AB InBev and SABMiller deal “largely irrelevant”, says analyst
Anheuser-Busch InBev’s possible buyout of SABMiller could be the beer market’s last great consolidation event, but it would have little impact on the dominant trends affecting the industry, according to a leading drinks analyst.
Spiros Malandrakis, senior alcoholic drinks analyst at Euromonitor, was responding to the SABMiller’s confirmation overnight of an approach by AB InBev.
“Beyond the financial and cost savings side of such a potential deal, there is little doubt that macro-beer is now gazing at the event horizon of the merger and acquisition era,” the analyst said.
“As the craft movement is coming of age and solidifies its position as a key disruption force within beer and the entire alcohol industry, corporate consolidation can perhaps provide some last drops of stock market intoxication but will remain largely irrelevant to the scores of millenials seeking alternatives to big beer’s offerings.
“Innovation and small scale experimentation will decide future growth trajectories if not respective size and margins,” he said.
Paul Gatza, who represents independent American brewers as director of the Brewers Association, predicted US regulators would require that the Miller component in the US not be included in the deal for concentration of market concerns.
“That means that Miller brands in the U.S. could be sold off to MolsonCoors or other large international entities inside or outside of the current beer universe,” he said.
Likely Australian implications
Market concentration concerns would be unlikely to arise in Australia, with the Australian Competition and Consumer Commission (ACCC) having previously approved SABMiller’s acquisition of Foster’s (Carlton & United Breweries) in 2011.
AB InBev superseding SABMiller as CUB’s parent company would not appear to materially alter the competitive environment in beer.
However, it would likely result in a future distribution reshuffle, with CUB’s rival Lion currently distributing Corona and other AB InBev-owned brands in this market.
Coopers Brewery managing director Dr Tim Cooper said a successfuldeal between the companies “will place significant additional pressure on the brewing industry suppliers going forward and result in a further loss of diversity”.