AB InBev CEO defends mega-merger

AB InBev CEO Carlos Brito has defended his company’s takeover of rival brewer SABMiller to a doubtful US Senate committee as he faced questions over its impact on the US beer market.

AB Inbev CEO Carlos Brito was one of several witnesses called in front of the Senate Judiciary Committee (Photo: AB InBev)

Senators expressed their worries about the merger, saying that it could threaten the country’s burgeoning craft beer sector.

Distribution was a particular focus of the hearing on Tuesday, as Senators aired fears that smaller beer brands will find it more difficult to find a way into stores following the takeover.

They also questioned Brito over the possibility of the megabrewer dominating demand for supplies such as hops, barley and aluminium.

The three-tier distribution setup in the US insists that brewers must sell their products to distributors before they can be sold on to retailers and on-trade venues.

AB InBev owns 21 distributors across America, allowing its beer brands greater access to consumers.

Brewers’ Association CEO Bob Pease, who was also present at the hearing, called on the Justice Department to force AB InBev it to offload its distribution interests to try to ensure a fairer marketplace for smaller brewers.

“Nobody wants to take a seat at a bar and discover their only choices are between a Bud and a Miller,” said Democrat Sen. Chris Coons.

But Brito insisted the merger is taking place in order to better AB InBev’s access to new markets in Asia and Africa.

“What this combination is not about is changing our competitive position in the U.S,” the Wall Street Journal quotes him saying.

AB InBev’s £71 billion takeover of SABMiller was announced in November. The world’s largest brewer has pre-emptively begun selling off assets worldwide in order to appease competition authorities.