We’ve talked about this before and perhaps we are starting to see some fears come to realization, or at least realized into a legal battle. Here are some excerpts from the Reuters story that they broke in the past hour.
Take this story into account with the fact that AB InBev is looking to buy SAB Miller, making it the largest brewery in the world, and we have a MegaBrew Company that could move mountains.
In the past few months, the world’s largest brewer has rattled the craft beer world by striking deals for five distributors in three states. Many states require brewers to use distributors to sell their product, and once AB InBev buys a distributor, craft companies say they find that they can’t distribute their beer as easily and sales growth stalls.
Antitrust regulators are also reviewing craft brewers’ claims that AB InBev pushes some independent distributors to only carry the company’s products and end their ties with the craft industry, two of the sources said, noting that the investigation was in its early stages. AB InBev’s purchase of several craft beer makers in recent years means that it is in a position to offer a greater variety of products itself.
State regulators in California, where AB InBev announced wholesaler purchases in Oakland and San Jose in September, are also looking into the matter, the people familiar with the matter said.
The beer giant confirmed that it was talking to regulators. “Anheuser-Busch has been in communication with the Department of Justice and California attorney general’s office about the transactions. We are working cooperatively to address any questions they have,” an Anheuser-Busch spokesperson said in an email.
Nikos Ridge, CEO of Ninkasi Brewing Co in Oregon, said that when two of his distributors were bought by AB InBev in 2011 and 2012, he saw what had been healthy sales growth quickly stall until it found alternative distributors.
“Our feeling was that we weren’t getting the same level of representation,” said Ridge. “We saw our trends drop and we have seen improvements since we’ve switched.”
An executive at a second craft brewer, who asked not to be named, said that AB InBev had recently bought one of its distributors. “It (the distributor) is slowly but surely divesting itself of everything that is not ABI. And we’re one of the last ones,” said the executive, who noted that its other options for distribution were limited. “We’re at the mercy of a lot of big players.”
Their experience is not unique. Conversations with at least four other craft brewers told the same story.
There were some 4,000 craft beer companies as of September, brewing everything from artfully made classics like Dale’s Pale Ale, Brooklyn Lager and Gordon Biersch Hefeweizen, as well as quirky brews like Breckenridge Vanilla Porter, and the super hoppy Palate Wrecker from Green Flash Brewing Co.
A handful of antitrust experts say that craft brewers have a case, albeit not an easy one.
The authorities could step in if AB InBev bought so many distributors that craft brewers lost significant access to a local market, said Jonathan Lewis, an antitrust expert at the law firm Baker Hostetler LLP. He estimated that the breaking point could be when AB InBev owned some 50 percent of distributors in a given area.
