News

An antitrust attorney has filed a private lawsuit on behalf of nine consumers, including six from St. Louis, against Anheuser-Busch InBev (ABI) and Grupo Modelo over their proposed $20.1 billion merger.

The St. Louis Business Journal reports Joseph Alioto filed the suit in federal court in San Francisco, stating the acquisition will substantially lessen competition and/or tend to create a monopoly in the production, distribution and sale of beer in the United States.

Alioto is the attorney who tried to block Belgian brewer InBev’s 2008 acquisition of Anheuser-Busch.

“By combining the largest and the third-largest brewers of beer sold in the United States, the defendant ABI, would have more than 54 percent of the beer market in the United States and sufficient monopoly power to exclude competition and raise prices,” according to the lawsuit.

Brew Hub has announced plans for the company’s first brewery in Lakeland, Fla. The Florida brewery will be the first of at least five planned facilities that will offer craft brewers the opportunity to “partner brew” their beers on site.

Partner brewing is designed to allow craft breweries to brew their beer to exact specifications under the supervision of their own brewmaster and to package and distribute from the Brew Hub brewery, additionally making beer available for export to international markets. This allows craft breweries to expand their distribution without the overhead costs of building a new brewery or transporting beer across the country.

The Brew Hub will also offer craft breweries services including sales, marketing, logistics, legal, and government affairs.

The Lakeland brewery will be located in Interstate Commerce Park off the I-4 Corridor and will have an initial brewing capacity of 75,000 barrels, or one million cases, annually. The site’s central location will allow the company to efficiently distribute beer to wholesalers throughout Florida and the Southeast.

Brew Hub brewing operations will be led by chief brewmaster Paul Farnsworth, who will oversee all aspects of design, layout, construction and day-to-day operation of the new brewing, production and warehouse facility in Lakeland. Farnsworth earned a bachelor’s degree and Ph.D. from the University of London and has been instrumental in the startup or operation of over 100 breweries in 10 countries.

Brew Hub was founded by a team of former Anheuser-Busch executives led by Tim Schoen. Schoen, CEO, Jerry Mullane, President and Mark Greenspahn, Vice President of Operations. Brew Hub is supported by financing from The Yucaipa Companies of Los Angeles.

“Brew Hub will allow great craft brewers to grow their businesses by expanding into new markets they otherwise could not reach,” said Tim Schoen, chief executive officer of Brew Hub. “This is the most exciting time in history to be in the beer business. Beer drinkers are constantly looking to discover new beer styles and brands every chance they get, but many of the beers they love aren’t available where they live. We’re planning to change that in the Southeast and across the country.”

Brew Hub plans to open at least four similar facilities over the next five years. Specific markets will be determined based on demand, but the company is considering strategic locations in the Northeast, Mid-Atlantic, Midwest, Texas and West Coast.

“There are so many craft brewers making amazing beer today, and the demand from consumers is almost insatiable,” said Schoen. “But too much demand can also be a problem. Building a brewery is not realistic for many brewers and contract brewing opportunities that exist today are less than ideal. We believe our partner brewing model will allow craft brewers a great opportunity to expand their business and reach new consumers.”

The company will begin building the Lakeland brewery, packaging and cold storage warehouse in April. The site will operate as a central distribution facility for craft brewers beginning in fall 2013. The Lakeland facility will deliver beer to wholesalers throughout Florida and the Southeast and will begin brewing beer in summer 2014.

Brew Hub was founded in 2012 in St. Louis, Missouri by a team of beer industry executives and craft brewing experts led by Tim Schoen. “Where Craft Brewers Go to Grow,” Brew Hub provides full brewing, packaging, distribution and selling services for craft brands that are capacity, geographical, or capital constrained. The company plans to have five breweries located throughout the country that will cater to craft breweries. Each facility will allow craft brewers to partner brew their beers on site.

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Craft beers sales climbed 15% by volume in 2012, while dollar growth increased 17%, according to figures released by the Brewers Association. The increase amounts to almost 1.8 million more barrels (each of them 31 gallons) of craft beer.

With production at 13,235,917 barrels in 2012, craft brewers reached 6.5% volume of the total U.S. beer market, up from 5.7% the previous year. Additionally, craft dollar share of the total U.S. beer market reached 10.2% in 2012, as retail dollar value from craft brewers was estimated at $10.2 billion, up from $8.7 billion in 2011.

“Beer is a $99 billion industry to which craft brewers are making a significant contribution, with retail sales share hitting double digits for the first time in 2012,” BA director Paul Gatza said.

The number of operating breweries increased 18% in 2012, reaching 2,403. The count includes 409 new brewery openings and 43 closings.

“On average, we are seeing slightly more than one craft brewery per day opening somewhere in the U.S., and we anticipate even more in the coming year. There is clearly a thirst in the marketplace for craft brewed beer, as indicated by the continued growth year after year,” Gatza said. “These small breweries are doing great things for their local communities, the greater community of craft brewers, our food arts culture and the overall economy.”

The BA numbers are preliminary. A more extensive analysis will be released during the Craft Brewers Conference in Washington, D.C. from March 26-29.

The American craft beer industry set a new record for exports in 2012. Based on results from a recently completed industry survey, the Brewers Association reports craft beer export volume increased by 72% compared to 2011, with a value estimated at $49.1 million.

Canada remained the industry’s largest export market, with shipments increasing 140% by volume. Significant gains have been made in Ontario and British Columbia, and American craft beers are now gaining distribution in other provinces.

