Beer Drinkers File Law Suit To Block Anheuser-Busch / SABMiller Merger

Looks like a group of beer drinkers have joined force to file a civil anti-trust lawsuit in an attempt to block the Anheuser-Busch/InBev SABMiller merger.  Here’s are a few highlights:

This is a private antitrust suit brought under Section 16 of the Clayton Antitrust Act (15 U.S.C. § 26) to permanently prohibit the proposed acquisition by ABI, the largest brewer in the United States and world, of the second largest brewer in the United States, SAB—which includes Miller Coors, LLC, a joint venture between SAB and Molson Coors Brewing Co.—in violation of Section 7 of the Clayton Antitrust Act (15 U.S.C. § 18), in that the acquisition may, and most probably will, substantially lessen competition and/or tend to create a monopoly in the production, distribution, and sale of beer in the United States.

2. The United States is the most profitable beer market in the world.

3. The U.S. beer industry—which serves tens of millions of consumers at all income levels—is highly concentrated with the two defendant firms accounting for approximately 71 percent of all sales volume nationwide. The proposed acquisition by ABI of SAB significantly threatens consumer welfare by the threatened increase in price, deterioration of quality, curtailment of innovation, destruction of consumer choice, and the elimination of actual and potential competitors and significant rivals in a non-trivial transaction. By combining the largest and the second-largest brewers of beer sold in the United States, the defendant, ABI, would be a global beer behemoth with a market value of roughly $275 billion, and 71 percent of the beer market in the United States, sufficient monopoly power to exclude competition and raise prices. Plaintiffs, therefore, seek to enjoin this acquisition and prevent a serious violation of Section 7 of the Clayton Act.

4. For the foregoing and following reasons, the proposed acquisition may substantially lessen competition or tend to create a monopoly in violation of Section 7 of the Clayton Act.

25. Plaintiffs are consumers and purchasers of defendants’ beers and are threatened with loss and damage in the forms of higher prices, fewer services, fewer competitive choices, diminished product quality and product diversity, suppression and destruction of smaller actual competitors through exclusive distribution arrangements, full-line forcing, and the like, and other anticompetitive effects and consequences that may, and most probably will, result from the elimination of actual and potential competition if the acquisition by ABI of SAB is consummated.

32. The proposed acquisition is likely to lead to a decrease in small brewers’ access to distributors. The beer market in the United States is predominantly a three-tiered system because state regulations in most states require that the brewer sell to a distributor who then sells to retailers. In its challenge to ABI’s acquisition of Modelo, the Department of Justice demonstrated that, “[e]ffective distribution is important for a brewer to be competitive in the beer industry.” Large companies can and do use their market power to exert a tremendous amount of influence over what beer brands distributors carry. This is important because ABI and SAB’s MillerCoors joint venture has pursued different strategies in their dealings with distributors in the United States.

About MyBeer Buzz

Founder, owner, author, graphic designer, CEO, CFO, webmaster, president, mechanic and janitor for mybeerbuzz.com. Producer and Co-host of the WILK Friday BeerBuzz live weekly craft beer radio show. Small craft-brewer of the craft beer news sites and one-man-band with way too many instruments to play........Copyright 2007-2024 mybeerbuzz.com All Rights Reserved: Use of this content on ANY site without written permission is not allowed.