AAI Warns DOJ that Beer Merger Would Eliminate Competition in the United States

Nov 20 2014
Testimony and Interventions

The American Antitrust Institute (AAI) today expressed concerns to the Justice Department¹s Antitrust Division about the rumored merger of Anheuser-Busch InBev (ABI) and SABMiller (Miller). ABI is the world¹s largest brewer with the popular brands Budweiser, Labatt, Stella Artois, and Becks. Miller is the second largest brewer, whose brands include Miller Lite, Peroni, and Coors. 

In the letter to Assistant Attorney General William Baer, the AAI warns that the merger would leave the U.S. with one dominant brewer: a behemoth with a national market share of 65 percent by value and 80 percent by volume. Some local markets may become even more concentrated.  According to the concentration thresholds set out in the Horizontal Merger Guidelines, the merger would be presumptively illegal.

"An ABI-Miller combination would likely inflict substantial harm on consumers," said AAI President Bert Foer. "It would eliminate head-to-head competition between the two biggest brewers in the United States." 

Without competitive discipline from Miller, ABI would have more power to raise prices and also feel less pressure to innovate with new brews. The merger could also threaten the growth of rivals, including the independent craft segment. These small brewers have helped deliver extraordinary choice and variety for consumers. By obtaining even greater control over distribution and retail channels, ABI could impede such rivals from competing and capturing market share.

In November, 2012, the AAI issued a monograph that provides extensive background on the beer industry¹s march toward monopoly.

 

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PDF icon AAI Beer Letter to DOJ199.23 KB