Is Anheuser-Busch InBev a Monopoly?

Blue CansWhether you’ve been known to have a beer or two now and then or if you drink them often, chances are you’ve enjoyed more than your fair share of an Anheuser-Busch InBev product. Even if you’re not a drinker or don’t like beer, you’ve probably seen an ad for one of their beverages within the last hour. But how is that even possible? That’s what happens when you produce dozens of the world’s most popular beers.

As a case in point, most beer drinkers are familiar with the fact that Anheuser-Busch was the American company behind Budweiser and Bud Light. By merging with InBev, however, the company added beers like Stella Artois and Becks to its production line, which are also kind of a big deal throughout the globe. Throw in dozens of other local and multinational beers, and you’ve got one massive beer brewer.

So does this mean that Anheuser-Busch InBev is a monopoly? Does the brewing giant dominate and control the world’s beer market? It probably depends on who you ask.

What is Anheuser-Busch’s background?

Of course, Anheuser-Busch InBev didn’t become a global brewing titan overnight, as both companies that merged to form the beer giant have long and complex histories.

Anheuser-Busch, which is of one of America’s iconic success stories, was founded way back in 1879. Yes, people drank beer before there were television ads to tell them to. The famous brewery was formed when Adolphus Busch, who was the first brewer to pasteurize beer in the U.S., partnered with his father-in-law, Eberhard Anheuser.

Busch, alongside his pal Carl Conrad, came up with the recipe for an American-style lager they called “Budweiser,” in keeping with Busch’s German heritage and familiarity with European beers. By 1901, Anheuser-Busch had already sold over 1,000,000 barrels of beer. They must have been doing something right!

Over the decades, Anheuser-Busch continued to grow to become the top-selling brewery in the U.S. The introduction of Bud Light in the early 1980s, which is another beer you may heard of, certainly didn’t hurt.

What about InBev?

While InBev as a company has only been around since 2004, it came into being through the merger of two other renowned breweries: Belgium’s Interbrew and Brazil’s AmBev. Confused yet?

Interbrew’s lineage, in terms of the beers the company produced, can be traced back centuries. But in more recent decades it became famous for Belgian brews like Stella Artois and Hoegaarden. As the brewery grew in size, it bought up other foreign companies like the Canadian-based Labatt and China’s Fujian Sedrin. Some of the well-known brands it picked up along the way include Boddingtons, Bass, and Becks. Not a bad roster of beers.

AmBev, on the other hand, was born out of a merger between two Brazilian-based brewers in 1999; Brahma and Antarctica. Brahma was not only one of Brazil’s biggest breweries, but one of the largest throughout South America. Antarctica was one of Brahma’s top competitors. By merging Interbew and AmBev, one gigantic brewery was formed, with a massive market share throughout South America, the Caribbean, and other regions.

How did they merge?

Often in big business, two huge companies will merge to become an even more massive company that will crush the competition and make its investors bucket loads of cash. That’s in theory, of course.

In 2008, InBev, which remember was already a ridiculously huge brewery at the time, offered Anheuser-Busch $52 billion dollars in a takeover bid. That’s not chump change. The deal was eventually approved, to create the planet’s biggest brewery.

In addition to making global brands like Stella Artois and Budweiser, the merger means that Anheuser-Busch InBev produces over 200 beers that are either sold internationally or in regional markets. Some of the other beers you may have heard of, or that your “hip” friends drink, include Kokanee, Lowenbrau, Skol, and Alexander Keiths, among others.

According to the company’s official website, the brewery employs approximately 118,000 people in 23 countries worldwide. In 2012, the company’s revenue was nearly $40 billion. Not million―billion.

If that wasn’t enough, in 2013 an American court approved Anheuser-Busch InBev’s acquisition of Grupo Modelo. In order for the deal to go through, the company was ordered by the Department of Justice to sell off Modelo’s U.S.-based businesses.

What beers does the Mexican brewery make? Just ones like Corona and Pacifico, which if you’ve ever been on a beach, or for that matter in the sun, you’ve probably drunk.

So is it a monopoly?

When you read over how many beers Anheuser-Busch InBev sells, as well as how much revenue the brewery takes in, one can see why the word “monopoly” gets tossed around. While there’s no doubt the company pulls some serious weight in the brewing world, a monopoly is when a market is so dominated by one company that consumers have no other options. For example, if you want tap water, there’s probably only one number you can call.

While Anheuser-Busch InBev controls a large portion of the world’s beer market, and in some nations like the U.S., around half of it, consumers do have options. Just go ask that little craft brewery that’s not far from where you live.