Think Tank Lambastes Big Beer Brewers, Modelo Sale

But beyond the talk of consumer power and federalistic local controls lies a more immediate case New America is making: that the Obama administration should block the sale of Grupo Modelo to AB-Inbev. The Justice Department has been studying the competitive effects of the merger, talking to distributors and craft brewers to determine how and if the deal should proceed, and whether AB-Inbev should divest from certain brands to avoid anticompetitive advantages.

"Brewing five gallons of homebrew in the White House is not a sufficiently powerful action," Lynn said, referring to the White House Honey Ale brewed by White House chef Sam Kass. Lynn called on the administration "to assist us in opening competitive markets again, free from domination from any very large companies."

As part of the deal, Modelo will sell its controlling share of Crown Imports, which distributes Modelo in the U.S. The deal would add Corona, the largest imported brand in the U.S., to AB-Inbev's portfolio.

Large brewers say they don't see New America's concerns as legitimate. The Beer Institute, the trade association composed of large and small breweries, including AB-Inbev and Miller Coors, pushed back against New America's criticism.

"Critics of today's brewers miss the point that small brewers in this country are already enjoying a generous tax advantage over larger brewers and all importers, a policy designed to open pathways to the marketplace. In fact, the small brewers in this country are experiencing explosive growth – their dollar sales were up 14 percent in the first half of 2012 – and they represent the fastest-growing segment within the industry, having added 442 new breweries in 2012 alone," said Beer Institute President John McClain, in a written statement provided to ABC News. "This indicates that the craft brewing sector is doing just fine producing high-end beer for high-income consumers, despite a sluggish economic recovery impacting hard-working, middle class Americans."

McClain's group finds itself in the tricky situation of commenting on a dispute between two factions among its members. It offered this defense after ABC sought comment from Anhueser-Busch, which contacted the trade group.

"Today's panel sounded a false alarm over alleged public health dangers stemming from consolidation among some brewers," McClain said. "Contrary to assertions made today, these moves by U.S. brewers and importers have proven to be positive for our consumers, as well as our investors and for the economy as a whole. Today, brewers contribute more than $223 billion to the economy in primary and secondary impact, and from supply chain businesses to retailers, beer helps employ more than 1.8 million Americans."

Calagione, for his part, isn't sure he opposes the deal. "I'm not saying we're 100 percent against it," he said, while expressing "grave concerns" over "more pressure against bringing craft brews to market."

Regardless of what New America, Calagione or the Beer Institute say, the $20 billion sale is entirely in the hands of the Justice Department. If it goes through, craft brewers will discover whether their fears are borne out.

Page
  • 1
  • |
  • 2
null
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...