The Wall Street Journal reports that "Anheuser-Busch InBev NV’s new plan to reverse declining volumes in the U.S.—by rewarding distributors who focus on brands like Budweiser and Bud Light—is raising alarm among craft brewers who worry it will make it harder to get shelf space for their IPAs and porters."
The world's largest brewer, the Journal reports, has "introduced a new incentive program that could offer some independent distributors in the U.S. annual reimbursements of as much as $1.5 million if 98% of the beers they sell are AB InBev brands ... Distributors whose sales volumes are 95% made up of AB InBev brands would be eligible to have the brewer cover as much as half of their contractual marketing support for those brands, which includes retail promotion and display costs."
The program has been introduced just as Anheuser-Busch InBev is trying to convince federal regulators that a proposed $10-8 billion acquisition of the world's second largest brewer, SABMiller, would not reduce competition in the marketplace.
"Craft brewers fear AB InBev’s new incentive program could do just that," the Journal writes. "They say the program encourages AB InBev distributors around the country to drop competing brewers and discourages them from stocking new brewers. They added it could make it impossible to get distribution from some of the nation’s strongest distributors."
The world's largest brewer, the Journal reports, has "introduced a new incentive program that could offer some independent distributors in the U.S. annual reimbursements of as much as $1.5 million if 98% of the beers they sell are AB InBev brands ... Distributors whose sales volumes are 95% made up of AB InBev brands would be eligible to have the brewer cover as much as half of their contractual marketing support for those brands, which includes retail promotion and display costs."
The program has been introduced just as Anheuser-Busch InBev is trying to convince federal regulators that a proposed $10-8 billion acquisition of the world's second largest brewer, SABMiller, would not reduce competition in the marketplace.
"Craft brewers fear AB InBev’s new incentive program could do just that," the Journal writes. "They say the program encourages AB InBev distributors around the country to drop competing brewers and discourages them from stocking new brewers. They added it could make it impossible to get distribution from some of the nation’s strongest distributors."
- KC's View:
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I'm with the MNB reader who sent me a link to this story yesterday with the note, "They'll separate me from my craft beer when they pry it from my cold, dead fingers."
I'm no lawyer, but as a consumer, just on the face of it, I think it would be an utter travesty if the acquisition of SABMiller by Anheuser Busch InBev is approved by regulators, especially in the face of these incentive programs, which seem totally focused on reducing craft brewers' access to the marketplace.
The story makes clear that this would hurt the prospects of big craft brewers ... one can only imagine the damage it would do to the smaller companies, which is where a lot of innovation takes place.
If the feds block Staples' purchase of Office Depot, but leave this alone, it will be some sort of governmental malpractice ... or to put it another way, a total crock.
