Big Buds getting even closer: InBev/Modelo Merger

Original article from the Associated Press, Feb. 5th, 2013: Budweiser Corona Merger Challenged over Competition Concerns

As if Budweiser wasn’t satisfied with brewing the most ‘satisfying’ beer on Earth, it is now looking to add the most popular and ‘satisfying’ American import--Corona--to its massive ownership of the beer market. And we really feel ‘sorry’ that the Department of Justice (DOJ) has put the brakes on such a seemingly ‘legit’ deal between Anheuser-Busch InBev (ABI) and Grupo Modelo.  Really, we’re just ‘broken up’ about ‘it’… ‘.’

Budweiser is looking to buy the one company that has kept the two Big Brewers--ABI and MillerCoors--from controlling beer prices in the US. As the two big boys control around 70% of the US market and attempt to work together for price manipulation, Modelo has always competed by maintaining lower prices. The DOJ has stated that the merger would monopolize the beer industry. ABI would creep towards 50% ownership of the market and drive beer prices up, because God forbid you pay $2.00 for a Bud Light Select tall boy rather $1.50.

Lest we forget that InBev is already half owner of Grupo Modelo to begin with, so you’ll find Coronas and Buds commuting together in every major city. Lest we forget that Budweiser already owns dozens of breweries across the US and the world, some of them quite good ones. Lest we forget that pesky but valiant 25% of the beer market that includes craft breweries; whose creativity, quality, and higher alcohol content have inspired ABI to launch Bud Black Crown… the dark corporate wizard of beers. Lest we forget that we still have a blog to write.

What could this merger possibly mean for those of us who define summer with a lime-wedged Corona, or those of us who avoid the long cooler filled with the King of Beers all together (or pick up some Buds because we didn’t lest-we-forget our wallet at home)? Does any of this merger noise even matter?

Us 2 Brewths don’t have vast amounts of economic knowledge, but let’s pretend that you think we do. If Bud and Modelo actually buddy up, then prices might increase. But if craft beers hold their prices, the market might just swing their way. Why bother spending X amount of dollars when the alternative is only X.75? As effective as InBev's behemoth of an advertising campaign is--with its talking animals, ethnically diverse raves, and football-to-the-groin humor--the dark sinister label of monopoly might scare away a few Americans from drinking such a threat to the marketplace. Americans might look for a more honest alternative. Remember, we’re still pretending we know what we’re talking about.

So what’s your take on it all? Do you have any scruples with Big Beer? Would such a merger change the way people buy beer and if so, how? Also, what is your go-to Big Brew and when do you drink it? Finally, since we are all in need of some happy weather thoughts- what is your preferred beverage for the summer, alcoholic or not?