Taking into account the merger that will be made between the largest beer production company in the US with SAB Miller, AB InBev is being sued for planning to sell the Peroni and Grolsch brands off to any buyer, thus shifting the market considerably.
The merger between AB InBev (Anheuser-Busch InBev) and SAB Miller is currently underway after AB bought SAB for over 110 billion dollars and is considered to be the largest merger in the corporate world up to this date. After this completes, the AB InBev will have ownership of over 35% of the global beer production market, with the two companies accounting for over 70% of the total beer production and distribution in the US.
Even if from the company’s viewpoint, the move of selling Peroni, Grolsch, and Meantime brands to potential buyers is an extremely profitable move, giving them a better way to involve themselves in the European beer markets, people who work at the factories producing said brands are now under the threat of losing their jobs.
AB is currently on the defensive concerning the lawsuit issued by 23 consumers from the state of Oregon in federal court on this week’s December 1st, on Tuesday. The company claims that due to the increase in craft breweries and a strong market, the next logical step is to maintain the pro-active approach that it had over the past few years and try to extend its reach into foreign markets.
But even if the current beer market is strong, a steady growth shown by local producers as well as an increase in public interest towards cocktails and other alcoholic beverages might eventually overthrow the demand for beer. By creating a type of insurance policy gained through a potential spread in European markets, if push comes to shove, the company will have a safety net on which to fall on.
The merger made between the two giant companies after the completion of the contract will not change how the market currently is or its strong competitive nature, or so that’s what the company claims. Whatever this partnership will bring will be carefully watched and studied by competitors from both the US markets as well as the European and Asian markets, due to the massive size and widespread which the new company will have.
The chances that after AB InBev is being sued for planning to sell the Peroni and Grolsch brands the company will stop its plans are slim if the federal government will not find the guilty mainly due to the fact that their plan of spreading to foreign markets hinges on making some space in order for their more popular brands to grow.