The Beer Antitrust Case That Worked
Ten years ago, the Justice Department allowed the world’s largest brewer (ABInBev) to buy the world’s second largest brewer (SABMiller), but only after imposing rules designed to protect competition and keep the market open. Those rules expire this month. This is what they did, and why their expiration matters.
The beer choices in a typical bar or grocery store look highly competitive: hundreds of beer labels, a wide range of seltzers, non-alcoholic beers, and canned cocktails. Much of that variety, however, rests on a support structure most drinkers never see—and on one load-bearing pillar that is about to have less reinforcement.
In 2016, Anheuser-Busch InBev (ABI), the largest brewer in the United States, moved to acquire SABMiller, the second largest brewer in the world. The Justice Department could have litigated to completely block the deal. Instead, the DOJ negotiated with ABI and SABMiller, and the settlement did something many antitrust settlements fail to do.
It worked.
Not every consent decree works. Some are written loosely enough to clear a merger without changing much afterward. Many divested businesses fail to maintain the same level of competition. Some divested businesses fail. This one was different. It targeted the specific harm the deal threatened and protected independent brewers and independent beer distributors—the small and midsize businesses that move beer from breweries to bars and stores—so that they remained free to compete and to carry rival brands, preserving the choice consumers ultimately see at the tap and on the shelf. That protection is a large part of why the beer market looks the way it does today.
This month, that consent decree expires. The DOJ deserves credit for what the decree accomplished but must remain vigilant to preserve the benefits consumers now enjoy.
Competitve Impact
As the DOJ examined the beer industry, they looked at the entirety of the three-tier system. They examined dynamics related to large, domestically produced beers. They considered the impact the combination would have on newer, smaller, craft beers. And they examined what the implications of the merger would have on imported beer. They looked at beer sold at retail in both the off-premise (grocery stores, convenience stores, package stores) and the on-premise (restaurants, bars, clubs, taverns). And they examined the impact on distribution where they concluded that independence at distribution is essential to competition in the beer industry.
What the DOJ secured
The concern with the ABI-SABMiller merger was not only that the world’s two large brewers were combining. It was that this combined brewing entity, ABI, would gain still more leverage over the marketplace via harmful practices in beer distribution: the “middle tier” of wholesalers that moves beer from brewers to retailers. In the United States, brewers generally cannot sell directly to retailers; they sell to distributors, who sell to bars and stores. A brewer that controls the middle tier, directly or indirectly, will influence which beers reach customers and which do not.
The settlement was designed to prevent ABI from using the merger to strengthen that control. In addition to requiring the sale of SABMiller’s stake in MillerCoors to Molson Coors, the decree imposed rules on how ABI could treat its distributors, restrained vertical consolidation by ABI, and installed an independent monitor to oversee compliance and report to the DOJ. The decree was set to last ten years; ten years is up July 20, 2026.
The core of the decree is Section V. Its purpose is straightforward: ABI cannot punish its independent distributors for carrying, promoting, or selling other brewers’ beer. Specifically, under the Consent Order ABI was barred from:
Using the merger, or the decree itself, as a reason to rewrite or renegotiate its distribution contracts, or terminate a distributor;
Acquiring any more distributors if more than 10 percent of ABI’s volume would flow through its own distributors;
Conditioning the availability, price, or terms of its beer on how much non-ABI beer a distributor sells, or preventing a distributor from using its “best efforts” to sell a rival’s brand;
Rejecting a distributor’s choice of a general manager (or successor) because that distributor carries competing beer;
Considering a distributor’s ties to a rival brewer when a distribution business changes hands;
Requiring distributors to turn over detailed financial data about their non-ABI sales; and
Retaliating against any distributor that reports a suspected violation to the DOJ or the monitor.
ABI also had to give the DOJ 30 days’ notice before taking almost any interest in a distributor.
In practical terms, the decree meant that an independent distributor could take on a new IPA, imported beer, seltzer, or canned cocktail without fear that the country’s largest brewer would penalize it for doing so.
What the decree made possible
Because distribution stayed open to competitors, the past decade saw a range of new products reach consumers that a more closed system might have kept out.
