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Northern Ireland companies concerned over $280bn mega beer merger: Breweries SABMiller and AB InBev in potential tie-up

By John Mulgrew

Published 17/09/2015

Matthew Dick, co-founder of the Boundary Brewing firm
Matthew Dick, co-founder of the Boundary Brewing firm

Northern Ireland's drinks industry has reacted with concern to news of a potential $280bn (£181.7bn) tie-up between two of the world's biggest breweries.

A deal between beer makers SABMiller and AB InBev could create a combined business worth as much as $280bn.

But independent breweries here have said the deal - which would make the already massive multi-national firms one of the largest companies in the world - could create a worrying lack of competition in the industry.

A merger of the two firms would bring together the world's biggest beer groups, with AB InBev potentially adding SABMiller's Peroni and Grolsch brands to its own stable of more than 200 beers, including Corona and Stella Artois, Beck's, Leffe and Hoegaarden.

Independent brewer Matthew Dick, who runs Boundary Brewing in east Belfast, said the new deal "would create a monopoly that won't have any benefit to the consumer".

"It gives them the power to set the price," he added. "Things won't get any cheaper, and I would say that a lot of consumers are price-sensitive.

"From a consumer point of view, that kind of monopoly can never be good."

However, David Rodgers, owner of Northbound Brewery in Londonderry, said he did not believe that the deal would have a major impact on the average drinker in Northern Ireland.

"SABMiller has taken an approach to treating its smaller breweries well, and I hope that continues," he added.

But Darren Nugent, of Co Tyrone's Pokertree Brewing Company, raised concerns over the impact a monopoly could have on the industry.

"These companies have massive resources compared to small breweries," he said.

"They have a huge competitive advantage, but I don't know how much this will impact here - the stranglehold couldn't get much stronger. There is an element of anti-competitiveness."

There is also a worry that the merging of two firms could see a reduction in selection and brands at pubs across Northern Ireland, according to Colin Neill of Hospitality Ulster.

"It is the way of the world - the big companies coming together," he said.

"We will have to see what happens with the competition process. Our worry is always about products and the range.

"It's a wait and see situation. But it could be good if it lowers the cost, which can be passed on to the customer."

SABMiller employs around 69,000 people in more than 80 countries and has global annual sales of more than $26bn (£16.9bn).

AB InBev, which is based in Leuven, Belgium, has a 155,000-strong global workforce and makes more than $47.1bn (£30.5bn) in global revenues.

SAB said it had not yet received any proposal from AB InBev, and it did not have any details of the planned approach.

"The board of SABMiller will review and respond as appropriate to any proposal which might be made," it added before admitting it wanted to work towards a friendly bid.

Belfast Telegraph

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