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Tag: Grupo Modelo

  • 7 Die in Brewery Accident in Mexico City

    7 Die in Brewery Accident in Mexico City

    Reuters is reporting that seven people have died in a brewery accident in Mexico City. Beer company Grupo Modelo stated that seven workers were killed in an accident involving a tank that was being cleaned and receiving maintenance. The details of the accident have not been released.

    According to the report, a Grupo Modelo spokesperson stated that, “Modelo is deeply sorry for this accident and will support the affected families permanently.”

    Grupo Modelo is the maker of beer that included Modelo, Pacífico, and Corona. Corona is the best-selling beer from Mexico, and the top imported beer in the U.S. Last summer, Anheuser-Busch InBev (ABI) announced that it would fully acquire Modelo for just over $20 billion. ABI is the maker of the best-selling U.S. beer, Bud Light.

    In January 2013, the U.S. Justice Department filed a civil antitrust lawsuit to block the merger. The Justice Department claims that the U.S. beer market is highly concentrated, with 39% of beer sales in 2012 going to ABI, and another 7% going to Modelo. There is worry that ABI, which is a price leader for the U.S. beer industry, is seeking to eliminate competition from Modelo, which “aggressively” prices its imports.

  • Beer Monopoly Merger Blocked by U.S.

    Beer Monopoly Merger Blocked by U.S.

    The U.S. Justice Department this week filed a civil antitrust lawsuit against Anheuser-Busch Inbev’s (ABI) acquisition of Grupo Modelo. ABI is the maker of the best-selling beer in the U.S., Bud Light. Modelo sells the best-selling import beer in the U.S., Corona Extra.

    ABI has proposed buying Modelo for $20.1 billion dollars. Of the $80 billion Americans spent on beer in 2012, around 39% of that amount went to ABI, while Modelo accounts for around 7% of U.S. beer sales. The companies are the largest and third-largest beer companies in the U.S. The justice department claims that the proposed merger would “substantially lessen competition in the market for beer in the United States” and result in rising beer prices.

    “The department is taking this action to stop a merger between major beer brewers because it would result in less competition and higher beer prices for American consumers,” said Bill Baer, assistant attorney general in charge of the Department of Justice antitrust division. “If ABI fully owned and controlled Modelo, ABI would be able to increase beer prices to American consumers. This lawsuit seeks to prevent ABI from eliminating Modelo as an important competitive force in the beer industry.”

    The Justice Department’s complaint makes the case that the U.S. beer market is already highly concentrated, and that ABI “generally” acts as a price leader. It points out that while other beer companies such as MillerCoors, the second-largest beer seller in the U.S., generally follow ABI’s yearly price increases, Modelo has priced its imports “aggressively,” keeping ABI’s price increases under pressure.