Beer Drinkers File Lawsuit to Block Anheuser-Busch InBev, SABMiller Merger:

On December 1st, a group of beer drinkers from the West Coast filed a federal lawsuit against Anheuser-Busch InBev and SABMiller to block their upcoming planned merger deal. The lawsuit alleges that the $107 billion merger will result in a “global beer behemoth” worth approximately $275 billion and owning roughly 71% of the U.S. beer market, which is the world’s largest. So what would this deal mean for consumers? According to the lawsuit, it would result in increased prices and decreased beer qualities.

The defendants are no strangers to mergers. In 2004, the world’s third largest brewery (Interbrew) and the world’s fifth largest brewery (Ambev) merged in an $11.5 billion deal, creating the world's largest brewer, InBev. In 2008, Anheuser-Busch (which had been growing through mergers of its own) merged with InBev in a deal worth an estimated $52 billion.

Meanwhile, Miller Brewing Company was quickly growing as well. In 2005, Molson and Coors had just recently become the world’s seventh largest brewery by merging together. In 2007, Miller announced a joint venture with Molson Coors, whereby the two companies would jointly market their products in the U.S. to compete with Anheuser-Busch. In 2011, SABMiller purchased Fosters Group in a $10 billion deal.

In addition to merging with other big beer companies, AB InBev has also been acquiring smaller craft breweries for years. Since 2011, the company has purchased Goose Island Brewing in Chicago; Blue Point Brewing in Patchogue, N.Y.; 10 Barrel Brewing in Bend, Ore.; and Elysian in Seattle.

In response to the lawsuit, AB InBev denied the allegations and claimed that the action is without merit. In a statement to Fortune, AB InBev Vice President of Legal and Corporate Affairs John Blood stated: “We believe that the claims alleged in this lawsuit are without merit, and we intend to vigorously defend against them. The U.S. beer market has never been more competitive, with strong growth from craft brewers, and nothing in this transaction will change that fact. Instead, this transaction provides a compelling opportunity to extend the reach of AB InBev’s iconic American brands, such as Budweiser, to markets outside of the United States.”

The plaintiffs aren’t the only ones skeptical of the merger deal. In fact, congressional lawmakers will hold a hearing December 8th on whether the proposed merger would stifle competition.

You can read the full complaint here:

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