Lawmakers balk at beer behemoth

The potential merger of the world’s biggest two brewers is running into resistance in Congress, with lawmakers saying the resulting beer behemoth would raise prices for the drinking public. 

Though still in the earliest stages, Anheuser-Busch InBev’ bid to buy chief rival SABMiller is already raising antitrust concerns.

“It concerns me very much,” Sen. Bernie Sanders (I-Vt.) told The Hill.

Sanders, a presidential candidate, said he believes such a beer merger would be symptomatic of big companies gaining more power throughout the economy.

“And it should be a concern to the American people who believe in a competitive economy that you do not have.”

Sens. Ron Wyden (D-Ore.), Richard Blumenthal (D-Conn.), and Angus King (I-Maine), along with Reps. Peter DeFazio (D-Ore.) and Raul Grijalva (D-Ariz.) are all urging the Department of Justice and other antitrust regulators to scrutinize any agreement the companies reach, the lawmakers said.

The two beer giants announced Wednesday they are negotiating a merger. Once Anheuser-Busch and SABMiller reach an agreement, the deal would be reviewed by regulators — both in Washington and across the globe — to make sure there is no loss of competition that could hurt consumers.

Together, the companies currently control produce about 70 percent of beer sold in the U.S. and 30 percent of the global market, experts say.

“The average beer drinker could see an increase in prices, and I’m hopeful we’ll have hearings,” Blumenthal told The Hill.

DeFazio suggested the beer merger could have a “potentially detrimental impact” on consumers.

The Oregon Democrat, who brews his own homemade beer, has never been a big fan of the companies behind Budweiser and Miller.

“Miller Light is like the Donald Trump of beers,” DeFazio told The Hill. “Tasteless.”
“Bud is like the Jeb Bush of beers,” he joked. “Flavorless.”

“If you merge two crummy beers, you get on really big crummy beer,” he added.

Before they could finalize the merger in the U.S., Anheuser-Busch and SABMiller would be required to gain approval from the Department of Justice and Federal Trade Commission.

The process could take months, and possibly even years, to complete.

Both companies would file pre-merger notifications with the government, providing information about their businesses and the broader industry. The DOJ and FTC would then have 30 days to review the proposal.

At that point, the government could ask the companies for more information. The agencies would then have another 30 days to review the additional materials.

After the government completes its review, it could either accept the proposed merger, negotiate a new agreement between the two companies, or challenge the deal in federal court.

Industry experts suggest it could pass muster if Anheuser-Busch agrees to sell the MillerCoors brand in the U.S.

MillerCoors is a joint venture between SABMiller and Molson Coors Brewing Company, created in 2007. Molson Coors is expected to take over full control of the joint venture if the merger goes through.

The divestiture would keep U.S. competition strong while paving the way for Anheuser-Busch to expand its international footprint and break into new foreign markets, they say.

Still, Democrats remain skeptical.

“I’m certainly concerned this merger could increase the price of beer for American consumers,” Wyden said. “Antitrust regulators need to take a long look at this proposed merger.”

Grijalva suggested the merger would remove the free market “checks and balances” that currently exist with competition between Budweiser and Miller for low-price beer.

“There would be a concern that a merger of that size, of that consequence, with that percentage of the market share, begs the question of who controls the price,” Grijalva said.

“With this merger it is a worry,” he added.