What Will A-B & SABMiller Merger Mean for C-stores?

NATIONAL REPORT — The largest worldwide brewer, Belgium-based Anheuser-Busch InBev (A-B), recently announced it will merge with the world’s No. 2 brewer, United Kingdom-based SABMiller plc. The transaction, pending regulatory approvals, is valued at $105 billion, with the combined company boasting annual revenues of $64 billion.

If and when the deal — announced in November and set to close in the second half of this year — is completed, the new combined company will control a number of top beer brands, including Budweiser, Corona, Stella Artois and Foster’s. The deal should also give A-B the opportunity to enter untapped regions of the world, such as Africa, creating what A-B calls the “first truly global beer company.”

Also as part of the transaction, Molson Coors has agreed to purchase from A-B, SABMiller’s 58-percent stake in the MillerCoors joint venture and the global rights to both Miller and Coors legacy brands. In addition, Japan’s Asahi Group Holdings Ltd. announced on Feb. 10 a bid of $2.9 billion for the Peroni, Grolsch and Meantime brands, as well as the Italian, Dutch and British companies of SABMiller that manufacture and distribute these brands.

In the convenience channel, the foremost question right now about the merger is: How will it affect convenience store retailers and wholesalers? Will their business change at all?

On the retailer end, many c-store operators expect to maintain the status quo post-merger.

Brian Sullenger, customer benefits manager for Maverik Inc., told Convenience Store News that he believes the merger will change little at the North Salt Lake City, Utah-based chain of 275-plus c-stores. “From my understanding, this will not affect the U.S. market,” he said.

Tim Cote, vice president of marketing for Plaid Pantry Inc., a 107-store chain based in Beaverton, Ore., holds a similar sentiment. Although he stated the merger should not make a major difference for Plaid Pantry’s beer business, he did acknowledge the beer market could be slightly affected by the aftermath of the merger — namely, the sale of the MillerCoors joint venture to Molson Coors Brewing Co.

“If the Molson Coors purchase of the MillerCoors joint venture goes through as planned, I would assume that it would be business as usual in the short term. In the longer term, I would expect some philosophy changes in go-to-market [strategy] since there would be different leadership. But nothing too radical in nature,” said Cote. 

Also in agreement that business would go on as usual should the merger be approved is Damian Wyatt, beverage category manager for Brentwood, Tenn.-based MAPCO Express Inc., operator of 373 convenience stores in eight states under various banners.

In fact, Wyatt sees the potential for benefits stemming from this transaction.

“From an execution standpoint, I don’t believe we will incur any change in our day-to-day business. The product will still be distributed by our current houses, and we don’t believe our customers will experience any change with the merger,” he said.

“In regards to promotional periods and planning, I believe this merger could prove to be beneficial. The merger has the potential to institute easier execution and implementation, as a one-call point system could prove to be representing a stronger unified and more diverse portfolio,” he explained. “This would make it easier on us as buyers and category managers as this would lessen conflicting competition and competing priorities as well as hidden competitive agendas.”

For more analysis on the proposed merger, including the wholesaler perspective, look in the March issue of Convenience Store News.