Update: What the Anheuser-Busch Inbev Takeover of SABMiller Means for Craft Beer

Anheuser-Busch InBev plans to acquire SABMiller. Will that hurt craft beer?
Anheuser-Busch InBev plans to acquire SABMiller. Will that hurt craft beer?Daniel Acker / Bloomberg / Getty Images

Anheuser-Busch InBev, the largest brewer in the world, wants to buy SABMiller, the second largest. The resulting megabrewer would control nearly one third of the world's beer and produce roughly 3.5 times as much as the next competitor, Heineken. AB InBev's potential takeover made a splash in the business world, especially for SABMiller shareholders, with stock prices jumping. But in the big picture, after years of mergers and acquisitions across the beverage industry — remember when Anheuser-Busch and Miller were American owned? — this is seen as the final move, the checkmate, to establish sudsy supremacy.


RELATED: The 100 Best Beers in the World

Read article

In the U.S., the two companies would own a much bigger piece of the pie, a combined 70 percent. This has set off alarms with anti-trust regulators and will likely result in one or both companies selling off brands within the American market. SABMiller said it would sell its stake in the joint venture MillerCoors, effectively losing the Miller brands in the U.S., but the megabrewer would remain a juggernaut with nearly 50 percent of the market. And with so much money and power on the line — the resulting company would be worth nearly a quarter of a trillion dollars — what we want to know is not what this means for next year's Super Bowl commercials, but for the craft beer world we love.

Not much will likely change for consumers and brewers alike, says Paul Gatza, director of the Brewers Association, a craft-beer trade group. "Most craft brewers operate in a different sphere," he said in a statement. "Many craft brewers would look at a potential deal of Anheuser Busch-InBev and SABMiller as not relevant to their businesses and will keep on doing what they do."


RELATED: 19 Wild Ales and Sours Beers You Need to Try

Read article

Some politicians, however, are more anxious as they look to protect their local independent breweries. At a December 8 U.S. Senate hearing for the $107 billion purchase, Minnesota Senator Amy Klobuchar, chairman of the Senate Judiciary Subcommittee on Antitrust, raised concerns over the influence the new company would have over distributors. "Wholesalers make decisions everyday on what brands to put on their trucks. By working to ensure those decisions are driven by consumer demand and not producer power, we can help competition in the beer industry remain on tap," she said. "If… ABI's market share were to increase even a small amount, the acquisition would be presumptively anticompetitive."

Speaking at that hearing, Brewers Association CEO Bob Pease also focused on AB InBev's power over distributors, pointing out that the company even owns wholesalers in the 15 states that allow it. "The Brewers Association strongly believes that the Department of Justice should require ABI to divest its company-owned wholesalers," he said. His second request, on behalf of the BA, was that AB InBev be forced to end it's incentive programs that essentially pay distributors cash to not sell its competitors. Recently, for example, AB InBev introduced such incentive programs to independent distributors where, on the top end of the scale, a wholesaler could receive up to $1.5 million annually if 98 percent of its sales are ABI brands. However, such tactics are already in place regardless of the merger with SABMiller.

With no deal approved, Gatza also points out that there are more questions for the future than sure predictions. Breaking up some of the AB InBev and SABMiller brands will create an opportunity for any of the smaller mass-produced beer players. Many industry experts see SABMiller selling off its share of MillerCoors, a joint venture with Molson Coors that combined operations to better compete against AB InBev. Molson Coors has the right of first refusal to snap up the SABMiller brands, but if they decline, this could be an opportunity for Heineken or another potential buyer — if brands do indeed need to be sold off. But no matter what happens to the Miller brands in the U.S., it won't likely change the tap list at your favorite bar.

Another reason craft drinkers can sip their beers soundly is because this acquisition is not about the U.S. market, says Eric Shepard, vice president of trade publication Beer Marketer’s Insights. "This is about Asia and Africa, where AB InBev has virtually no business and SABMiller does." AB Inbev will likely continue its current strategy of buying up craft brewers, but the new company could lose focus on the U.S. market, he adds. "For craft lovers, there's still going to be a lot of great beer, and a lot of choice. That's not going to change."

For access to exclusive gear videos, celebrity interviews, and more, subscribe on YouTube!