(WASHINGTON) – Without addressing capacity concerns that Teamsters warned will contract supply, increase prices, and harm competition in the U.S. beer market, the U.S. Department of Justice today provided antitrust approval for the megamerger of the world’s two largest brewers, Anheuser Busch InBev (NYSE: ABI) and SABMiller (LON: SAB), along with the related $12 billion divestiture of SAB’s stake in the MillerCoors Joint Venture to partner Molson Coors (NYSE: TAP).
On Sept. 14, 2015, two days before merger talks between ABI and SAB were disclosed to the public, MillerCoors announced plans to shut its modernized and profitable brewery in Eden, N.C.—eliminating 12.5 percent of MillerCoors’ production capacity and 4 percent of total U.S. production capacity. In a meeting with Teamsters a month later, MillerCoors informed the union that management will close the facility, but not sell it as they “do not want it to get in the hands of a competitor.”
“By allowing MillerCoors to mothball a world-class brewery rather than order it divested to a competitor who will keep it operational, the Antitrust Division missed an opportunity to protect the interests of workers, consumers and competition in the United States,” said James P. Hoffa, General President of the International Brotherhood of Teamsters.“Unlike antitrust enforcers around the world who secured meaningful concessions from the merging parties to protect competition and the interests of workers and consumers, DOJ appears to have rolled over for big corporate interests.”
“MillerCoors simply can’t absorb Eden’s total production at its other facilities,” said David Laughton, Director of the Teamsters’ Brewery Conference. “Closing the Eden brewery will introduce significant inefficiencies at the remaining breweries which will force MillerCoors either to reduce the variety of product offerings, jack-up prices, or both.”
“The Department of Justice may be done with its investigation, but I’m proud that N.C. Attorney General Cooper will proceed with the State’s investigation into anticompetitive effects of the brewery closure,” said Vernon Gammon, a former Eden brewery worker and Secretary-Treasurer of Teamsters Local 391 which represents the facility’s workforce. “In addition to destroying more than 500 good paying jobs in North Carolina and devastating our local economy, the brewery closure will no doubt hurt customers.”
In a lawsuit filed against MillerCoors, Pabst Blue Ribbon alleges that around the same time the Eden closure was announced, MillerCoors told Pabst it would no longer have the capacity to brew Pabst products and that their manufacturing contract would end without renewal unless Pabst paid nearly three times as much per barrel of beer. Pabst was the second-highest brand by barrels run at Eden last year behind Miller Lite, at more than 700,000 barrels.
“The effects of the closure are already being felt in North Carolina,” Hoffa said. “Soon they’ll be felt throughout the industry.”
The International Brotherhood of Teamsters represents 1.4 million hardworking men and women in the U.S., Canada and Puerto Rico, including some 15,000 members working throughout the brewery industry. Visit www.teamster.org for more information. Follow us on Twitter @Teamsters and on Facebook at www.facebook.com/teamsters.