Antitrust and Beer

Antitrust and Beer

The New York Times
Antitrust Agreement in Merger of Brewers
By EDWARD WYATT
WASHINGTON — Anheuser-Busch InBev, the country’s largest brewer, agreed on Friday to sell the United States rights to several foreign brands, including the top-selling Corona, in a deal that regulators say will ensure competition in beer prices.
The settlement of the Justice Department’s antitrust lawsuit means that Anheuser-Busch InBev, which controls 39 percent of the American beer market, can go ahead with its $20.1 billion takeover of Grupo Modelo of Mexico, the brewer of Corona.
But as part of the agreement, Anheuser will sell Modelo’s 50 percent stake in Crown Imports, which distributes Corona and other Modelo brands in the United States, to Constellation Brands, which already owned the other half.
For American consumers, the agreement will help keep beer prices down, government officials say, although there will be little practical effect on what beer buyers will see when they go shopping.
“This is an $80 billion market,” said William J. Baer, an assistant attorney general who oversees the Justice Department’s antitrust division. “Even a 1 percent price change would cost consumers $1 billion a year. This agreement will help to keep the market competitive, dynamic and quite healthy.”
The Justice Department’s antitrust division filed a lawsuit in January to block the merger. The government’s opposition was a big blow to Anheuser-Busch InBev, which saw the acquisition as vital to its push to expand in Mexico and the rest of Latin America. In February, the two sides announced they were in talks to resolve the antitrust concerns.
The settlement will leave Constellation — one of the country’s largest wine producers — with full and permanent rights to make and sell Corona, Corona Light, Modelo Especial, Pacifico and six other brands in the United States.
“Ultimately, nothing will change for consumers in the U.S. as a result of this transaction,” said Laura Vallis, a...

Similar Essays