Sector News

Anheuser-Busch InBev is one step closer to world beer market domination

April 19, 2016
Food & Drink

Anheuser-Busch InBev has pledged not to eliminate any jobs in South Africa following its takeover of SABMiller as part of an agreement designed to expedite the merger. The proposed merger will consolidate the production of one-third of the world’s beer into one major company.

The pact with South Africa’s government was announced after markets closed Thursday. AB InBev also agreed to invest 1 billion rand ($68.8 million) to support small farmers, enterprise development and local manufacturing.

Budweiser’s parent company also says it will work with the government to reduce the harmful use of alcohol throughout the country.

AB InBev CEO Carlos Brito says the agreement recognizes the former South African Breweries’ “important contributions to South Africa’s economy and society.”

But the company still has a long way to go before completing the global $108-billion takeover deal with SABMiller that’s currently underway. South Africa is just one of many countries that has raised antitrust concerns around the merger.

In the U.S., AB InBev is adding to its growing roster of craft brands with the acquisition of Virginia-based brewery Devils Backbone Brewing Co. – which is one of the state’s largest and fastest growing beer makers. The company has won 28 awards at the Great American Beer Festival over the last seven years, reports USA Today.

“I am both very excited but humbled because (Devils Backbone co-founder and CEO) Steve (Crandall) and his team have built an amazing brewery, portfolio of beers and brands,” Felipe Szpigel, President of Anheuser-Busch’s The High End business unit that focuses on craft and unique import beers, told USA Today.

Since acquiring Chicago’s Goose Island in 2011, AB InBev has now purchased eight U.S. craft breweries including Blue Point Brewing, Elysian Brewing and Colorado’s Breckenridge Brewery, marking a growing trend in the industry at large.

Devil’s Backbone says it will maintain a high level of autonomy after the acquisition but plans to use AB InBev’s “strategic knowledge and information and help” to expand operations and distribution. In 2015, they produced about 62,000 barrels of beer. The brewery expected to increase that to more than 90,000 this year.

After the deal with AB InBev is completed, Devils Backbone says it will add a 50,000-square foot expansion of the Outpost Brewery & Tap Room in Lexington, which includes an improved shipping and receiving facility and additional packaging automation. It will also upgrade facilities at the Roseland, Va., brewpub including permanent campsites and RV hookups.

In 2015, craft beer sales rose 16 percent to an estimated $22.3 billion, according to the latest data from the Brewers Association. The craft beer market now accounts for over 20 percent of all U.S. beer sales.

Source: Fox News

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