How big does Anheuser-Busch InBev need to get?
Our Buy American Mention of the Week!
by Roger Simmermaker
November 3, 2015
Foreign-owned beer behemoth Anheuser-Busch InBev (also known as AB InBev), maker of a wide range of beers from Budweiser to Stella Artois, apparently just doesn't think it's quite big enough. So now it wants to swallow SABMiller PLC (another foreign-owned beer company).
Such merger proposals produce plenty of head-scratching among consumers who wonder just how darned big these companies actually need to get.
If regulators go along with the merger proposal (which I hope they don't if they just do their jobs and actually regulate something) the new international beer behemoth will command almost 30% of the global beer market.
Regulators simply need to understand that this proposed merger has nothing to do with the typical reasons companies merge, like creating economies of scale in an attempt to drive down prices and offer higher quality products for consumers. Even if the merger goes through, I doubt that Budweiser or Stella Artois is going to taste any better or any different than it does now. We aren't talking Diet Pepsi here, which has changed its formula well over a dozen times over the years.
Regulators also need to understand the proposed merger also has nothing to do with another possible reason companies seek to merge, which is to preserve jobs for corporations or companies that are simply too weak to survive on their own.
When Anheuser-Busch was American-owned and ultimately based in St. Louis, Missouri, it could have survived very well on its own back then before it became AB InBev. That happened as a result of a three way merger with Belgium's Interbrew and Brazil's AmBev in 2008.
So now one has to wonder why AB InBev, which is already much larger than the former American-owned Anheuser-Busch, needs to merge again with another international beer corporation if it isn't to merely survive or create economies of scale to provide better quality products.
There's only one reason left, and that is to dominate the market, which means AB InBev (headquarters in Leuven, Belgium) can potentially hike up prices, and block competitors attempting to offer high quality products of their own.
But AB InBev isn't necessarily squelching competition by trying to block them from market access - they're acquiring their competition instead. Case in point is their recent intent to buy Los Angeles-based craft brewery Golden Road Brewing, which would become their fifth acquisition of a craft brewery since 2011.
AB InBev perceives a threat with the escalating popularity of the craft beer industry, which has doubled its market share in the last decade. AB InBev paid $38.8 million in 2011 for Chicago-based Goose Island. And it subsequently picked up Blue Point Brewing Co. (Patchogue, N.Y.), 10 Barrel (Bend, Oregon), and Elysian Brewing Co. (Seattle).
If you're a fan of craft beer like me and want to shy away from global beer behemoths like AB InBev who only seek to become continuously and dominatingly larger, you can visit www.craftbeerdirectory.com, which lists only American-owned craft beers brands for patriotic consumers. And since www.craftbeerdirectory.com only lists American-owned craft beer companies, you won't find any craft beers listed on the website that AB InBev has swallowed up like Goose Island and Blue Point Brewing.
Now I do understand that all the small craft brews listed on www.www.craftbeerdirectory.com will not necessarily be available at your favorite bar. If that's the case, then I would suggest larger American-owned craft beer companies that have national distribution and can be purchased virtually anywhere. Sam Adams and Yuengling are two of my favorites. Yuengling has the distinction of being America's oldest brewery (established in 1829).
The bottom line is we need to steer our consumer dollars away from popular foreign-owned brands like Budweiser, Miller, Stella Artois, etc., and support American-owned craft beer brands like Yuengling, Sam Adams, or the many others listed on www.craftbeerdirectory.com.
The best way to bolster the American economy is to support American-owned and American-made products, which keep jobs, profits and tax revenue circulating within our national borders.