Press Clips: U.S. Senators Urge Careful Consideration of ‘MegaBrew’; New Hampshire Legislators Vote Against Direct Beer Sales

Antitrust Regulators, Watchdogs Share MegaBrew Concerns with DOJ


Lawmakers and antitrust experts in Washington have once again voiced their concerns with the Department of Justice over Anheuser-Busch InBev’s impending $106 billion acquisition of SABMiller.

Last Thursday, United States senators Amy Klobuchar (D-Minnesota) and Mike Lee (R-Utah) sent an open letter to Acting Assistant Attorney General Renata Hesse urging the DOJ to more closely scrutinize the so-called “MegaBrew” transaction and its potential impact on the U.S. beer market.

Klobuchar and Lee, both sitting veterans on the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, asked Hesse to place conditions on the deal that would limit the amount of influence A-B InBev or any other large brewing company could have over its distributors.

“We are concerned about any consolidation in the beer market that would make it harder for small brewers to make their products available to consumers, and in particular any significant increases in the acquisition or control of distributors by large brewers,” the letter read.

Although A-B InBev has agreed to divest SABMiller’s stake in MillerCoors, the U.S. joint venture with Molson Coors, the senators argued the deal could still make the company large enough to “foreclose” smaller brewers’ distribution networks.

The legislators’ concerns were supported by the American Antitrust Institute’s president and economist Diana Moss, who today sent Hesse a similar open letter asking the DOJ to set restrictions on the transaction.

Moss reiterated concerns she expressed during a congressional hearing about the deal in December, claiming that A-B InBev and Molson Coors would collude to control beer prices and distribution networks in the country unless otherwise checked by the DOJ.

“While the divestiture proposal may seem at first blush to be an easy fix, simply changing the name on the door from ‘MillerCoors’ to ‘Molson Coors’ is unlikely to neutralize significant anti-competitive and anti-consumer effects of the proposed merger,” Moss wrote.

Moss urged Hesse to consider whether the divestment to Molson Coors would create true and effective competition between the two businesses rather than a veiled partnership, or if the DOJ should instead require A-B InBev to sell MillerCoors to another buyer.

While Moss is hardly the first voice in Washington to raise antitrust concerns — the congressional small brewers caucus sent a similar letter to the DOJ in February — she is one of the few to outwardly question whether the government should permit the transaction at all.

“Putting aside any proposed remedy, the merger, if allowed to proceed, would incent A-B InBev to exercise market power both unilaterally and in coordination with rivals,” she said in today’s letter. “Such effects would likely stifle important competition from smaller market participants such as craft brewers, raise beer prices, reduce quality and choice, and jeopardize innovation in this important sector.”

A-B InBev’s purchase of SABMiller is undergoing similar investigations with antitrust regulators in China, South Africa, Australia and the European Union. The company hopes to complete the transaction later this year.

New Hampshire Senate Kills Direct Sales Bill


The New Hampshire Senate last week voted against a bill that would have allowed out of state brewers to sell directly to licensed New Hampshire beer retailers.

Originally introduced by co-sponsors Representative Adam Schroadter (R-Rockingham) and Representative Keith Murphy (R-Hillsborough), HB 1540, which had already passed through the House, died in the senate commerce committee meeting last Wednesday after a number of New Hampshire beer wholesalers lambasted the bill during a public hearing in March.

House Bill 1540 sought to include retailers in an existing law which allows New Hampshire residents to purchase beer from out-of-state stores or manufacturers and have it shipped directly to their homes. Under the amended law, retailers could have purchased up to 20 barrels of any beer not already distributed in the state from any “direct shipper” — a wholesaler, manufacturer, or other retail outlet.

Committee chairman Senator Russell Prescott (R-Kingston) told Brewbound that the bill was intended to give retailers a route to carry beers from breweries that have had a difficult time entering the state. Prescott, who was in favor of the bill, argued that smaller brewers looking to expand distribution into New Hampshire are deterred by beer wholesalers who view small brands as cost-prohibitive.

While he had hoped to keep the bill alive, Prescott said he was unable to find a successful middle ground with wholesalers and his colleagues voted the bill down.

“Maybe in another bill, in another time,” he said.

He expects new legislation that would help retailers expand their offerings to be proposed in 2017.

New Glarus Brewing to Begin Canning

New Glarus Brewing last week announced it would soon begin canning beers for the first time.

Wisconsin’s second-largest craft brewery posted a picture of a newly-acquired canning line on its Instagram account last Thursday, and announced it would soon offer its top two selling brands, Spotted Cow Farmhouse Ale and Moon Man Pale Ale, in the new package format.

The company is currently installing the new packing equipment and did not say when exactly the cans would become available.

“A lot of Wisconsin love will be going into those cans. The cans, the boxes, the beer, even the machine used to fill the cans,” the post read.

Flying Fish Brewing Sells Stake to Private Investors


In an interview with Fortune earlier this month, Flying Fish founder Gene Muller confirmed that his New Jersey-based brewery had sold a stake to the Lynette and Haggerty families — owners of the national media company Times-Shamrock Communications — for an undisclosed sum.

“For us it was important to be a local, family-owned business and be around for the long haul,” he said.

According to Fortune, the investment allows Flying Fish to pay off debts, give initial investors a return and will pave the way for future growth opportunities. Although Muller did not detail his future plans for the brewery, he said he had no intentions of selling it any time soon.

“I put 25 years into this and I highly doubt I would throw that away for a big sack of money,” he told the outlet. “Never say never, but my motivation wasn’t the money. That’s never been the driving force.”

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