Justice Department Blocks A-B Merger

The Justice Department is suing to block Anheuser-Busch InBev’s proposed $20 billion purchase of Mexican brewer Grupo Modelo. The Fed’s have been investigating the merger for anti-trust concerns. The review initiates pricing issues and InBev’s ability to control POS cost.

Anheuser-Busch and MillerCoors — already control 65 percent of sales nationwide. Adding Modelo’s 7 percent market share to Anheuser-Busch’s existing 39 percent market share eliminates competition and further concentrates the industry, The deal also g ives rights to sell Corona Extra one of the most popular import beers in the world. A-B had originally structured the deal to sell Modelo products in the U.S. through a third party – Constellation – with a ten-year contract that included price controls, according to the DOJ.

 A-B InBev reported to “ Vigously” fight back, saying the suit “is inconsistent with the law, the facts and the reality of the market place.” But it acknowledged that the deal will no longer close in the first quarter of 2013, as originally planned,  as reported by the Post Dispatch.

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