DOJ APPROVES JOINT VENTURE BETWEEN SABMILLER PLC AND MOLSON COORS BREWING COMPANY

On June 5, 2008, the Department of Justice (“DOJ”) approved a joint venture between SABMiller plc and Molson Coors Brewing Company which combined their operations in the United States and Puerto Rico. While the transaction combined two of three largest U.S. brewers in the United States, the DOJ’s Antitrust Division did not find any evidence that this joint venture would reduce competition.
The three U.S. brewers vigorously competed with regards to price for a number of years. The three major U.S. brewers, Anheuser Busch, Miller, and Coors dominate various segments of the beer market. Indeed, the three brewers controlled light beer sales with approximately 93% of the light beer sales in the United States. Even more troubling is that the Anheuser Busch, Miller and Coors make up 100% of the sales of premium priced light beer, a pricing category below super premium light beers such as Corona Light, Becks Light, and Amstel Light.

Undoubtedly, the joint venture increases the chances of coordinated interaction between Anheuser-Busch and MillerCoors as they will be the only two significant national brewers of beer, premium beer, premium light beer, popular priced beer, and popular priced light beer in the country. That being said, the Division supported the companies’ contention that this venture lowered costs creating a more effective beer competitor against Anheuser Busch.

Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com