Mergers and acquisitions seem to be the only thing left to do for big companies in this day and age.  Adding to the bottom line, increasing shareholder equity, manipulating the P/E ratio, reducing competition - is this what big business is all about these days?  Beer companies have been in the spotlight in recent months as a couple proposed mergers have gotten beer drinkers worried for what may lie ahead for the beer industry.

By now we've all seen the news about the recent pending merger of SABMiller and MolsonCoors.  These two (three?) companies will soon become MillerCoors and leap into the top few brewing companies in the world.

But wait!  Now the business wires have been all a buzz about a new buyout offer from Belgian based InBev to swallow up the all American beer icon - Anheuser-Busch (A-B), makers of Budweiser.  The proposed deal would offer up somewhere in the neighborhood of $46 Billion dollars to A-B and offer up $65 per share for all of the A-B stock.  While all this may look good on paper for a company like InBev, is this a good thing for we the American beer drinkers?   Think about it.

With fewer and fewer companies controlling a bigger percentage of all of the beer in the world, what will this do to competition?  While it's true that there are still thousands of smaller micro breweries and brewpubs in the world, you can't deny the fact that these two potential mega-brewers already dominate the vast majority of the shelf space in most liquor stores.  Bigger companies have better clout when it comes to winning contracts with brewery suppliers.  If just a few companies control most of the world hop and malt supplies, what will that do to our local microbreweries?

Already we are seeing smaller breweries struggle to get supplies to make beer due to the worldwide hop and malt shortages. Some hop and malt growers are backing out of their contracts to supply them with the essential ingredients they need to brew beer.  These bigger companies can pull a lot more weight and potentially dominate the supplier market and push out smaller breweries.  We could likely see many of our favorite local beers disappear and several smaller breweries go out of business.  Do we really want to put control of so much beer into the hands of just a few?

Feel sorry for the employees of these proposed larger companies.  Mergers usually mean one thing - consolidations and layoffs.    Layoffs will only hurt local economies.  Both Coors and Anheuser-Busch employ thousands of people here in Colorado.  What would happen down the road should these companies start losing money and start cutting product lines?   Would America possibly lose their Budweiser or Coors due to cost cutting measures?  Do we really want to see control of our biggest American beers handed over to foreign companies?

These are tough times in America these days.  Despite the economy, beer drinkers seem to keep buying their favorite fermented beverages.  Beer is fairly recession proof, but companies are not.  How big does a company have to get before they are too big?  Will smaller breweries like New Belgium, Great Divide and Avery Brewing be the next targets for acquisition?  Where is the end to the corporate thirst for growing?

Hang on and cherish your beers America.  Soon we may have much fewer choices in the beers we drink.  How do you feel about these recent merger talks?  Do you think these are a good thing?

Email Chipper Dave at: nocobx.beer.examiner @ gmail.com