By Don McIntosh, associate editor
America has laws against monopolies. Will they be enforced? Belgium-headquartered Anheuser-Busch Inbev last November announced plans to merge with UK-headquartered SABMiller. The merged company—with 60 percent of the American beer market—would be able to use its dominance in production and distribution to curb competition. To get approval for the merger from federal antitrust regulators, SABMiller proposes to sell its stake in the Miller Coors joint venture to its partner, Molson Coors.
But David Laughton, head of the Brewery Workers’ Conference of the Teamsters Union, says Miller Coors didn’t even wait for the merger before anti-competitive practices began: Two days before merger talks were announced, Miller Coors announced plans to close its Eden, North Carolina, mega-brewery in September 2016, eliminating hundreds of union jobs. The closure would eliminate 4 percent of U.S. beer production capacity, and would harm competitor Pabst, which contracts with other companies to make all of its beer brands. Though Eden is the main brewery making Pabst, Miller Coors said it wouldn’t sell the brewery to Pabst, just close it, and then would almost triple the price it charges to brew Pabst beer.
“It’s no secret that the beer industry in the U.S. is not behaving competitively,” said antitrust lawyer Allen Grunes in a May 13 conference call hosted by the Teamsters. “The industry has had a history of price coordination and has had price increases even in the face of volume decline.”
Laughton says the closure is about contracting supply and raising prices, not a result of declining demand or excess capacity: Highly-automated Eden is Miller Coors’ ultra-efficient “crown jewel,” and has operated seven days a week, mostly 24-hours-a day, for the last 10 to 15 years.