Big beer gets bigger: Making sense of a mega-merger

If a $106 billion deal between AB InBev and SABMiller goes through, we’re about to enter a world in which about a third of all beer sold – anywhere on Earth – will be made by one company.

That’s crazy. But what does it mean for fans of craft beer? Well, the short answer is that it’s much too early to tell. News services were buzzing with talk of the colossal takeover Tuesday morning, but the massive deal has so many moving parts, it’s hard to find any concrete analysis of exactly what this means for the industry as a whole, let alone for the craft sector.

Here’s what you should know:

  1. The proposed merger involves many of the world’s most recognizable beer brands. AB InBev’s huge stable of products includes Budweiser, Busch, Corona, Stella Artois, Beck’s, Hoegaarden, Leffe, Bass, Labatt’s, Lowenbrau, Michelob, Modelo, Rolling Rock, Shock Top, Spaten and Franziskaner. SABMiller’s portfolio includes Miller, Foster’s, Peroni, Redd’s, Grolsch, Pilsner Urquell, Icehouse, Milwaukee’s Best, Leinenkugel’s, Olde English 800 and Mickey’s. Furthermore, SABMiller is part of a joint partnership with Molson Coors, which produces a range including Molson, Coors, Killian’s, Keystone and Blue Moon.
  2. Though both parties involved have agreed to the takeover, it’s far from a done deal. It’s probable that the Justice Department will require some divestiture of brands, most likely including the breakup of the MillerCoors partnership.
  3. There’s also likely to be some ramifications for the soft drink sector – AB InBev and SABMiller have ties to Pepsi and Coca-Cola, respectively.
  4. Craft brewers might well have reason to be concerned here. AB InBev made waves this past summer when they bought the once-fiercely independent Elysian, the latest of four rapid-fire craft beer acquisitions for the megabrewer (the other three were Goose Island, Blue Point and 10 Barrel.)
  5. Also this week – and equally worrying to the craft world – came allegations that AB InBev is buying distributors and then pressuring them to sever ties with smaller brewers.
  6. Finally, if all of this looming corporate intimidation has you truly worried, Bloomberg points out that there are plenty of places around the world where local beer is still king. Just, y’know, not so much in America.

What are your thoughts on the beer world’s mega-merger? Let us know in the comments!

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Posted in Articles, Craft Corner, Drink

Jed Reinert is the content editor of Fly Magazine. His prior experiences include playing in short-lived bands, writing poetry about diners, being hit by a car while skateboarding, witnessing a casino robbery in Las Vegas, and hand-developing a vintage roll of film that turned out to contain candid photos of Adolf Hitler. His interests include craft beer, indie rock, Star Wars and eating as much food as possible.

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