Exclusive: U.S. probes allegations AB InBev seeking to curb craft beer distribution

Mon Oct 12, 2015 5:51pm EDT
 
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By Diane Bartz

WASHINGTON (Reuters) - The U.S. Justice Department is probing allegations that Anheuser-Busch InBev (ABI.BR: Quote) is seeking to curb competition in the beer market by buying distributors, making it harder for fast-growing craft brewers to get their products on store shelves, according to three people familiar with the matter.

In the past few months, the world's largest brewer has rattled the craft beer world by striking deals for five distributors in three states. Many states require brewers to use distributors to sell their product, and once AB InBev buys a distributor, craft companies say they find that they can't distribute their beer as easily and sales growth stalls.

Antitrust regulators are also reviewing craft brewers' claims that AB InBev pushes some independent distributors to only carry the company's products and end their ties with the craft industry, two of the sources said, noting that the investigation was in its early stages. AB InBev's purchase of several craft beer makers in recent years means that it is in a position to offer a greater variety of products itself.

State regulators in California, where AB InBev announced wholesaler purchases in Oakland and San Jose in September, are also looking into the matter, the people familiar with the matter said.

The beer giant confirmed that it was talking to regulators. "Anheuser-Busch has been in communication with the Department of Justice and California attorney general’s office about the transactions. We are working cooperatively to address any questions they have," an Anheuser-Busch spokesperson said in an email.

Craft brewers, who produce everything from well-crafted classics to odd flavors such as pumpkin or raspberry beer, have been a bright spot in an otherwise dull U.S. beer market. While beer sales rose 0.5 percent in 2014, craft beer sales rose by 17.6 percent to capture 11 percent of the U.S. market.

The Justice Department review comes at an awkward time for AB InBev as it is seeking to buy No.2 SABMiller Plc SAB.L for more than $100 billion in what would be the biggest-ever merger of brewers. AB InBev is widely expected to sell SABMiller's stake in U.S.-based MillerCoors if the merger goes through, leaving its U.S. market share unchanged at 46.4 percent.

Small craft brewers have already been rattled by AB InBev's purchases of craft beer makers, including Golden Road in September, Blue Point Brewing in 2014 and Goose Island Beer Co in 2011.   Continued...

 
View of the Anheuser-Busch InBev logo outside the brewer's headquarters in Leuven February 26, 2014.   REUTERS/Francois Lenoir