Andrew Zajac Washington


The lawsuit challenging Anheuser-Busch (AB) InBev’s $20.1 billion (R177.8bn) proposed takeover of Grupo Modelo is part of a record-breaking US docket of civil antitrust cases, reflecting President Barack Obama’s administration’s greater willingness to intervene in markets, according to some antitrust scholars.

“It represents an attitude of more scepticism of the efficiency benefits of merging that are often claimed by the parties in the transaction,” John Connor, a professor of industrial economics at Purdue University, said. “There’s been a greater willingness to challenge mergers than there was” under the administration of former president George W Bush.

The Justice Department’s suit to block the AB InBev-Modelo merger is the seventh antitrust case currently in litigation.

“That’s the most ever at one time,” Gina Talamona, a department spokeswoman, said.

Antitrust officials in the Bush administration placed less emphasis on the market impact of mergers and focused instead on the pursuit of criminal price fixing, said Albert Foer, the president of the non-profit American Antitrust Institute.

High profile cases initiated by Bush-era regulators included an investigation of a global conspiracy to fix the price of liquid crystal display panels that resulted in the criminal convictions of eight companies, including Taiwan’s AU Optronics.

“The Republican approach has tended to focus on criminal cartels,” Foer said. “There’s a lot more variety of cases now than one would have seen in the Bush administration.”

“I don’t know if they would have brought a beer case,” said Foer, whose group published a paper sceptical of consumer benefits from the AB InBev-Modelo combination.

The Justice Department argues that the proposed acquisition would likely result in higher prices and less innovation for US beer buyers.

In a statement last Thursday AB InBev called the filing “inconsistent with the law” and said it would contest the lawsuit in court. – Bloomberg