WASHINGTON & PORTLAND, Ore. -- Anheuser-Busch InBev and Molson Coors executives will appear before a U.S. Senate subcommittee Tuesday to plead their case for a merger of beer brewers AB InBev with SABMiller and the subsequent sale of right for MillerCoors’ U.S. beer brands to Molson.
AB InBev CEO Carlos Brito is expected to discuss his desire to extend “the reach of iconic American brands such as Budweiser” to new markets around the world, while underscoring minimal change in the U.S. beer market.
“What it is not about is changing our competitive position in the U.S. beer market,” Brito stated in prepared comments shared by St. Louis Public Radio.
Regardless of the outcome of the hearing of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, Brito and his legal team may find themselves defending the $107-billion deal in court in Oregon, where a group of beer drinkers has filed a lawsuit to “permanently prohibit the proposed acquisition.”
“Each plaintiff is threatened by a loss or damage by reason of the acquisition in that prices for beer may increase, quality may deteriorate, availability may be lessened, actual and potential competition and the benefit of competition may be curtailed or even eliminated, and consumer choice may be destroyed,” the lawsuit states.
The lawsuit says that upon completion of the deal, the new company will be “a global beer behemoth with a market value of roughly $275 billion and 71% of the beer market in the United States, sufficient monopoly power to exclude competition and raise prices.”
The 20 plaintiffs named in the lawsuit seek to prevent the merger as a violation of the Clayton Act, which prohibits the acquisition of “stock” or “assets” where “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly,” according to the Antitrust Institute.
The claims in the lawsuit are “without merit, and we intend to vigorously defend against them,” said John Blood, vice president of legal and corporate affairs for AB InBev. “The U.S. beer market has never been more competitive, with strong growth from craft brewers, and nothing in this transaction will change that fact. Instead, this transaction provides a compelling opportunity to extend the reach of AB InBev’s iconic American brands, such as Budweiser, to markets outside the United States.”
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