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RetailANHEUSER-BUSCH INBEV

Beer Drinkers Are Suing to Stop the AB InBev-SABMiller Merger

By
Jonathan Chew
Jonathan Chew
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By
Jonathan Chew
Jonathan Chew
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December 4, 2015, 9:30 AM ET
AB InBev Agrees to Buy SABMiller for $106 Billion in Record Deal
A bottle of Budweiser beer, brewed by Anheuser-Busch InBev NV, right, and a bottle of Peroni beer, brewed by SABMiller Plc, stand in The Capitol, a JD Wetherspoons Plc public house in this arranged photograph in London, U.K., on Tuesday, Oct. 13, 2015. Anheuser-Busch InBev NV agreed to buy SABMiller Plc for almost 69 billion pounds ($106 billion) to clinch a record industry deal after several rejections, creating a brewer that will account for a third of all beer sales globally. Photographer: Simon Dawson/Bloomberg via Getty ImagesPhotograph by Simon Dawson — Bloomberg via Getty Images

This story has been updated to add comment from Anheuser-Busch InBev.

A group of beer drinkers have reportedly filed a lawsuit attempting to block the merger between the world’s two biggest brewers, saying it will result in higher prices and lower-quality beer.

The drinkers—made up of 19 Oregonians, 3 Californians, and one Washingtonian—contend that the $105 billion deal between Anheuser-Busch InBev (BUD) and SABMiller would create a monopoly in the market and stifle competition, reported The Oregonian.

“Plaintiffs are threatened with loss or damage in the form of higher beer prices and less consumer options. If defendants’ proposed transaction is consummated, plaintiffs will sustain irreparable harm for which damages will be unable to compensate plaintiffs, in that competition once lost cannot easily be restored,” the lawsuit stated, which was filed on Tuesday in a federal court in Oregon, according to Bloomberg.

AB InBev said the lawsuit is without merit. In a statement to Fortune, John Blood, the company’s vice president of legal and corporate affairs, said:

We believe that the claims alleged in this lawsuit are without merit, and we intend to vigorously defend against them. The U.S. beer market has never been more competitive, with strong growth from craft brewers, and nothing in this transaction will change that fact. Instead, this transaction provides a compelling opportunity to extend the reach of AB InBev’s iconic American brands, such as Budweiser, to markets outside of the United States.

The merger, touted by AB InBev and SABMiller as the creation of “the world’s first truly global brewer,” would result in a beverage giant that would be responsible for 30% of the world’s beer sales. In the U.S., that market share would rise to over 70%. Brands under the AB InBev banner include Budweiser, Corona, and Beck’s, while SABMiller own the Fosters, Miller, and Strongbow.

To help fight antitrust concerns, the companies agreed to sell SABMiller’s 58% stake in MillerCoors to its partner in the joint venture, Molson Coors Brewing (TAP), for $12 billion in cash. Molson Coors would occupy the runner-up position in the U.S. beer market, with a 25% share. However, the deal still needs to receive regulatory approval both with the U.S. Justice Department and in numerous countries where both breweries have a significant market share.

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