PostHeaderIcon Justice Department Battles Against Alcohol Monopoly Merger

Earlier this month, the United States Justice Department argued against a planned merger of two of the world’s primary beer vendors. The merger would have been a proposed $20.1 billion dollar deal for Anheuser-Busch InBev to buy-out Mexico’s Grupo Modelo, which is the maker of Corona and Modelo beer amongst others. The super deal would possibly allow Anheuser-Busch InBev a monopoly over too many of America’s most popular alcoholic beverages. The U.S Justice Department has battled against the deal by proclaiming that it would limit competition and possibly cause expanded alcohol prices in the usa. The deal would have merged the United States top beer seller with its 3rd biggest beer vendor effectively monopolizing the market for Anheuser-Busch InBev.

The Proposed Merger Deal

Anheuser-Busch InBev had been getting ready to increase it’s currently enormous accounts which include the brand names Budweiser, Bud Light, Stella, Becks and many others with the purchase of Grupo Modelos remarkable collection including Corona Extra, Corona Light and Modelo. AB InBev currently controls 49% of Grupo Modelo and was prepared to shell out $20.1 billion to buy the remaining shares inside the organization. The United States Justice Department antitrust department fought against the merger and it appears for now at least that the merger is not going to occur.

Very similar Monopolies Opposed Lately

The antitrust division in the Justice Department continues to be very active in recent years shutting down deals they believe may hurt the United states consumer. This past year they fought against a deal between the telecom big players AT&T together with T-Mobile which would have transformed the entire landscape of the phone industry. The antitrust section of the Department of Justice acts as the watch dog over large business mergers in america which could limit the encouraged levels of competition between businesses.

Winners and Losers of AB InBev – Grupo Modelo Terminated Merger

Even though the American public is possibly the biggest victor of the deal failing, there were a lot of losers within this deal. Both AB InBev and Grupo Modelo have lost huge because of the merger falling through, but smaller sized corporations also suffered. Constellation Brands, another top spirits producer which governed the legal rights to distribute Grupo Modelo’s product in america will more than likely lose out big when this deal falls through. As part of the deal AB InBev had accepted a long term deal with Constellation for them to continue to have distribution rights of Grupo Modelo’s products in the United States.

There are more alcohol products in the states today, than ever before, yet the majority of the biggest brand names all fall under a couple of corporate umbrellas. Anheuser-Bush InBev, MillerCoors and Grupo Modelo control the vast majority of sales of alcoholic drinks in america. The competition between these corporations is important to the United States consumers, because without it the rates could skyrocket. The U.S Department of Justice has prevented a likely disastrous merger for now with the interest of the American consumers in the center of the debate.

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