The DoJ Defends Cheap Beer
Anheuser-Bush InBev’s (NYSE:BUD) Bud Light is the best-selling beer in America. AB InBev reported $39 billion in revenue last year, and is expected to report $39.8 billion this year, with 31.3 percent of its sales volume coming from North America. That’s 124 million hectoliters of beer.
Grupo Modelo, which sells Modelo and Corona Extra, exported 16.9 million hectoliters of beer in 2011. With their powers combined, they could control the American beer market with an iron fist, raising prices and snuffing out competition.
At least, that’s what the U.S. Department of Justice thinks. Four years ago, AB InBev, which already controls a 50 percent non-controlling stake in the Mexican company, announced its plans to pursue a total acquisition. The combined entity would put the famed Corona and Budweiser brands side by side, combining AB InBev’s 14 billion-dollar brand labels with Modelo’s three. Together they would control seven out of 10 top beer brands in the world.
But power corrupts, and the DoJ has filed an anti-trust lawsuit against the merger…