AB InBev pledges to ‘vigorously defend’ lawsuit on SABMiller acquisition

By Rachel Arthur contact

- Last updated on GMT

AB InBev pledges to ‘vigorously defend’ lawsuit on SABMiller acquisition

Related tags: Ab inbev, Beer and breweries in multi regions, Anheuser-busch inbev

A lawsuit brought by a group of US consumers is trying to block Anheuser-Busch InBev’s planned acquisition of SABMiller, saying it could mean higher prices and fewer beer choices - claims AB InBev rejects.

AB InBev says the lawsuit is ‘without merit,’ and that the takeover will not harm competition in the market or the growth of craft brewers.

A group of 23 consumers filed the lawsuit in the US District Court in Oregon last week, asking for the acquisition to be prohibited.

The lawsuit says AB InBev’s acquisition of SABMiller could "substantially lessen competition and/or tend to create a monopoly in the production, distribution and sale of beer in the US."

But AB InBev says that the US beer market has "never been more competitive,"​ particularly thanks to strong growth from craft brewers, and insists its acquisition of SABMiller will not change this. It points to the opportunity the acquisition gives the company to extend the reach of its portfolio overseas.

Oregon: a craft beer stronghold

The plaintiffs are described as purchasers of beer made by AB InBev and/or SABMiller, as well as consumers of Oregon craft beer. They say they are threatened by the acquisition’s potential impact on consumer choice.

The competition between AB InBev and SABMiller to date has spurred product innovation that benefits consumers, says the lawsuit. But this competition will be ‘eliminated,’ claim the plaintiffs, if the acquisition is completed.

“The proposed acquisition by AB InBev of SABMiller significantly threatens consumer welfare by the threatened increase in price, deterioration of quality, curtailment of innovation, destruction of consumer choice, and the elimination of actual and potential competitors and significant rivals in a non-trivial transaction,” ​reads the lawsuit.

“AB InBev’s acquisition of SABMiller will cause competitive harm to US beer consumers by further enhancing AB InBev’s ability to unilaterally raise the prices of the SABMiller [brands] and other brands it will own post-acquisition, and diminish ABInBev’s incentive to innovate with respect to new brands, products, and packaging.”

Oregon, the state where the lawsuit has been filed, is a large producer of craft beer. On a per capita basis, it is one of the top five states of US craft beer consumption, and 2014 figures showed 216 craft breweries operating in the region.

The plaintiffs say craft brewers are a "rare bright spot in an otherwise sluggish US beer market,"​ but fear that they are particularly vulnerable.

Claims ‘without merit,’ says AB InBev

John Blood, vice president, legal and corporate affairs for Anheuser-Busch InBev, says AB InBev will defend the lawsuit.

“We believe that the claims alleged in this lawsuit are without merit, and we intend to vigorously defend against them,” ​he said.

“The U.S. beer market has never been more competitive, with strong growth from craft brewers, and nothing in this transaction will change that fact. Instead, this transaction provides a compelling opportunity to extend the reach of AB InBev’s iconic American brands, such as Budweiser, to markets outside of the United States.”  

AB InBev has previously stated that one of the key advantages of the acquisition is the access it will gain to high growth regions such as Africa, Asia and Central and South America.

In the US, AB InBev has agreed to sell SABMiller’s 58% stake in MillerCoors​ to Molson Coors (conditional on the SABMiller acquisition).

Related topics: Markets, Beverage, Manufacturers

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