SABMiller and AB Inbev Merger Casts Global Shadow

• Print
• Email

Call it Newbelco, call it the Beerhemoth, call it the biggest beer company the world has ever known—whatever you call it, the new megabrewer that formed on October 11, 2016, from the merger of AB Inbev and SABMiller will be a dominating source of global alcohol harm. AB Inbev and SABMiller were already the two largest beer producers in the world; together, they will represent annual sales of $55 billion or more. The post-merger transnational company now called Newbelco will be responsible for one in three beers sold worldwide.

As befits a global company, the threats from the merger to public health and governance are global in scale:

• The combined assets will greatly multiply Newbelco’s ability to engage in marketing, lobbying, and industry-slanted research.
• Newbelco intends to use economy of scale to build a strong presence in Africa, introducing low-cost alcohol to low-consumption areas. Without existing infrastructure to address prevention, regulation, and harm reduction, the effects could be catastrophic.
• Though antitrust actions forced Newbelco to divest some brands, those brands have been or will be quickly acquired by other international players in the beer market, such as Molson Coors and Asahi. Newbelco’s loss just empowers other massive alcohol makers to expand their reach and power.
• Both SABMiller and AB Inbev already have a reputation for wielding outsize influence at the national level. Less than a month ago, AB Inbev paid $6 million to settle charges stemming from bribery and whistleblower suppression in India. Meanwhile, critics of SABMiller are concerned they will be ungovernable in parts of South America, where many political figures have direct ties to the company.

Writing in the British Medical Journal, Dr. Jeff Collin and colleagues of the University of Edinburgh note the strategic similarities between Newbelco and the tobacco industries. The survival of transnational tobacco companies like Altria and British American Tobacco hinges on exploiting regulatory gaps in the developing world to generate millions of new customers. (The guidelines for these strategies should already be familiar to Newbelco, since Altria Group will itself own a 10% share of the megabrewer.) Although international development guidelines forbid collaboration with tobacco companies, no such stipulation exists for the alcohol industry. Dr. Collin urges quick action to close that loophole and proactively confront Newbelco and other alcohol companies looking to flood emerging markets.

Whether or not the international health community reigns Newbelco in, the colossus may already have it's next move planned. Industry experts speculate the company may soon attempt to acquire sugared-beverage manufacturer Coca-Cola. After all, in a world where obesity, alcohol, and tobacco are among the most frequent causes of death from non-communicable disease, why shouldn't Newbelco-Altria-Coca-Cola profit from all three?