The U.S. Justice Department is probing allegations that Anheuser-Busch InBev is seeking to curb competition in the beer market by buying distributors, making it harder for fast-growing craft brewers to get their products on store shelves, according to three people familiar with the matter.
In the past few months, the world’s largest brewer has rattled the craft beer world by striking deals for five distributors in three states. Many states require brewers to use distributors to sell their product, and once AB InBev buys a distributor, craft companies say they find that they can’t distribute their beer as easily, and sales growth stalls.
Antitrust regulators are also reviewing craft brewers’ claims that AB InBev pushes some independent distributors to carry only the company’s products and end their ties with the craft industry, two of the sources said, noting that the investigation was in its early stages. AB InBev’s purchase of several craft beermakers in recent years means that it is in a position to offer a greater variety of products itself.
State regulators in California, where AB InBev announced wholesaler purchases in Oakland and San Jose last month, are also looking into the matter, the people familiar with the matter said.
The beer giant confirmed that it was talking to regulators. “Anheuser-Busch has been in communication with the Department of Justice and California attorney general’s office about the transactions. We are working cooperatively to address any questions they have,” an Anheuser-Busch spokesperson said in an e-mail.
Craft brewers, who produce everything from classics to odd flavors such as pumpkin or raspberry beer, have been a bright spot in an otherwise dull U.S. beer market. While beer sales rose 0.5 percent last year, craft beer sales rose by 17.6 percent to capture 11 percent of the U.S. market.
The Justice Department review comes at an awkward time for AB InBev as it seeks to buy No.2 SABMiller for more than $100 billion in what would be the biggest-ever merger of brewers. AB InBev is widely expected to sell SABMiller’s stake in U.S.-based MillerCoors if the merger goes through, leaving its U.S. market share unchanged at 46.4 percent.
Small craft brewers have already been rattled by AB InBev’s purchases of craft beer makers, including Golden Road in September, Blue Point Brewing last year and Goose Island Beer in 2011.
As AB InBev also snaps up distributors, craft brewers have expressed concern that the company would push distributors to carry only its products.
To retain the craft title, a brewery must make less than 6 million barrels annually. That means those that get taken over by a big brewer such as AB InBev lose that identity even if they still make small batches with distinctive flavors.
It was not clear whether other state regulators were looking at the recent purchases of two distributors in Colorado and one in New York as well.
The Justice Department declined comment. The attorney generals’ offices for California, New York and Colorado did not respond to requests for comment.