Beer Monopoly Merger Blocked by U.S.

    February 1, 2013
    Sean Patterson
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The U.S. Justice Department this week filed a civil antitrust lawsuit against Anheuser-Busch Inbev’s (ABI) acquisition of Grupo Modelo. ABI is the maker of the best-selling beer in the U.S., Bud Light. Modelo sells the best-selling import beer in the U.S., Corona Extra.

ABI has proposed buying Modelo for $20.1 billion dollars. Of the $80 billion Americans spent on beer in 2012, around 39% of that amount went to ABI, while Modelo accounts for around 7% of U.S. beer sales. The companies are the largest and third-largest beer companies in the U.S. The justice department claims that the proposed merger would “substantially lessen competition in the market for beer in the United States” and result in rising beer prices.

“The department is taking this action to stop a merger between major beer brewers because it would result in less competition and higher beer prices for American consumers,” said Bill Baer, assistant attorney general in charge of the Department of Justice antitrust division. “If ABI fully owned and controlled Modelo, ABI would be able to increase beer prices to American consumers. This lawsuit seeks to prevent ABI from eliminating Modelo as an important competitive force in the beer industry.”

The Justice Department’s complaint makes the case that the U.S. beer market is already highly concentrated, and that ABI “generally” acts as a price leader. It points out that while other beer companies such as MillerCoors, the second-largest beer seller in the U.S., generally follow ABI’s yearly price increases, Modelo has priced its imports “aggressively,” keeping ABI’s price increases under pressure.

  • adam

    this is bullshit they’re a private company let them do what they want

  • mark

    Its funny…they don’t care about rising prices if its a tax…

  • the messenger

    they can only raise the price of what they sell. if buyers refuse to pay it, they will have to lower it. this is called free market capitalism. a monopoly is more synonymous with the government raising income tax. short of leaving the country, there aint anything you can do about it


    Hmm…Funny thing is…I don’t drink either of them. Let them raise the prices! Hamms is still $10/30pack!!

  • Tony

    Kudo’s to US. Finally, an action that is correct and goes by the laws of economics. Some people just do not understand.

  • Dave

    Private company? Last time I checked, they were a public company that traded under ADR…. not that this has anything to do with Antitrust laws which can be broken by anyone creating a monopoly.

  • http://WPN Lynn

    I think ABI is in for a surprise! We Americans like our beer, our craft beers! The craft beer market continues to grow. When we don’t buy ABIs beers, they will get the message.