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​What’s brewing in the beer market?

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​What’s brewing in the beer market?

DrinkUp.London’s London Beer Week came to a recent close, delivering a mix of pop ups, tasting sessions and boozy discounts across the capital. Yet although the festival is a great way to discover new alternative microbrews or quirky combinations, the beer business landscape is drastically changing. In November last year, Anheuser-Busch InBev, a huge player in the beer market had its takeover offer accepted by rivals SABMiller. The deal, worth around £70bn, has had lots of ups and downs with many regulatory hoops to jump through before it can be finalised.

So who actually owns what? The boozy background

AB InBev and SAB Miller are huge companies, and if you love a beer after work you would have most likely come across their various well known products without actually realising. Stella Artois, Budweiser and Corona are flagship beers for AB InBev, who have an extraordinary amount of brands under their ownership. SAB Miller, as the name suggests, produce popular American beer Miller Draft which sits on a long list of beers including Castle Lager, Peroni and Grolsch. Together, both companies account for a large percentage of the beer market across the globe and have large lists of beers under their control. Consequently, the deal has attracted attention on a global scale from regulatory bodies seeking to maintain fair competition within the beer market.

Beers not a competition but I’m winning…

Competition within any given market can encourage innovation within the sector but also helps to ensure good value for consumers. If a particular company dominated its field, consumers may be hit with astronomical prices and lack of choice. Within the UK there are various regulatory hurdles that can get in the way of business expansion. Businesses must ensure they comply with the Competition Act 1998 and the Enterprise Act 2002, as well as adhering to various EU guidelines. The Competition and Markets Authority aim to make the market work well for consumers and businesses by reviewing potentially anti-competitive agreements, assessing abuse of dominant market position and overseeing merger regulation.

An Asahi, Peroni and a Grolsch please

Considering that the takeover of SABMiller will leave AB InBev with a lion share of the beer market, they must take steps to avoid creating an unfair monopoly and even then the merger is expected to face significant global regulatory scrutiny. Japanese brewers Asahi Group have sensed an opportunity to expand their reach by making offers to buy flagship brands in Europe, including Peroni and Grolsch, from SAB Miller for a staggering $2.9billion. China Resources beer has also secured a deal to acquire a portion of SAB Miller’s portfolio, buying a 49% stake in the
joint venture China Resources Snow Breweries. The deal is indicative of the attempts of AB InBev’s aim of satisfying regulators by shedding assets and highlights how competition law is enough to give you a hangover.

Expanding a business can seem like a never ending series of hoops to jump through but ourcorporate team can guide you every step of the way. Unlike a traditional law firm, we don't charge by the hour and we won't charge for each phone call or email. Instead, all of our fees are fixed and agreed with you upfront. Why not contact us today to book your free consultation to discuss your legal requirements in further detail, we’ll be delighted to talk to you!

By Louis Muncey

The contents of this article are intended solely for information purposes only and should not be construed as legal advice or financial advice or opinion in any specific facts or circumstances.

©2015 Hybrid Legal Limited.