Bloated beer brewers grow even bigger
Bruce Whitfield, Sunday Times, South Africa: “You know what happens if you drink too many beers in quick succession. It leaves you feeling bloated, light-headed and, depending on your ability to hold your drink, it can all end in tears. Such is the world of major transactions, and it may prove to be particularly true in the case of the creation of Megabrew: the proposed acquisition by the world’s biggest brewer, Anheuser-Busch InBev, of SABMiller.”
Matthew Gwyther, Management Today: “Faced with (a significant) fall in lager-guzzling, the only answer (industrial brewers) appear to be able to come up with is mega mergers. ... Maybe a return to first principles — i.e. some attention to the actual product — might help. When the most you can truthfully say about your product is that it’s cold, wet, bland to the taste and contains alcohol, you really have reached a dire state. Industrial lager is a desperate, unloved thing.”
Andrew Dewson, Business Report: “It’s hard to imagine how anyone in the world apart from investment bankers and SABMiller shareholders will benefit from the deal. Certainly not beer drinkers. ... If the deal goes ahead, all of the risk belongs to AB InBev and particularly its ambitious Brazilian backer, 3G Capital. The very real threat is that if American taste in beer can change then so can anyone’s — and everyone’s taste is changing.”
Lewis Diuguid, The Kansas City (Mo.) Star: “The merger would make no sense except that giant, near monopoly corporations now are facing the nibbling challenge of smaller operators. ... Americans have fallen for craft beers, which now constitute 11% in volume of the U.S. market. ... Beer makers find themselves facing the same nagging reality that many utility, telephone and media companies have had to confront. Technology has opened the floodgates to competition.” The New York Times, editorial: “About three-quarters of the beer Americans drink is now sold by ... InBev and MillerCoors, a joint venture in which SABMiller owns a 58% stake. ... Consolidation on this scale leads to higher prices and fewer choices. ... In addition to raising prices, the big brewers have used their clout to try to slow the growth of craft beer. ... An InBev-SABMiller deal ... should not be approved unless SABMiller divests its Miller brand. ... Regulators need to make sure smaller competitors get a fair shot.”