Sweden and the United Kingdom remained the next two largest markets. Though total exports decreased in both countries compared to 2011, the decline was offset by increased shipments to other European markets. In total, Western Europe accounted for 56,204 barrels valued at $14.6 million in 2012, a 5.6 percent increase over 2011.

“The BA is very pleased with the continued growth in exports of American craft beer to markets around the world. Consumers continue to view American craft brewers as leaders in innovation and among the standard bearers for quality. Maintaining that perception is a priority for the craft brewing community,” said Bob Pease, Brewers Association chief operating officer.

The BA supports exports through its Export Development Program which was initiated in 2004 with funds from the United States Department of Agriculture Market Access Program (USDA MAP). The Export Development Program generates exposure for American craft beer through trade shows, festivals, seminars, media outreach and competitions, among other activities.

The San Francisco Giants and Anchor Brewing have announced that Anchor will build a second facility on the San Francisco waterfront.

Anchor Brewing will occupy what is now Pier 48 with production and distribution facilities (artist rendering), a restaurant, museum and other public attractions. The 212,000-square-foot space in the Giants’ Mission Rock development will not replace Anchor’s existing plant on Potrero Hill, but add capacity. The company’s capacity would nearly quadruple from 180,000 to 680,000 barrels a year.

“This is big news for us. We can now further expand our domestic market (Anchor is sold in every state) and open up new international markets,” CEO Keith Greggor told the San Francisco Chronicle. “It’s also a huge commitment to San Francisco.”

The planned development still must get approval from a variety of agencies. If everything proceeds on schedule, construction could begin in late 2014 and brewing in 2016.

The U.S. sued to block Anheuser-Busch InBev’s proposed $20.1 billion purchase of the half of Grupo Modelo brands it doesn’t already own, stating that the deal would violate antitrust law.

Shares of both companies plunged after the Justice Department filed a complaint in federal court in Washington. The DOJ said the proposed purchased would eliminate the “substantial head-to-head competition” that currently exists between AB InBev and Modelo.

Modelo owns the Corona brand, and Budweiser and Corona are among the most dominant beer brands in the country. Bud Light is the best-selling U.S. beer, while Corona Extra is the No. 1 selling import.

“If ABI fully owned and controlled Modelo, ABI would be able to increase beer prices to American consumers,” Bill Baer, the head of department’s antitrust division, said in a statement. “This lawsuit seeks to prevent ABI from eliminating Modelo as an important competitive force in the beer industry.”

The Justice Department’s action is “inconsistent with the law, the facts and the reality of the marketplace,” according to an ABI statement. “We remain confident in our position, and we intend to vigorously contest the DOJ’s action in federal court.”

Alaskan Brewing has become the first brewery in the world to use its spent grain as the fuel source to power the steam boiler it uses in making beer, and reduced the company’s fuel oil consumption in brewhouse operations by 60 to 70 percent.

“We have the unique honor of brewing craft beer in this stunning and remote place,” Alaskan Brewing co-founder Geoff Larson said for a press release. “But in order to grow as a small business here in Alaska and continue having a positive effect on our community, we have to take special efforts to look beyond the traditional to more innovative ways of brewing. Reducing our energy use makes good business sense, and good sense for this beautiful place where we live and play.”

The brewery began the spent grain energy process in 1995 with the installation of a grain dryer. The equipment dried the wet, protein-rich spent grain in preparation for shipment to the lower 48 for use as cattle feed, due to the absence of farms or ranches in Southeast Alaska. Alaskan designed the grain dryer to use up to 50 percent of the grain as a supplemental fuel source to heat the dryer itself. This reduced the oil required in the drying process, and provided experience in burning spent grain that would later prove useful in designing the steam boiler.

In 2008, Alaskan became the first craft brewery in the nation to install an energy saving piece of brewing equipment called a mash filter press. The mash filter press, in addition to providing greater energy, water, and materials efficiencies, produces a lower-moisture-content spent grain than does the more traditional lautering process. This form of spent grain better lends itself to drying and for use as fuel for the brewery’s grain dryer and, ultimately, the new spent grain steam boiler system.

Over the latter months of 2012, Alaskan completed the final stage of the process with the installation and commissioning of the $1.8 million, custom-constructed spent grain steam boiler.

Alaskan expects that the new boiler will eliminate the brewery’s use of fuel oil in the grain drying process and displace more than half of the fuel needed to create process steam in the brewhouse. This translates to an estimated reduction in fuel oil use in brewhouse operations by more than half. With moderate growth assumptions, Alaskan expects to save nearly 1.5 million gallons of oil over the next ten years.

The U.K. Supreme Court has ruled against Anheuser-Busch InBev’s request to stop Czech brewery Budvar from selling beer under the Budweiser name. Both brewing companies will continue to use the name in the UK.

While Anheuser-Busch was first to seek to trademark the Budweiser name in Britain, the Czech company entered the British market one year ahead of the then-St. Louis-based brewer, according to Reuters.

Tuesday’s ruling comes more than two years after a European Union ruling that quashed AB-InBev’s attempt to register the Budweiser name as its trademark.

According to Budvar, there there are about 40 related trademark dispute cases pending in different jurisdictions and some 70 procedural issues up for consideration around the world.

AB InBev said it was disappointed by the UK Supreme Court ruling but that it did not affect its Budweiser trademark in the country. It said Budweiser sales in the UK rose 40% between 2009 and 2011.

“This attempt to change the final decision of the court proves the long-term strong interest by (AB InBev) to gain exclusive rights for the Budweiser brand at any cost,” Budvar chief executive Jiri Bocek said in a statement.