Senators express concern about potentially anti-competitive practices by large beer conglomerates and distributors
WASHINGTON, D.C. –(ENEWSPF)–November 19, 2015. Today, U.S. Senators Angus King (I-Maine) and Jeff Merkley (D-Ore.) led a bipartisan group of Senators on a letter urging the U.S. Department of Justice to protect craft brewers across America from potentially unfair and illegal trade practices on the part of larger beer companies. In the letter, which was sent to U.S. Attorney General Loretta Lynch, the senators express concern about the possibility of larger beer companies pressuring beer distributers to favor their products, creating an unfair advantage for beer giants and limiting the ability of consumer to find craft brewers’ products in the stores, bars and restaurants where they shop.
“The past decade has seen a dramatic change in the American beer industry, which was long dominated by a small number of products from large brewers such as AB InBev and SABMiller. Craft beer now drives expansion of domestic beer sales. Small and independent craft breweries exist in all 50 states and the District of Columbia,” the Senators wrote in their letter. “As members with robust craft brewing industries in our states, we ask that you take the necessary steps to ensure that AB InBev’s purchase of SABMiller does not allow the new combined company to squeeze out America’s craft brewing industry, stifle innovation, further constrain beer distribution to U.S. retailers, or create further barriers to entry. Large multinational brewers should not be allowed to use their market power to limit consumer choice and access to small innovative breweries. Put simply, we believe craft brewers must be able to conduct their business without being denied access to necessary raw materials and distribution companies.”
The Senators particularly expressed concern about the potential for anti-competitive distribution practices to grow as the largest beer companies get even larger through mergers. On October 16, 2015, AB InBev’s, the world’s largest beer conglomerate, announced its intention to purchase SABMiller, the second-largest. The Senators raise concerns that AB InBev may try to use the acquisition to increase its already dominant market position, possibly by constraining distribution channels in order to crowd out smaller beer companies. Some reports have already suggested that the company uses its large market share to put pressure on distributors to favor AB InBev products, which could potentially be deemed an exclusionary and illegal practice.
The Senators also highlight the dramatic growth of small and independent craft breweries, noting that since 2011, the number of craft breweries in America has more than doubled from 1,776 to 3,739. Small and independent craft brewers contribute some $55.7 billion to the U.S. economy and support more than 424,000 jobs.
The letter was also signed by Senators Susan Collins (R-Maine), Richard Blumenthal (D-Conn.) and Chris Coons (D-Del.). The letter is available HERE