Current Weather
The Spy FM

U.S. Moves To Halt AB InBev’s Purchase Of Grupo Modelo

Filed by KOSU News in US News.
January 31, 2013

A $20.1 billion merger of beer conglomerates is now delayed, after the U.S. Justice Department sued to stop Anheuser-Busch InBev’s acquisition of Mexico’s dominant brewer, Grupo Modelo, Thursday. The agency’s antitrust division says the two corporations haven’t done enough to protect consumers.

The deal would put Corona, Bud Light, Stella Artois, and other popular beers under the same corporate umbrella, ending the competition that Justice officials say has resulted in lower prices. The Mexican government approved the merger last November.

In its proposed form, the merger “would result in less competition and higher beer prices for American consumers,” says Bill Baer, Assistant Attorney General, of the Antitrust Division. “If ABI fully owned and controlled Modelo, ABI would be able to increase beer prices to American consumers. This lawsuit seeks to prevent ABI from eliminating Modelo as an important competitive force in the beer industry.”

Citing the Justice Department’s complaint, Bloomberg News reports that Modelo’s and AB InBev’s pricing strategies are diametrically opposed, with Modelo consistently providing pressure for lower prices, in contrast with “ABI’s well-established practice of leading prices upward.”

Reacting to the suit, AB InBev called the U.S. move “inconsistent with the law, the facts and the reality of the market place.” The company promised “to vigorously contest the DOJ’s action in federal court.”

The company also said that the merger, which would give AB InBev the remaining portion of Grupo Modelo that it doesn’t control, will now be delayed until after the first quarter of 2013.

Last October, SAB Miller’s Coors Light supplanted Budweiser as the No. 2 beer in the U.S. But SAB Miller produces less than half the amount of beer that a combined AB InBev-Grupo Modelo would, according to Bloomberg. [Copyright 2013 NPR]

Leave a Reply

5AM to 6AM The Splendid Table

The Splendid Table

Hosted by award-winning Lynne Rossetto Kasper, The Splendid Table is a culinary, culture and lifestyle program that celebrates food and its ability to touch the lives and feed the souls of everyone.

Listen Live Now!

6AM to 7AM Travel with Rick Steves

Travel with Rick Steves

"Travel with Rick Steves" is a fun, hour-long, and practical talk show with guest experts and calls and questions from travelers. This weekly program is a lively conversation between travelers and the experts as we learn to explore our world smartly, smoothly, and thoughtfully.

View the program guide!

7AM to 9AM Weekend Edition

Weekend Edition

From civil wars in Bosnia and El Salvador, to hospital rooms, police stations, and America\'s backyards, National Public Radio's Peabody Award-winning correspondent Scott Simon brings a well-traveled perspective to his role as host of Weekend Edition Saturday.

View the program guide!

Upcoming Events in your area (Submit your event today!)

Streaming audio and podcasts

Stream KOSU on your smartphone

Phone Streaming

SmartPhone listening options on this page are intended for many iPhones, Blackberries, etc. with low-cost software applications available to listen to our full-time web streams, both News on KOSU-1 and Classical on KOSU-2.

Learn more about our complete range of streaming services

We're perfecting the patient experience - Stillwater Medical Center