Senators express skepticism over big beer merger

Senate lawmakers want to ensure competition from local craft brewers isn’t squandered by the proposed merger of the world’s top two beer producers.

The Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights held a hearing Tuesday to examine Anheuser-Busch InBev’s offer to buy SABMiller for over $100 billion.

“Wholesalers make decisions everyday on what brands to put on their trucks,” said Sen. Amy Klobuchar (D-Minn.), the committee’s ranking member. “I want to make sure consumer choice not producer power drives that decision.”

{mosads}Carlos Brito, CEO of Anheuser-Busch InBev, said the main goal of the transaction is to expand Anheuser-Busch InBev brands to Africa, Asia and parts of Latin America.

“This transaction is really about the rest of the world,” he said, later adding that because of that there will be no effect on the way the company conducts its business in the U.S.

Craig Purser, president & CEO of National Beer Wholesalers Association, however, expressed concerns that Anheuser-Busch InBev will distribute more of its own beer as a result of the merger and terminate its relationship with the independent distributors that are now free to choose which brands to distribute.

Sen. Richard Blumenthal (D-Conn.) asked Brito if the company could commit to maintaining only 10 percent ownership of distribution. Brito said he could commit to keeping distribution around 10 percent.

“Today, by the way, we are between 7 and 8,” he said “So we said 10. Could be 7 or 8, could be 11 or 12.”

Well, Blumenthal said 11 to 12 percent is different from 7 to 8.

“Let me be very blunt, what we’ve seen over the last year is a trend toward mammoth beer behemoths in our market and the result has not been a happy one for many of our consumers,” he said. “Whatever the complex analysis may be of the market, and metrics and legal issues, through the eyes of consumer the result has been higher prices.”

This story was updated at 2:17 p.m. to clarify Anheuser-Busch InBev’s ownership of distribution.