Saturday, May 24, 2008

Massive Deal Brewing?

Two of the world's biggest beer companies could be joining forces.

Belgium's InBev is considering making an offer to acquire U.S.-based Anheuser-Busch, The Wall Street Journal says. The price tag could be in the neighborhood of $46 billion.

It's certainly no done deal, not least of all because the Busch family are considered reluctant to sell.

While ordinarily consolidation, which has continued to sweep through the brewing industry of late, can often mean wider availability of certain brands and better prices for consumers, in this case it's hard to figure the ultimate impact of an InBev-Anheuser-Busch deal as far as Budweiser fans are concerned. A-B products are already the most widely distributed in the nation and, thanks to the company's numerous regional breweries and enormous economies of scale, Budweiser et al. are among a frugal drinker's best friends.

Yet on the other side of the equation, an alliance could strengthen the availability of imported InBev brands like Hoegaarden and Leffe.

It is often, after all, the tenacity of distributors that has as much to do with the breadth of a given market's offerings as does consumer demand. By plugging all of its products into the vast -- and aggressive -- Anheuser-Busch distribution network, some of InBev's higher-quality offerings could find new audiences. And that wouldn't be such a bad thing.

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