Anheuser Busch buys Goose Island in pursuit of world domination

Megabrewer Anheuser Busch has just completed purchasing Goose Island, a Chicago based microbrewery. Anheuser has been purchasing stakes in microbreweries for years. The chief rivals of the Budweiser brands, SAB Miller and Molson Coors, have been doing likewise. Macrobrewers take up well over 50 percent of the industry, and craft brews are thought to comprise less than 10 percent of all beer sales in The United States. Cynics contend macrobrewers like Budweiser do not want consumers to have the freedom of choice.

Microbrewery in Chicago not on the market long

About $38 million will be paid by Anheuser-Busch to get the Chicago Goose Island brewery, reports USA Today. Anheuser-Busch is the Budweiser beer macrobrewing family. Now, Goose Island will be an in-house brewery for Anheuser. Previously, Anheuser was already partnering with Fulton Street Brewery, maker of Goose Island beers, in a partnership. Anheuser purchased 52 percent of Goose Island’s shares outright, and the remaining 42 percent from Craft Brewers Alliance. BizJournals states that in 2008, Redhook and Widmer Brothers merged to create Craft Brewers Alliance Inc. as a small brew house conglomerate. About 32.5 percent of craft Brewers Alliance Inc. is owned by Anheuser-Busch which was bought by InBev a few years back.

Changes to distribution based on large companies

Goose Island, in accordance with the Chicago Sun Times, is selling control to Anheuser to expand the company’s ability to distribute its beer to customers in the face of growing demand. This is not uncommon, as it is not often advertised to the public that brewers, distillers and vintners all depend on distribution businesses to sell the beer, wine and spirits they produce to bars, restaurants and stores. Since large beverage corporations for instance Anheuser Busch/InBev, SABMiller and Molson-Coors have controlling interests in the distribution industry, small brewers such as Goose Island often have to sell themselves or partner with companies like Anheuser-Busch InBev and SABMiller in order to keep up with consumer demand, as the current distribution system is mandated by law. Microbrewers, in accordance with Reuters, accounted for 5 percent of beer sales in 2009.

Helping out the small brewers

The United States Senate currently has a bill before it called the Brewer’s Employment and Excise Relief Act, which would cut the excise tax on the first 60,000 barrels of beer produced by breweries in half, in accordance with Reuters. Breweries that make less than six million barrels a year would not have to pay as much of an excise tax. While producing beer, the first 60,000 barrels have a $7 excise tax currently. It jumps to $18 a barrel if more than that is made. Companies that stay under 6 million barrels a year will only have to pay $16 a barrel. This will benefit small businesses however not corporations. A version for the House of Representatives is supposedly in the works. The price of craft beer would go down with this helping out those that want to purchase craft beer.

Citations

USA Today

usatoday.com/money/industries/food/2011-03-28-anheuser-busch-goose-island.htm

Chicago Sun Times

newssun.suntimes.com/business/4552383-420/goose-island-brewery-sold-to-anheuser-busch.html

Biz journals

bizjournals.com/portland/news/2011/03/28/craft-brewers-sells-goose-island-stake.html

Reuters

reuters.com/article/2011/03/19/us-breweries-idUSTRE72I3E620110319?pageNumber=1