Last December, Lee and Klobuchar held an Antitrust Subcommittee hearing on Anheuser-Busch InBev’s proposal to purchase SABMiller for over $103 billion; the hearing examined how the proposed merger of the world’s two biggest beer producers would impact competition and consumers across the country

WASHINGTON, DC – U.S. Senators Mike Lee (R-UT) and Amy Klobuchar (D-MN), the chairman and ranking member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, today urged the Department of Justice (DOJ) to carefully consider the proposed SABMiller and Anheuser-Busch InBev merger. Last December, Lee and Klobuchar held a hearing on Anheuser-Busch InBev’s proposal to purchase SABMiller for over $103 billion. The hearing examined how the proposed merger of the world’s two biggest beer producers would impact competition and consumers across the country.

“We are concerned about any consolidation in the beer market that would make it harder for small brewers to make their products available to consumers, and in particular any significant increases in the acquisition or control of distributors by large brewers,” wrote the lawmakers. “The Department of Justice must be confident that the merger does not alter the incentives or abilities of ABI or MillerCoors to foreclose craft or import brewers’ access to distribution. If the Justice Department has concerns with the merger, we urge careful consideration of conditions to ensure adequate protections for competition and consumers.”
The full text of the lawmaker’s letter is below:

Dear Ms. Hesse:

We write to you regarding the proposed acquisition of SABMiller by Anheuser-Busch InBev (ABI) currently being reviewed by the Department of Justice. While we take no position about the legality of the merger under the antitrust laws, we believe it affords an opportunity to raise important competition issues that the Department should carefully review.

The beer market in the United States, unlike many other industries, has seen a significant increase in competition over the past forty years. In 1978, there were fewer than 50 brewers in the United States. As of 2015, we have over 4,100 craft brewers. In the last 20 years, craft brewers’ sales have grown from one percent of the beer market to 11 percent. This competition is good for consumers and encourages the larger brewers to innovate and offer a greater variety of products. Consolidation in this market should occur only if it does not disrupt this thriving competition.

The success of craft brewers depends on access to retail markets, specifically through wholesale distribution. The current strong and independent distribution system offers opportunities to craft beers, not just the large brewers, and has helped create the most diverse beer market in the world, with thousands of breweries working through independent distributors to ensure access to market. We are concerned about any consolidation in the beer market that would make it harder for small brewers to make their products available to consumers, and in particular any significant increases in the acquisition or control of distributors by large brewers. The Department of Justice must be confident that the merger does not alter the incentives or abilities of ABI or MillerCoors to foreclose craft or import brewers’ access to distribution.

On December 8, 2015, we held a hearing in the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights in order to hear from brewers and others in the marketplace about the potential impact of this merger. The CEOs of ABI and Molson Coors were adamant that the merger would not harm the competitive landscape of the beer market in the United States. With regards to beer distribution, Carlos Brito of ABI stated that “we do not expect any changes to the Anheuser-Busch distribution system as a result of the combination or divestiture,” and Mark Hunter of Molson Coors said that “we have no intention of purchasing other distributors.”

We appreciate the candor of those witnesses. If the divestiture eliminates competitive concerns, the merger should be approved. As with any merger consent decree, the conditions must protect competition. At the March 9, 2016, antitrust oversight hearing, you referenced the 2013 ABI acquisition of Grupo Modelo. The final order included conditions to address Department of Justice concerns about that acquisition’s potential impact on distribution. The Division should consider whether there needs to be conditions to address similar issues here.

This is an important merger that we are sure is receiving serious attention by the Justice Department. As you review the proposed merger and divestitures, it is important to ensure that the statements made by Carlos Brito and Mark Hunter during the December 8 hearing accurately reflect the framework and impact of the merger. If the Justice Department has concerns with the merger, we urge careful consideration of conditions to ensure adequate protections for competition and consumers.

Thank you for your attention to this matter.

Sincerely,