The Strategist

InBev To Get Rid of Grolsch

11/30/2015 - 14:17

AB InBev brewing company intends to get rid of its two well-known beer brands - Dutch Grolsch and Italian Peroni. By doing this, AB InBev is going to seek the European regulators’ approval over the merger with the competitor - British brewing company SABMiller (Grolsch and Peroni’s owner). Applicants for these brands are considered Dutch Heineken and Canadian-American Molson Coors.

Last weekend it became known that Belgian-American-Brazilian brewing giant AB InBev plans to get rid of two owned by SABMiller European brands - Grolsch and Peroni. The company needs the deal to obtain the regulator’s consent on the merger with British SABMiller. Recall that in the past month, Anheuser-Busch InBev and SABMiller have reached a framework agreement on key issues of the merger transaction. Anheuser-Busch InBev raised the offer price for the fifth time, having reached $ 104 billion. Yet, even then experts said that the companies will have to part with some of their brands to get approval of antitrust regulators from the EU, the US and other countries. Soon, it became known that SABMiller is going to sell its stake in 58% of Molson Coors.

Now, in order to get the regulators’ permit, AB InBev intends to get rid of two more brands belonging to SABMiller. Dutch Grolsch is the 21st-largest brewing company, its products are present in 70 countries, the main focus is on the markets of the USA, Canada, UK, Australia, New Zealand, Russia and France. Italian Peroni known worldwide for its beer Nastro Azzurro, which is included in one of the twenty most popular brands in the UK.

British Warwick Business School Professor, John Colley said: "Most likely, the main contenders for Grolsch and Peroni will be Dutch Heineken and North American Molson Coors. As a result, we may see further concentration of brands in the hands of one. This narrows choices of consumers and leads to higher prices."

The expert believes that such a situation, when multinational brewing companies are collecting increasingly more well-known brands, will have consequences. Most likely, it will be growing popularity of the new independent breweries, producing the so-called craft beer: "Now it is particularly popular in the UK and the US. Although these producers often lack the economic and marketing power, they turn to individuals and offer a wide choice of flavors. "