It's exciting times in the world of beer. On the craft end of the spectrum, formerly independent stalwarts, like Ballast Point and Lagunitas are being bought out for as much as a billion dollars. But at the same time, the U.S. has finally surpassed the 1873 record for highest number of breweries, with more than 4,144 now pumping out suds today. And on the big-business end, the two largest brewers on the planet, Anheuser-Busch InBev and SABMiller, are attempting to combine into the first globally dominant beer company.
It would seem that every sector of the beer industry would be happy to mind its own business, but in an odd turn, a group of West Coast beer lovers are suing to block the AB InBev and SABMiller merger. The 23 craft fans from California, Oregon, and Washington claim the acquisition by AB InBev would create a monopoly that would drive up prices while lowering the quality of their beer.
The current brands of the megabrewers would cover about 70 percent of the U.S. market. But in anticipation of what would be a roadblock for Justice Department approval of the merger, SABMiller already announced it would sell its stake in MillerCoors. That joint venture combined portfolios of the two companies to make up 30 percent of the U.S. beer sold, and its sale would mean that the Miller, Molson, Coors, and Blue Moon brands are left out of the merger.
AB InBev's vice president of legal affairs, John Blood, quickly responded to the suit, saying, "the U.S. beer market has never been more competitive, with strong growth from craft brewers, and nothing in this transaction will change that fact."
There's also a chance that the 23 beer-loving plaintiffs may not be legitimately worried about beer prices and quality. The suit could simply have been hatched by a law firm seeking a payday.
"My guess is, where there is more than $100 billion at issue, it is only natural for somebody to assume they can try to obstruct, and collect a handsome toll," says Robert C. Lehrman, principal attorney of Lehrman Beverage Law. "Compare it to a big real estate developer assembling a big parcel for an urban complex; there is one holdout; they have to build around him or beat him in court or buy him out."
This wouldn't be the first time a massive beer company was targeted by a questionable suit. Last spring, a beer drinker in California filed a class action suit against MillerCoors, claiming damages because he was tricked into thinking its Blue Moon product was an independent craft beer. The suit was thrown out in October, and we wouldn't be surprised if the merger lawsuit met the same fate in a few months.
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