US gives Anheuser-Busch InBev, SABMiller takeover conditional green light

US anti-trust authorities have sought to rein in Anheuser-Busch InBev's distribution clout in the country, as they gave conditional approval to the brewer's SABMiller takeover.

In a judgement released late yesterday, the Department of Justice issued a number of rulings that would limit distribution for AB InBev brands once the takeover of SAB completes. The rulings come after the Budweiser owner came in for criticism, including from a US senator last month, about its distribution strength.

Craft brewer trade body the Brewers Association alleges AB InBev attempts to stifle competition by incentivising distributors to carry mainly AB InBev brands.

The judgement said that once the SAB deal clears, AB InBev would be prohibited from:

Buying a distributor if the acquisition pushes the percentage of AB InBev beer sold through its AB InBev-owned distributors above 10%.
Providing incentives or rewards to a distributor based on the percentage of AB InBev beer it sells compared to sales of AB InBev's rivals
Not providing US authorities with "advance notice" of any acquisitions of beer brewers "including craft brewers".

The Budweiser brewer will also have to follow through on its planned divestment of SAB's US JV, MillerCoors, to co-owner Molson Coors.

AB InBev said it welcomed the ruling, adding that it still expects the transaction to complete in the second half of the year. The brewer now has the green light in 21 global jurisdictions. It is unclear how many jurisdictions are outstanding.

The National Beer Wholesalers Association said: "The DOJ's actions go toward ensuring that the US market can remain a 'consumer pull' market through independent distribution, where consumer demand is what determines product choice and variety, and to prevent a 'supplier push' model where consumer choice is reduced."

Of the four countries that AB InBev deemed the most critical to the deal when it was announced, only China remains outstanding. South Africa and the European Union have both recently signed off on the deal.

Molson Coors said it welcomed the DoJ's approval to acquire SABMiller's 58% stake in MillerCoors, as well as the Miller brand portfolio outside of the US. "This represents a critical milestone on our journey to take full control of MillerCoors upon the closure of the AB InBev-SABMiller merger," said Molson Coors CEO Mark Hunter.

Read the original news here: http://www.just-drinks.com/news/us-gives-anheuser-busch-inbev-sabmiller-...

Navigation