidereal's point, i've noticed this with "big indie" companies like redhook which, it turns out, is owned by AB inbev.

The stuff marketed under that, and many other "big indie" names(Most recently elysian, which also got gobbled up by AB) doesn't taste ANYTHING like it tasted 5-8 years ago. The bottles don't even look the same! and i don't mean the label, they switched to cutesy "custom" shaped bottles.

I had similar thoughts of "hmm maybe my palette is just changing as i get older" but then i taste some actually good beer, or still-local beer that hasn't changed much and realize no... like some pizza places that have gone down the tubes in quality, it really is just awful and worse.
posted by emptythought at 4:36 PM on October 8, 2015 [1 favorite]


InBev is an indisputable triumph of capitalism and technology. It's also so PhilDickian in its awfulness that I sometimes I can barely look directly at it.

Like some food companies, InBev figured out how to make recognizable and enjoyable high market value things for one tenth of the cost that almost look and almost taste like the real thing out of high fructose corn syrup, artificial dyes and ostensibly harmless organic chemistry fillers that simulate tongue/nose receptor response. Almost identical to the real thing. They're brilliant, I'll give them that. Hostess Twinkies are brilliant, too.

Once everyone is drinking it and extolling its praises (that InBev marketers taught them to say), they can crank the quality down even more. Because it doesn't matter if it's good. It matters if people think it's good.

It reminds me of a scene from the TV series Fringe, later on in the series, where Walter is in the dystopian future and takes a bite of a Twizzler-like stick of a supposedly enjoyable treat, and is utterly repulsed.

WALTER: (spits it out) Good God. What is that?
ETTA: It's an Egg Stick.
WALTER: What a miserable future.
posted by sidereal at 5:20 PM on October 8, 2015 [2 favorites]


Once everyone is drinking it and extolling its praises (that InBev marketers taught them to say), they can crank the quality down even more. Because it doesn't matter if it's good. It matters if people think it's good.

Their market share has been dropping for years.
posted by shakespeherian at 5:27 PM on October 8, 2015


not sure what your point is there shakes
posted by sidereal at 5:30 PM on October 8, 2015


This is all very Henny-Penny, is my point.
posted by shakespeherian at 5:46 PM on October 8, 2015


Noted!
posted by sidereal at 5:55 PM on October 8, 2015


Oh god. It was just announced that Labatt, the Canadian brand owned by AB InBev, is buying Mill Street, which makes a couple of beers that I rather like.
posted by mandolin conspiracy at 8:03 AM on October 9, 2015


I'm pretty sure it's paywalled, but there's an interesting thing in the Financial Times that touches on some of the ideas behind the merger.

First off, everyone involved immediately acknowledges that the US assets of one or the other would have to be spun-off or sold. The US beer brands involved are a hinderance to this going forward if anything. They're certainly not the main motivating factor, because that's the fact that SABMiller has put a lot of effort into cultivating products in Africa, South America, and Asia (70% of their sales are in those markets) while InBev hasn't, and it's going to be a lot easier to buy SABMiller than to go into those markets while giving your main competitor several year's worth of head start. It's the sort of thing that makes enough business sense from a global perspective that the effects in the US are almost irrelevant.
posted by Copronymus at 8:03 AM on October 9, 2015


Oh god. It was just announced that Labatt, the Canadian brand owned by AB InBev, is buying Mill Street

NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO...!
posted by Sys Rq at 8:17 AM on October 9, 2015 [1 favorite]


Exclusive: U.S. probes allegations AB InBev seeking to curb craft beer distribution
The U.S. Justice Department is probing allegations that Anheuser-Busch InBev (ABI.BR) is seeking to curb competition in the beer market by buying distributors, making it harder for fast-growing craft brewers to get their products on store shelves, according to three people familiar with the matter.

In the past few months, the world's largest brewer has rattled the craft beer world by striking deals for five distributors in three states. Many states require brewers to use distributors to sell their product, and once AB InBev buys a distributor, craft companies say they find that they can't distribute their beer as easily and sales growth stalls.

Antitrust regulators are also reviewing craft brewers' claims that AB InBev pushes some independent distributors to only carry the company's products and end their ties with the craft industry, two of the sources said, noting that the investigation was in its early stages. AB InBev's purchase of several craft beer makers in recent years means that it is in a position to offer a greater variety of products itself.
posted by tonycpsu at 12:55 PM on October 13, 2015 [1 favorite]


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