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Beer drinkers lose U.S. appeal over Anheuser-SABMiller merger

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By Reuters
Beer drinkers lose U.S. appeal over Anheuser-SABMiller merger
FILE PHOTO: A woman serves a one litre bottle of AB Inbev's Carling Balck Label beer at a bar in Cape Town, South Africa, May 11, 2018. REUTERS/Mike Hutchings/File Photo   -   Copyright  Mike Hutchings(Reuters)

By Jonathan Stempel

(Reuters) – A federal appeals court on Wednesday rejected an antitrust challenge by 23 beer drinkers to Anheuser-Busch InBev SA’s <ABI.BR> $107 billion purchase in 2016 of SABMiller Plc, which they claimed would thwart competition and raise prices in the U.S. beer market.

The 9th U.S. Circuit Court of Appeals in Portland, Oregon said SABMiller’s agreement with antitrust regulators to divest its U.S. beer business, by selling its stake in the MillerCoors joint venture to Molson Coors Brewing Co <TAP.N>, would prevent increased concentration in the industry.

It also rejected as speculative the argument that the merger violated the federal Clayton Act because it gave Molson Coors an incentive to adopt Anheuser’s distribution practices, to combat its rival’s newly increased size.

That law requires consumers to properly allege that a merger “creates an appreciable danger or a reasonable probability of anticompetitive effects in the relevant market,” Circuit Judge Margaret McKeown wrote for a three-judge panel. “[The] consumers’ allegations do not belly up to this bar.”

Anheuser-Busch InBev’s brands include Budweiser and Bud Light, Beck’s, Corona, Hoegaarden, Stella Artois, the craft beers Goose Island and Blue Point, and many others.

Joseph Alioto, a lawyer for the plaintiffs, said in an interview he would ask the panel or an 11-judge appeals court panel to revisit the case.

“The court overlooked the elephant in the room: that the 72 percent of the market that was occupied by ABI, SAB and Molson is now occupied by two,” Alioto said. “Is the elimination of the second-largest brewer in the world from the U.S. market a lessening of competition? I don’t think there is any doubt.”

A spokeswoman for Anheuser declined to comment.

Wednesday’s decision upheld an October 2016 ruling by U.S. District Judge Ann Aiken in Eugene, Oregon.

The case is DeHoog v Anheuser-Busch InBev SA/NV et al, 9th U.S. Circuit Court of Appeals, No. 16-35912.

(Reporting by Jonathan Stempel in New York)