InBev tries to get in bed with Anheuser-Busch
Rumors started earlier this week that InBev, already one of the world’s largest brewing concerns, was thirsty for a mega-merger with Anheuser-Busch, makers of the world’s best known industrial light lager, or what most of us quaintly call “Bud.”
Then yesterday the rumor became real. InBev offered to acquire A-B for $46.3 billion, proposing what would be the third largest foreign takeover of an American company – ever.
What’s wrong with this deal?
It is a sign of desperation.
It has been my position for years that mergers such as these are desperate acts by global brand owners who have nowhere to grow but out (I wrote about this in my book Fermenting Revolution). The market is saturated with industrial beer, so the companies selling it can only grow by acquisitions and mergers rather than market-lead growth that results from people actually wanting a company’s product. According to the logic of capitalism, the end goal of this process is a global monopoly on commodity beer (Read this AP wire article about how the Governor of Missouri agrees with me on this point).
It is likely to be hostile.
The family members that maintain whatever might be left of a heart of the already-global, publicly-traded, Anheuser-Busch corporation don’t want to relinquish the little control they still have over the direction of the company.
It will effectively end American brewing.
In actual and symbolic terms, the vast majority of beer sold in America will be foreign. Putting aside its many flaws (marketing that bolsters male chauvinism and stupidity, it tastes like fizzy water, etc.), Bud is nonetheless regarded as the quintessential “American” beer. A-B sells one out of every two beers in America (and has a stranglehold on the beer distribution system, which serves as a convenient excuse for gobbling up lots of small craft brewers (like Redhook, Goose Island, and Old Dominion) who just want fair access to the market – but, although it’s related, that’s really another story). A-B’s main domestic rival is – this name is not a joke – SABMiller Molson Coors. In other words, America’s second and third largest brewers, Miller and Coors, are actually foreign-owned already. Combine the existing sales of import brands (about 15% of the market) with SABMiller Molson Coors, and a theoretically InBev-owned A-B and what do you get? Foreign control of about 95% of the beers sold in America. So much for having a quintessential “American” beer – or any American beer for that matter, save the 5% or so produced by small, local craft brewers.
It’s just crude and low down.
Pardon my language, but InBev really wants to screw American beer drinkers. I mean it, just listen to the language they are using. In reference to the proposed hostile takeover, an InBev company official tried smooth talking his way into getting in bed with A-B, saying they’d “like to engage in a dialogue with the goal of consummating a friendly combination.”
Signs suggest that this deal is, in fact, likely to be ‘consummated’, as it were. That would mean that roughly half of the world’s commercial beer would be produced by just two giant conglomerates.
For my own part, I’ll be sticking to the beers produced by the thousands of small brewers around the world. And I’ll keep making my own beer in the kitchen.