The Deal Goes Through: Hello Anheuser-Busch InBev

InBev shareholders approved the $52 billion takeover of Anheuser-Busch this morning. Looks like the new company name will be Anheuser-Busch InBev, and it will be the largest brewer in the world.

By far. Fifty percent of the US market, ten percent of Russia and China.

What has been most interesting to me about all this is not that one large brewery would combine with another (Miller-Coors, or Heineken's growing empire of brands) but the reaction by some that AB is somehow a "national" brand. You hear talk of 'monopoly!" and "they're going to Belgianize Budweiser!" (If only!) It's interesting that only now are people screaming monopoly.

You cannot understand the meaning of the 21st Amendment and the resulting caselaw without an understanding of the history behind it. The big brewers, AB, Coors, Miller, Pabst, etc., were all in operation before prohibition and their growing power and influence was one of the justifications for prohibition. People feared the concentrated influence and capital of the big brewers (just as they feared the power of other industrial Trusts at the time). In 1933 the three-tier distribution system was theorized by Fosdick and Scott to disrupt the power of these monopolies, as was anti-tied-house legislation. (Btw: Fosdick and Scott is an amazing read, too bad the only print copies for sale on Amazon start at $250...some day!)

The post-prohibition story of American beer has been one of consolidation and homogenization. From thousands of local breweries prior to Prohibition, the national brewing landscape by the end of the 1970s consisted of 44 breweries. So now we come full circle and are facing a scale of monopoly in the large breweries that the prohibition-era lawmakers could never have dreamed of. What will be interesting to see in the coming years is whether the laws that resulted from the 21st Amendment can still achieve their original goals (whatever the courts may currently state those to be...) in the face of what is now the third largest consumer product company in the world.

And do we still want them to?