On November 14, the DOJ allowed InBev N.V./S.A. (“InBev”) to acquire Anheuser-Busch Companies, Inc. (“Anheuser-Busch”) on the condition that InBev divest Labatt USA.
The DOJ was concerned that without the divestiture of Labatt USA, the merger was likely to lessen competition substantially in the market for beer in the metropolitan areas of Buffalo, Rochester, and Syracuse, New York. In each of these metropolitan areas, the transaction would combine two of the three major manufacturers of beer, creating a highly concentrated market. The DOJ claimed that the transaction would also eliminate substantial head-to-head competition between InBev and Anheuser-Busch in these regions. The DOJ alleged that this loss of competition likely would result in higher beer prices to consumers in those areas.
The enforcement action is noteworthy because it demonstrates the DOJ’s willingness to protect a subset of customers despite the fact that Labatt’s market share has been decreasing and its importance in the U.S. beer industry has been diminishing over time. Interestingly, the DOJ focused on very narrow geographic markets to find areas of competitive concern, however, it did not find any competition concerns with the MillerCoors joint venture, which combined two of the three manufacturers of premium light beer in the United States.