Justice Department Moves To Block Beer Merger

Officials at the Justice Department have filed a lawsuit to block Anheuser-Busch InBev from buying Grupo Modelo which sells Corona. The government says preventing the acquisition is the only way to keep beer prices down.

Copyright © 2013 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

RENEE MONTAGNE, HOST:

NPR's business news starts with fears of a beer monopoly.

(SOUNDBITE OF MUSIC)

MONTAGNE: The Justice Department has filed a lawsuit to block Anheuser-Busch InBev from buying Grupo Modelo, the brewer of Corona.

As NPR's Ailsa Chang reports, the government says preventing the acquisition is the only way to keep beer prices down.

AILSA CHANG, BYLINE: Beer drinkers of America, the Justice Department says it's looking out for you. Right now, you spend about $80 billion a year buying beer. And the government says, you're going to be spending billions more if two beer giants get a little cozier with each other.

(SOUNDBITE OF BUD LIGHT AD)

UNIDENTIFIED WOMAN: This is so romantic.

UNIDENTIFIED MAN: Well, it's about to get a little more romantic. A little candlelight.

UNIDENTIFIED WOMAN: Ohh...

UNIDENTIFIED MAN: And, a little Bud Light.

UNIDENTIFIED WOMAN: Mmmm.

CHANG: Bud Light is the most popular beer in America, and that's one of the reasons its brewer - Anheuser-Busch - is the leading beer seller in the country. Modelo is number three.

If the two of them hooked up, Assistant Attorney General Bill Baer says they will control half of all beer sales in the U.S., and therefore, effectively determine the price of beer.

BILL BAER: It's the very kind of concern for anti-consumer impact that the antitrust laws tell us we're supposed to protect against.

CHANG: People who've been watching the beer industry says it's actually been consolidating for decades.

Barry Lynn of the New America Foundation, a policy group, says back in the late '70s, there were about 50 beer companies. That market is almost gone now.

BARRY LYNN: Although you have this huge explosion in the number of craft brewers in this country, those companies are really isolated in about five to six percent of the marketplace. They're essentially marginalized.

CHANG: Anheuser-Busch says it will be vigorously contesting the government's action in federal court.

Ailsa Chang, NPR News, New York.

Copyright © 2013 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

Support comes from: