US: Anheuser-Busch InBev "working proactively" with DoJ over Modelo deal
Modelo is set to merge with A-B InBev early next year
A company spokesperson told just-drinks yesterday (14 November) that the firm believes the transaction “should be approved” and still expects it to close in the first three months of 2013. "We are working proactively with regulators to move through the review process efficiently," the spokesperson said.
It comes after US not-for-profit advocacy group the American Antitrust Institute (AAI) argued ths week that the Department of Justice (DoJ) should stop the deal to prevent “the march towards a US beer monopoly”.
“If the proposed transactions amount to a de facto merger between A- B InBev’s and Modelo’s product portfolios in the US, it is likely to create serious anti-competitive effects,” the AAI said.
It added: “In local markets with large Latino populations, current concentration levels and the post-merger increases may be even higher than they are nationally. The potential anti-competitive effects include reduced product variety and higher prices for consumers.”
Meanwhile, analyst Trevor Stirling of Bernstein Research said it is a “material possibility” that Modelo will have to off-load its Piedras Negras brewery, with 10m hectolitres capacity, to satisfy the DoJ.
“However, we do not view this as a deal-breaker as we think the crown jewel remains the Mexican domestic beer business for A-B InBev,” added Stirling.
It also emerged yesterday that the UK's Office of Fair Trading has approved the deal. Details of the decision have yet to be published, but are expected next week. An OFT spokesperson told just-drinks the full text would be made available after “both parties have a had a chance to redact confidential information” from the papers.
A-B InBev also received clearance for the deal from the Canadian Competition Bureau in September.
I can't remember precisely when I first saw the BRIC acronym. Indeed, with only ten years' experience of the drinks industry, it seems to be have been around longer than I have. I can remember, howeve...
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