The Department of Justice filed a civil antitrust lawsuit today challenging Anheuser-Busch InBev’s (ABI) proposed acquisition of total ownership and control of Grupo Modelo.
ABI currently has a 43 percent voting interest and a 50.35 percent economic interest in Modelo. Modelo is a Mexican corporation with its principal place of business in Mexico City. In 2011, Modelo had revenues of approximately $7 billion.
The department said that the $20.1 billion transaction would substantially lessen competition in the market for beer in the U.S. as a whole resulting in consumers paying more for beer and having fewer new products from which to choose.
ABI and Modelo–the largest and third largest beer firms, respectively–together control about 46 percent of annual sales in the United States.
Americans spent at least $80 billion on beer last year. According to the department, ABI’s Bud Light is the best selling beer in the United States and Modelo’s Corona Extra is the best-selling import. Because of the size of the beer market in the United States, even a small increase in the price of beer could result in billions of dollars of harm to American consumers, the department said.
The department’s lawsuit, filed in the U.S. District Court for the District of Columbia, seeks to prevent the companies from merging.
The complaint also discusses ABI’s efforts to target Corona. ABI considered Corona to be a significant threat, and launched Bud Light Lime in 2008 to compete with Corona. ABI went as far as to mimic Corona’s distinctive clear bottle. Ultimately, instead of trying to compete head-to-head with its own product, Bud Light Lime, ABI is thwarting competition by buying Modelo.