Beer merger leaves future uncertain for other brewers

Associated Press

LONDON

It’s no fun being in the middle.

Heineken, Molson Coors and Carlsberg are storied brewers that trace their roots back hundreds of years and have loyal drinkers around the world. But the merger of their two biggest competitors leaves such midsize competitors without a clear way forward.

They find themselves squeezed between a Goliath that will produce almost a third of the world’s beer and a growing army of craft brewers.

Some experts say the midsize brewers should respond by pursuing takeovers of their own. Others argue that would do little good because the underlying problem is that consumers are increasingly drinking craft beers, not mass-market brands.

“There are so many craft beers out there,” said Jonny Forsyth, a global drinks analyst at Mintel. “They can’t buy them all up.”

Discussions about world domination heightened Wednesday when Budweiser maker Anheuser-Busch InBev agreed to buy SABMiller for $107 billion. That combination would account for 29 percent of the world beer market, making it three times bigger than its nearest rival, Heineken, with a mere 9 percent, according to the market data firm Euromonitor.

Beer makers looking to bulk up in response will have few options because some of the likely targets are privately held and not interested in selling, said Jeremy Cunnington, the senior alcoholic drinks analyst for Euromonitor.

“There isn’t that much else to buy or acquire,” Cunnington said.

Heineken has public shareholders, but the family owns 50.5 percent of the shares, “retaining family involvement and vision.” Carlsberg is also controlled by a foundation, which has 75 percent of the votes.

To ease regulatory concerns in the United States, SABMiller will sell its 58 percent stake in a venture with fellow brewer Molson Coors for $12 billion.