Beer Companies Await Antitrust Decision in Mexico
SABMiller, a South African beer company, and many other small Mexican beer companies are eagerly awaiting Mexico’s antitrust regulator to make a decision.
The coming ruling on the lawsuit will show whether the Anheuser-Busch InBev and Heineken International’s Mexican duopoly of Mexican beer can keep exclusivity agreements with corner stores and restaurants. If the regulator finds that they cannot keep such agreements, smaller competitors could establish a larger presence in the Mexican beer industry.
SABMiller, the second-largest beer company, currently has only one percent of Mexico’s beer market, which it dedicates to small brands and craft brewers. Since Mexico is the fifth highest consumer of beer in the world, the company finds it imbalanced that the Mexican beer market is governed by a duopoly. For this reason, smaller brewers filed the lawsuit. The beer renaissance that is taking place in America could trickle down to Mexico if this lawsuit goes in favor of SABMiller, who would be able to distribute and advertise its small, craft breweries more successfully.
The Week reports that six global giants dominate the world’s beer market. In June, Anheuser-Busch InBev, the largest of the giants, took over the Mexican brewery Grupo Modelo (which owns Corona, Modelo, and Pacifico). It now owns an estimated 55 percent of the Mexican beer market. Meanwhile, Heineken, the third-largest giant, owns Mexican brewery Cerveceria Cuauhtémoc Moctezuma (Dos Equis and Tecate) and accounts for about 43 percent of the country’s beer volume. These two giants have an iron grip on the Mexican beer market with a combined 98 percent ownership of the country’s beer volume.
The Mexican antitrust regulator is supposed to make a decision by the end of this week.