Anheuser Busch buys Goose Island in quest for world domination

Bud

Growing microbrewer Goose Island has been purchased by Anheuser Busch, maker of the Budweiser brand, as larger brewers are buying up more of the craft brew industry. Photo Credit: Jesster79/Wikimedia Commons/CC-BY-SA

Anheuser Busch, the corporate megabrewing conglomerate, recently purchased Goose Island, a beer brewing company based in Chicago. Anheuser and chief rivals SABMiller and Molson Coors have been buying up microbreweries for years. Macrobreweries dominate the market for beer, prompting cynics to claim corporate America is out to spoil everyone’s fun.

Macrobrewing company purchases growing Chicago microbrewery

Anheuser-Busch, the macrobrewing family which includes the Budweiser beer brands, has just announced the purchase of the remaining interest in the Goose Island brewery in Chicago for $38 million, according to USA Today. Anheuser already has a distribution partnership with Fulton Street Brewery, the company which makes Goose Island beers, and the purchase essentially moves the Goose Island line in-house for the brewing giant. Anheuser bought 52 percent of Goose Island’s shares outright, and the remaining 42 percent from Craft Brewers Alliance. Craft Brewers Alliance Inc. is a conglomerate of smaller brew houses formed by the merger of Redhook and Widmer Brothers in 2008 that has since acquired other breweries, according to BizJournals. Anheuser-Busch, which was purchased several years ago by global beverage titan InBev, owns 32.5 percent of Craft Brewers Alliance Inc.

Largest companies dominate distribution

Goose Island, according to 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 companies to sell the beer, wine and spirits they produce to bars, restaurants and stores. Since large beverage companies such as 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 customer demand, as the current distribution system is mandated by law. Microbrewers, according to Reuters, accounted for 5 percent of beer sales in 2009.

Congress tries to help 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, according to Reuters. The bill would also reduce excise taxes on breweries producing six million barrels per year or less. Currently, brewers pay a $7 excise tax per barrel on the first 60,000 barrels, and brewers that produce more than that pay a $18 per barrel excise tax. Brewers that produce six million barrels per year would pay only $16 under the new law, which would benefit craft breweries, but not corporate mega-brewers like Budweiser or Coors. A version for the House of Representatives is supposedly in the works. A bill of this sort would help to lower the price of craft beer, making it easier for those who enjoy craft brewed beer to do so.

Sources

USA Today

Chicago Sun Times

BizJournals

Reuters

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