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Marketplace Scratch Pad

One world, one beer company?

Scott Jagow Jan 11, 2010

We’ll be talking brews tonight on Marketplace, and there’s nothing wrong with that. Today, Heineken announced plans to buy the Mexican brewery that makes Dos Equis, Tecate and Sol. Are we heading for the day when all the world is drinking the same beer brand?

The mass-produced beer business has been rife with consolidation. The Brazilian company Ambev merged with Belgium’s Interbrew to create Inbev which bought Missouri’s Anheuser-Busch, otherwise known as Budweiser. Canada’s Molson merged with Colorado’s Coors which merged with Milwaukee’s Miller which had merged with a South African brewery. Keeping up so far?

What does all this merging do to the small beer companies? Is it like Wal-Mart — the little guy gets crushed? Actually, it may be the opposite. From Minyanville:

Despite the recession, the upper end of the market, including craft beer and imports, grew about 5.5% in 2008 and now represents about 20% of the US beer market.

“In the long term, we think that the category has further room to grow as we expect consumers to drink less mass-produced beer and switch to higher-priced, better-quality products,” Philip Gorham, an analyst for Morningstar, says in a research report.

Ah-ha. Our reporter Amy Scott says in 2009, microbrews saw another 5.5% pop in growth. And Marketplace senior editor Paddy Hirsch backs this up with anecdotal evidence (I mean, beyond beer tasting). Paddy recently visited Stone Brewing Company near San Diego, and they told him they loved it when the big companies merged. The mergers turn off beer-drinkers, perhaps in principle but also because something bad seems to happen to the flavor of a decent beer when it gets swallowed up by a mega-corporation. People start looking for alternatives.

Like Stone’s Arrogant Bastard, perhaps?

That’s our theory. You buying it?

Apparently, President Obama is not.

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