There is a major change currently brewing in the beer industry that would shake up the landscape for possibly the final time.
Over the past week, Anheuser-Busch InBev has made three non-official offers to SABMIller in an attempt to merge the two beer titans, and so far SABMiller has rejected them all. But that doesn’t mean a merger isn’t inevitable.
A-B InBev and SABMiller are the No. 1 and No. 2 beer sellers in the world, combining for 30 percent of the market. Not only would a merger give A-B InBev the 30 percent market share, but it would also give them a 70 percent market share in the United States.
Due to regulations, and the desire to see the merger go through without too many roadblocks, A-B InBev would likely sell off a few of the companies SABMiller own a controlling stake in; most noticeably the Miller brand here in the U.S.
On the face of it, it doesn’t seem the potential merger would have much effect on the craft brewing scene. According to The Brewers Association 2014 data, craft breweries made up 11 percent of the volume share and 19.3 percent of the retail dollar value in the beer market. The rise in popularity, and abundance, of craft brewing has A-B InBev and SABMiller a little scared here in the U.S. That fear was made apparent with Anheuser-Busch’s ads that took pot shots at the craft beer industry, and that fear will only continue to grow.
Paul Gatza, Director of the Brewer Association, thinks the merger could have an impact on the malt and hops industries as “one massive buyer could have increased leverage over growers.” Now he also feels this would be over the next 10-15 years, so there is time to get things sorted out before that occurs.
Anheuser-Busch InBev has until October 14 to make an official offer or SABMiller could file for an extension to continue talks. If no offer is made, or extension granted, then the talks would be tabled for six months.
Source: New York Times
