Tuesday, January 12, 2010

Consolidation Beat goes on, says MarketWatch

Following up on yesterday's post on the Heineken-FEMSA deal, an article from MarketWatch sees more brewery consolidation to come at the top. (I let you down; should have had this for you, because it's all stuff I knew. Sorry.)
Currently, the four top players control about 50% of the global market. And in his remarks, Heineken CEO Francois van Boxmeer said it is likely they will soon gobble up another 25% between them.

It's out there, waiting to be had. FEMSA's Mexican compadre, Grupo Modelo, is already half-owned by ABIB, and there's a good-sized chunk right there.

There are bumps in the road. The remaining breweries are often owned (or partially-owned) by families or foundations, which will present challenges to a quick acquisition...but it's hardly a dealbreaker; A-B was partly family-owned, after all, as is FEMSA (and Heineken, far as that goes).

Will we see 75% of the world's beer market controlled by two to five companies? What effect will that have on beer prices, on brewing commodities? Why isn't this an anti-monopoly issue?

2 comments:

Rich said...

Even if two companies control 100% of the market...two is not a monopoly. I know it is more complicated than that but there is still enough competition that it won't raise any eyebrows.

Lew Bryson said...

Well, duopoly, oligopoly... it does raise eyebrows, and a consolidation like that will come under scrutiny.