Wednesday, October 7, 2015

What are your thoughts on proposed AB InBev, SABMiller merger?

To be totally honest, despite my definite capitalistic nature, I am somewhat saddened by the state of the beer industry wherein currently the big breweries are no longer technically United States companies. InBev, which is now AB InBev is a Belgian company. And SABMiller is part of a joint venture between Canadian Molson Coors, and South African SAB. While it is true that a large part of these operations are still active in the U.S., and so there are still plenty of jobs that are supported by these companies, the truth is that I think America loses something more in the way of what was once a vibrant system of breweries.

The last standing largest American brewer is The Boston Beer Company which brews the popular, hoppy brand Samuel Adams.

There is also the thought that I have that as these companies become more melded into one, what we also lose more of is the ability of new, smaller players to emerge and compete. Granted, the craft beer industry and the traditional beer industry are not necessarily one in the same, and neither are their customers. Still, the proposed merger between AB InBev and SABMiller could mean that the combined company would control approximately 70% of the entire beer market. While that happens to be a great deal for the company and its shareholders, I am not sure it is a great deal for consumers since this large behemoth of a company will be able to have more control over its distributors, and I think ultimately this means that the combined company will also have the strength to control prices in a way that puts consumers at a disadvantage.

All in all I don't think the merger is one that will not happen with a few tweaks. For example, an adjustment to the MillerCoors company deal may have to happen. It would not be totally bad for the market. But I definitely would like to see some new, smaller companies emerge who can one day at least challenge a company such as what we will have with this combined one.

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