Anheuser Busch InBev chief executive Carlos Brito was put through his paces yesterday as members of the US Senate Judiciary Committee voiced concerns that the £71bn merger between the world’s two largest brewers AB InBev and SABMiller, would harm consumers and competitors in the US.
Brito was appearing in front of the Committee with Molson Coors chief executive Mark Hunter to try and assuage antitrust fears over the biggest ever British corporate merger, which will create the world's biggest brewer, accounting for about half the industry’s total profit.
Senator Richard Blumenthal was not alone in voicing fears that independent brewers and distributors would be forced out of the market. “We’ve seen this movie before with the airlines, and it didn’t end well for consumers then,” he said. “This merger would clearly break the law. Whether a remedy can be fashioned is the million, or I should say billion-dollar question.”
Read more: Megabrew is here: now the hangover begins
Bob Pease, chief executive of the Brewers Association, which promotes independent craft brewers, worried the MillerCoors sale was not enough to protect smaller brewers’ access to markets, and the two companies should be forced to sell-off the wholesalers they owned.
Senator Chris Coons echoed this by saying no one wanted to sit in a bar only able to choose between a Bud or a Coors.
Senator Al Franken also raised concerns about the size of the debt AB InBev had raised to fund the takeover- a record $75bn of it.
Brito repeatedly promised there would be no impact on the US market, and no contract terminations or renegotiations in the wake of the merger. He said the focus of the merger would be access to new markets in Asia and Latin America.
The deal has yet to pass regulatory scrutiny, and competition concerns are expected to be a significant hurdle. AB InBev is planning to sell off SABMiller’s stake in MillerCoors to co-owner Molson Coors for $12bn. The Chinese authorities are also expected to voice concerns over the mega-merger.
AB InBev and SABMiller formally agreed on a deal worth £44 a share on 11 November, after months of negotiations, and several extended deadlines from UK regulators as the two brewing giants ironed out the details of the massive deal.