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GooseIsland_LogoUnless you have been living under a rock this past year, you are well aware that Anheuser-Busch InBev has been on a never-ending craft brewery shopping spree. First, let’s rewind for a moment and look back at last fall’s acquisition of Bend, Oregon’s 10 Barrel Brewing. Although Inbev had acquired other craft beer brands in the past such as Goose Island Beer Company of Chicago, IL in 2011 and Blue Point Brewing of Patchogue, NY in 2014, 10 Barrel Brewing really hit home for me. They are native to my home state of Oregon and a brand I enjoy. Who would have guessed that that was just the beginning of such a productive yet disruptive year for Inbev.

AB-Craft Brands

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The first acquisition of 2015 was Elysian Brewing located in Seattle, WA. A pioneering brewery, whose founder, Dick Cantwell, is a prolific champion of craft beer. This was a startling surprise in the craft beer industry. Elysian needed the capital and resources to grow and Inbev could provide that. Cantwell was not happy about this deal and resigned several months after the acquisition. In July, Cantwell joined the Brewers Association as their Quality Ambassador.

 

In September Golden Road Brewing of Los Angeles was acquired by InBev. This acquisition was less of a surprise since it is now evident that Inbev is on a steady craft brewery shopping spree and Golden Road Brewing was a prime target since they were designed as a growth brewery from the beginning. They are well funded, have the right team and are located in Los Angeles, which is an underserved craft beer market.
Golden Road Brewing LogoIf this was not enough change, the biggest surprise came a week prior to the Golden Road Brewing announcement when Inbev announced their intent to acquire the second largest beer company in the world, SABMiller for $104 Billion. If anything in the past year is a blow to the craft beer industry, this by far would be the one that could have the biggest impact. If these two brands combine they will control more than 30% of the beer market worldwide. With their recent acquisition of craft breweries, superior distribution channels and nearly unlimited resources, Inbev will control the market resulting in a monopoly.

 

Most recently the US Justice Department is looking into allegations that InBev is trying to make it harder for fast growing craft breweries to have their products stocked in the shelves of stores. This is due to the fact that InBev has purchased 5 distributors in 3 states. In some states, it is a requirement to have a distributor to sell their products. The 3-tier system is made up of manufacturers, distributors and retailers. If Inbev controls 2 out of 3 channels (manufacturing and distribution) they will have an unfair advantage in the marketplace.

 

As a consumer this means higher prices since there is less competition. It will be harder to find your favorite craft beer in stores as well as the potential for less selection of beer brands in general. Inbev will most likely have to drop some of their brands to meet federal regulations as well as to cut costs shifting their focus to their higher performing brands.

 

The good news is there are over 4,000 craft breweries in America and the industry is still growing. In my opinion less than 1% will sell out, leaving us many options to support local, artisanal craft beer. Craft breweries are innovative and can react nimbly to local demand. Many of them are located in neighborhoods and will continue to thrive with the support from locals. Only time will tell what affect Inbev’s shopping spree will have on the craft beer industry. Will U.S. antitrust regulators put a stop to Anheuser-Busch InBev and SabMiller becoming one company? I sure hope so.

 

Below is a list of Inbev’s acquisitions and attempted acquisitions:

 

ANHEUSER-BUSCH INBEV ANNOUNCED BUYOUTS THIS YEAR

 

Announced date, Target

10/9/2015, Mill Street Brewery

9/23/2015, Golden Road Brewing

9/17/2015, SABMiller (first announced)

9/4/2015, Virtue Cider

9/2/2015, Horizon Beverage Co., Oakland distribution

8/4/2015, American Eagle Distributing

7/24/2015, R. Ippolito Distributing

7/7/2015, Beertech Bebidas e Comestiveis

5/4/2015, Bogota Beer Co.

2/16/2015 InBev India

2/10/2015, Tropical Juice Comericio

1/23/2015, Elysian Brewing

 

Source: USA Today

 

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