Two Beer Giants May Soon Become One

By Mike Pomranz |
FWX ANHEUSER BUSCH TRYING TO BUY SAB MILLER

© iStockphoto

Anheuser-Busch InBev, the world’s largest beer company, controls nearly 20 percent of the world’s beer sales. But if the firm has its way, it may soon control almost 30 percent of that market by purchasing SABMiller, the world’s second largest brewer.

The Wall Street Journal reports that AB InBev has been “talking to banks about financing” the deal. Probably because the company doesn’t have the estimated $122 billion it would take to buy SABMiller just laying around the office. Most of us don’t.

The impact on American consumers would probably be minimal. Most people are probably already unaware that their Pilsner Urquell or Peroni (or any of 150 other beers) is brewed by a South African–American conglomerate, and they probably wouldn’t notice if started getting brewed by a Belgian-American conglomerate.

But from a business perspective, the impact on the US is more interesting. In 2008, SABMiller formed a joint venture with Molson Coors, called MillerCoors, with the direct intent of better competing against AB InBev. If AB InBev purchased SABMiller, in theory, all three major US beer brands—Anheuser-Busch, Miller and Coors—would be aligned. The Wall Street Journal even speculated in its report that AB InBev “would likely have to sell SABMiller’s stakes in…MillerCoors in the US” to avoid antitrust issues.

If you find all of this confusing, you’re not alone. The big brewer landscape has shifted constantly, especially since InBev acquired Anheuser-Busch in 2008. AB InBev now controls more than 200 beer brands of its own, many of which you don’t see on American shelves. In fact, those global beer sales are what’s primarily driving a possible SABMiller buyout. AB InBev wants to have a bigger presence in places like South America and Africa.

But as Forbes points out, part of the need for expansion is because global beer makers aren’t earning enough revenue in the US. “Millennials have especially gravitated to flavorful offerings from the spirits and wine industry, as well as to beers sold by craft brewers,” reports Forbes. We’d venture a guess though, that in addition to preferring drinks that taste better (we all know what “flavorful” means) it doesn’t help that no one knows where the hell their beers are coming from anymore.

Related: There's a Very Good Reason Craft Beer is More Expensive 
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