Wednesday, October 10, 2007

Pint sized companies could get much bigger

SAB Miller and Molson Coors announced today they're combining their American operations and if approved by regulators would give the joint venture about 30 percent of the U.S. beer market. If the government allows the number-two and -three players to merge, they could save an estimated $500 million a year in freight and other costs. This merger would allow Miller/Coors to be a serious competitor to Anheuser-Busch, maker of Budweiser and Michelob, which controls about half the U.S. beer market.

This type of consolidation should come as no surprise to the industry, it has been occurring in most industries for years - Accounting Firms, Pharmaceuticals, Automotive Industry, the phone company, ect. Most industries go through a "weeding" out period where smaller firms come together to compete with the larger ones and the beer industry is no different. Assuming the merger of operations goes through, SAB Miller-Molson Coors could give Anheuser-Busch a run for it's money as the countries largest beer manufacturer.

No comments: