© 2024 Maine Public | Registered 501(c)(3) EIN: 22-3171529
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations
Scroll down to see all available streams.

Maine Craft Breweries Concerned Over Beer Giants' Merger

Tom Porter
/
MPBN
Bottles of beer on a conveyor at Shipyard Brewing.

PORTLAND, Maine — Maine craft brewers are bracing themselves for a battle to maintain market share following the recent announcement of a megamerger in the beer world.

Earlier this month, Anheuser-Busch InBev — the world's No. 1 brewing company — agreed to buy the world's No. 2 beer maker SABMiller in a $104 billion deal. If the merger is approved, the company will own 8 of the top 10 US brands.

Analysts say one of the goals of this new behemoth will be take on America's independent craft breweries, which have seen considerable growth in recent years.

It's late afternoon at a downtown Portland pub, and Daniel Kleban sips a glass of IPA. He's co-founder of Maine Beer Co., one of 64 breweries in the state.

Kleban says these are interesting times in the beer world.

"AB InBev, as you know, has recently acquired SABMiller and this certainly is a threat to small brewers," he says. "We're at a competitive disadvantage. We're small guys, they're big guys."

But size isn't everything in the beer world. In fact, the recent craft beer revolution has seen huge consumer appetite for smaller, local breweries — at the expense of beer giants such as SABMiller and AB InBev.

According to the Brewers Association, a national group which advocates for the craft brewing industry, craft beer production over the last four years has more than doubled to 12.2 million barrels, and the number of craft breweries has soared to nearly 4,000.

Credit Tom Porter / MPBN
/
MPBN
Daniel Kleban

"The big brewers, their market has been steadily declining, the craft breweries have been eating into that market share," Kleban says.

Nevertheless, the small players are still dwarfed by their larger competitors: Maine Beer Co., for example, sells about 13,000 barrels a year, whereas AB InBev brews up more than a hundred million.

Maine Beer employs about 25 people; AB InBev has a workforce of more than 150,000. The new, merged company will be even bigger.

Kleban, who also sits on the board of directors at the Brewers Association, says with its size, the brewing giant could dominate the supply chain and squeeze out smaller competitors.

"They can leverage their power when it comes to raw materials, so you know, barley, hops," he says. "Packaging materials: glass cans, boxes, anything that goes into the making of beer. You know the bigger you are the more influence you have over suppliers."

A few blocks away, the bottling machines at Shipyard Brewing are in full flow.

Still an independent craft brewery, Shipyard is Maine's biggest beer producer, making 190,000 barrels annually and employing more than 100 people.

Founder Fred Forsley says the industry has become a lot more competitive in the last two years, and with this megamerger on the horizon, the key for survival is to engage the consumer.

"I think people want to know who's brewing their beers, and Shipyard and a lot of even midsized brewers in America are making themselves connect to the consumer, so they can understand where the ingredients come from, where product's made, who's making it," he says.

Forsley says Shipyard used to be 50 percent owned by the brewing conglomerate SABMiller, but he bought back the stake 10 years ago and returned Shipyard to family ownership. He intends to keep it that way.

Credit Tom Porter / MPBN
/
MPBN
Fred Forsley

"My goal is to never sell the brewery," he says.

"It's a very very tough challenge for them," says Brad Tuttle, who writes for Money Magazine. In a recent feature he describes how "Big Beer" plans to dominate the craft brewing market.

One strategy, he says, is for big players to make their own quasicraft beers, known as "crafty" beers, which are designed to look and taste like craft ales: brands such as Shock Top, Tuttle says, which is an AB InBev product.

Another ploy is to simply acquire smaller craft breweries, but do it as quietly as possible, so the consumer doesn't know they're no longer drinking something that's independently made.

If you look at a bottle of Goose Island beer, for example, there's no indication that the Chicago-based brewer is now owned by AB InBev.

"There's no responsibility by a brand to state who's the corporate parent," Tuttle says. "All that bottle of beer is required to tell you is where it was bottled, and that may or may not give you a clue who the actual owner is."

Tuttle says the AB InBev-SABMiller merger can expect close scrutiny from regulators. Meanwhile, brewers in Maine have expressed their concerns to members of Congress.

"I'm a member of the small brewers' caucus," says 1st District Democratic U.S. Rep. Chellie Pingree. "They have great events."

She says the caucus plans to address the merger when it meets later this week.

"I think what we should be doing is sending a letter to the Justice Department asking them to look into it," Pingree says. "This shouldn't be allowed to happen without a lot of scrutiny."

Credit Tom Porter / MPBN
/
MPBN
Outside Shipyard Brewing.

Independent U.S. Sen. Angus King of Maine also has concerns.

Maine's craft breweries, he says, play an important role in growing the state's economy.

"I'm concerned therefore that the merger of two of the world's largest beer companies could threaten that success by stymieing the growth of small brewers, and crowding out their products in Maine and elsewhere," he says.

King says he has asked the U.S. Department of Justice to take a close look at how the public interest would be affected by the merger.

AB InBev did not respond to a request for comment for this story.