Picture a 30-pack of beer. If those cans represented all the beer sold in America, 21 would come from one of two companies -- either Anheuser Busch InBev or SAB Miller. Together, they command 70 percent of US market share. Now, those companies have agreed to merge.
Given the prominence of both Coors and craft brewing in the state, we wanted to know what this means for Coloradans. SAB Miller owns 48 percent of MillerCoors, which includes Denver-based Molsen Coors. But SAB Miller will likely have to sell their share if the merger takes place.
Tripp Mickle is covering AB InBev's takeover of SAB Miller for the Wall Street Journal, and he went into the details with Ryan Warner.
Mickle on why this acquisition is taking place:
"This deal is really about opportunities in Latin America and Africa that SAB Miller offers AB InBev that AB InBev currently doesn't have. Africa is the continent that, when it comes to beer, everyone believes has the most upside long term. As the middle class grows there, there's anticipation that there'll be more beer consumption and the rest of the world is really seeing beer consumption decline, for various reasons. But Africa is going to do the opposite."
What this might mean for smaller, craft brewers:
"[AB InBev] will have a certain amount of buying power when it comes to grains that craft brewers won't have. Anytime you have a brewing giant with a 28.4 percent share of the global marketplace, they can really use that scale to negotiate down the price on grain and aluminum and other products they're using in the production of beer."
What this means for Denver-based Molson Coors Brewing Company:
"Right now, the [52 percent] of Miller Coors that [Molson Coors] gets profits from -- or operating revenue from -- is a huge benefit to Molson Coors. And so, presumably, you get the other [48 perent] and it only becomes that much more important."
