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AsAB InBevandSABMiller, the world's two largest beer companies,negotiate termsof theirplanned $106 billion merger, a group of beer enthusiasts have filed a federal lawsuit against what they perceive as a monopoly in the making.
Based primarily in southern Oregon and with no clear connections to the beer industry, 23 plaintiffs argue in a suit filed December 1 that the proposed deal violates antitrust laws and that an "effect of the proposed acquisition may be substantially to lessen competition," increasing prices and hurting consumers. Oregon isa particular bastion of local beer, with hundreds of craft breweries who have an estimated $2.83 billion impact on the local economy.
If AB InBev's takeover of SABMiller is successful, the resulting conglomerate would control over 30 percent of the global beer market, nearly 75 percent of the American market, and have an unprecedented hold on distribution, which separates beer's production from its wholesale and retail sales. The U.S. Justice Department isalready investigating allegationsthat AB InBev is using unfair distribution practices to squeeze out the competition.
The lawsuit isn't currently seeking any money beyond legal fees, insisting that the merger would cause "irreparable harm for which damages will be unable to compensate plaintiffs, in that competition once lost cannot easily be restored."
AB InBev said in a statement that it's not trying to limit competition, suggesting "nothing in this transaction will change" the fact that the "U.S. beer market has never been more competitive." ButThe Oregonianspoke to lead plaintiff James DeHoog— president ofan automotive repair company—who asked, "Why do we want to allow one entity to control that market?" See the filing in its entirety below.
AB InBev told Bloombergthe claims in this lawsuit are "without merit." John Blood, vice president of legal and corporate affairs said in a statement, "The U.S. beer market has never been more competitive, with strong growth from craft brewers, and nothing in this transaction will change that fact."
Update 12/4; 10:05 a.m.:This post has been updated to include a statement from AB Inbev.
