Anheuser-Busch InBev and Heineken Battle Over New Draft Beer Systems
As beer sales decline, infighting among the brewing industry’s upper ranks may become more common.
The biggest beer story of 2019 so far has been a battle between America’s two largest brewers. Anheuser-Busch and MillerCoors began tussling over corn syrup after the former launched an unsolicited attack ad on the latter during the Super Bowl. The reason Bud Light picked this fight with its biggest competitors is about more than old rivalries. Beer sales are shrinking, especially for the largest brands; independent local breweries are one of the industry’s few bright spots, but old-school beer brands are unlikely to steal away drinkers from these small purveyors of handcrafted brews. As a result, it’s beginning to look like big brewers’ best opportunity to expand their market share is at each other’s expense — meaning Bud Light’s “corntroversy” might just be the tip of the iceberg.
Along those lines, as Bloomberg reports, the world’s two largest brewers have recently launched a legal battle over the right to use new draft beer systems in the United States. Both Anheuser-Busch InBev and Heineken have developed smaller draft systems that take up less space, are easier to maintain, waste less beer, and keep it fresher. The reason for these systems is clear: Both brands are looking to penetrate spots where larger, sometimes unwieldy keg systems (you ever tried to lift a keg?) have been impractical — be it in smaller bars and restaurants or even consumers' homes. What isn’t so clear, however, is whether these two brewing behemoths have infringed on each other’s patents in creating these patently similar systems.
Both Heineken’s Blade system and AB InBev’s Nova system (which is marketed under the Stella Artois brand) use canisters that, beyond being less cumbersome, also don’t require outside gas to be served. AB InBev reportedly claims that it has patents on these canisters and is trying to, therefore, ban Heineken from importing its system into the U.S. But meanwhile, Heineken apparently believes that it holds patents on the machinery behind the dispensing system, claiming they actually have reason to block AB InBev’s system.
This argument has now gone before the U.S. International Trade Commission. But Bloomberg points out a potentially more interesting wrinkle in this fight: At one point, the two companies were reportedly in discussions to license each other’s patents before AB InBev decided to move forward with legal proceedings. Similarly, at one point, it looked like Anheuser-Busch and MillerCoors might work together to promote beer on a unified front until MillerCoors backed out of the deal after AB’s Bud Light Super Bowl ads.
Though legal battles over patents are a common occurrence between big companies (look no further than the recent news of a patent settlement between Apple and Qualcomm), at the same time, these recent examples of big brewers’ unwillingness to work together have a sense of “desperate times call for desperate measures.” Unless overall beer sales start to rebound, don’t be surprised to see further fights brewing in the future.