25 May Final DOJ Review of AB InBev/SAB Miller Merger Draws Hearing Requests from BA and Others
by Mark E. Lasbury for Indiana On Tap
based on the original article by Justin Kendall on Brewbound, May 22, 2018
The merger of SAB Miller and AB InBev was finalized in October of 2016, and many ramifications have been seen throughout the mega-beer industry since then, with definite waves that have struck into craft beer as well. Mergers of this size often have unintended (or intended) consequences, which is why final reviews are required by controlling entities. In this case, the Department of Justice gets to render judgment on the wording of the merger and decide if all is going according to plan.
This is most often a pro forma activity, with little fanfare and even less coverage, but in the case of the largest beer merger in world history, some issues have definitely cropped up. In addition, it’s been almost two years since the implementation of the merger, so there is quite a bit of data and activity that could be reviewed – IF someone asked for it to be reviewed and IF it is decided that a hearing is warranted.
Session from original hearings on merger. image credit: Zimbio
And someone has asked for a hearing this time; actually, three someones. The Brewers Association (BA) and the National Beer Wholesalers Association (NBWA) have banded together to ask to be heard on several issues that they believe to be vague in wording and could be/have been abused by AB InBev in their activities after the merger.
In addition, a consumer protection group called Consumer Action has also filed a request for a hearing on the final review as well. Specifically, Consumer Action objects to a DOJ intention to shorten the enforcement of the merger limits of the final judgment from ten years to five. Basically, the change would hold AB InBev to the terms of its agreement for half as long, and then all bets would be off and every action would have to be adjudicated individually. Consumer Action also wishes a ten year prohibition on the AB InBev purchase of wholesale liquor distributors. These happen to be two of the issues that BA and NBWA have also raised, amongst others.
BA and NBWA are worried that wording in the agreement is too vague to hold AB InBev from acting to severely limit craft beer distribution and suppress competition. For example, AB InBev must hold to wording that distributors will hold to “best efforts” not to favor AB InBev products over those of craft producers. Since AB InBev products make up a huge portion of some distributors’ portfolios, BA and NBWA hold that the wording will not prevent AB InBev from putting pressure on distributors to favor their products.
For more of the BA/NBWA objections and the DOJ’s rejection of a previous objection by Yuengling, see the original article here.
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