Hard seltzer is one example. ABI recognized the category early: in 2016 it bought the leading seltzer, Spiked Seltzer, and rebranded it Bon & Viv. In a distribution system it could control, that head start might have been decisive. It wasn’t. Because ABI could not use its distribution leverage to shut innovative rivals out, brands like White Claw and Truly reached shelves without ABI interference, grew to over $1 billion in sales, and took significant share of the category. More than ABI’s own brand.
Likewise the growth of imported beers in this past ten years for brands such as Modelo or Dos Equis or Guiness was facilitated by an independent distribution tier bringing retailers diverse imported beer choices to satiate their customers.
Non-alcoholic beer followed a similar pattern. ABI offers O’Douls and Budweiser Zero, but open distribution allowed an independent company, Athletic Brewing, to become the largest non-alcoholic beer brand in the country in the time period of the Consent Order.
The effect extended beyond products the decree defines as “beer.” Liquor-based canned cocktails, one of the fastest-growing segments of the drinks business, used the same beer-distribution networks to reach national scale. High Noon, Surfside, Carbliss, and the Finnish Long Drink are examples: brands that, in the industry’s phrase, “started on a beer truck.” They reached that truck because the decree kept distribution open. Some of these brands such as BeatBox have been acquired by ABI in recent years.
In each case, the middle tier was able to respond to consumer demand rather than to the priorities of the largest supplier. The through-line is consumer choice: an open middle tier let drinkers, not the dominant brewer, decide which brands succeeded. It is a market characterized by consumer pull, not supplier push.
What changes when the decree expires
There is a reason not to let the decree simply lapse: the conditions that made it necessary remain, and ABI’s recent conduct suggests it has been preparing for the expiration.
While less so than 2016, the beer market is still concentrated under antitrust law. ABI, Molson Coors, and Constellation still dominate, and concentration in the market exceeds the thresholds in the DOJ’s 2023 Merger Guidelines for “highly concentrated” markets with a Herfindahl-Hirschman Index above 1,800. At this point, the Guidelines treat almost any further acquisition in the industry as presumptively unlawful and harmful to competition. After losing some share in 2023 and 2024, ABI has stabilized and may be regaining share. The data suggests concentration at the top of the beer industry is still a concern in order to have a fully competitive market.
On top of that, ABI’s conduct that raised the need for the DOJ Consent Order remains a concern. Concerns of past practices requiring ABI brand exclusivity by direct or indirect means remains an issue confronting the industry. As the expiration date has approached, ABI has moved to reshape its distribution network. According to Beer Business Daily, ABI identified in 2025 roughly 100 to 150 independent distributors as out of compliance and has created uncertainty by buying distribution or bringing in large new distributor partners who have not previously concentrated on beer distribution or were from other regions of the country.
Taken together, these steps point to a possible strategy of consolidating distribution into fewer, larger, and more “aligned” ABI houses. Such a distributor network would be easier for ABI to control and harder for a craft brewer or a new brand to enter that system raising rivals’ costs and limiting consumer choice.
When the decree lapses, several things change at once. The Section V protections, the independent monitor, and the advance-notice requirements all end. All that remains are the general antitrust laws and state franchise laws. State franchise laws matter a great deal here, because a large majority of states independently bar brewers from owning distributors or protect distributors from arbitrary termination; some states have gone further and included language from the DOJ Consent Decree into their own statutes.
But the federal 10 percent cap on ABI-owned distribution will disappear. The removal of this cap may allow ABI to make additional acquisition of independent distributors. These ABI-owned distributors reduce access to market and to scale as most rival beers do not wish to be sold/distributed by ABI. Additionally, the notice ABI had to give the DOJ before acquiring almost any interest in a distributor or brewer will revert to ordinary merger rules, which generally do not apply until a deal is worth roughly $134 million. The decree’s built-in enforcement mechanism allowing DOJ to return directly to the judge who approved it will also end, as will the term of the monitor.
The loss of the monitor is significant. For ten years, industry members have had an independent party whose role was to observe ABI’s conduct, meet with suppliers, distributors and retailers, and take their concerns seriously. The Court appointed Monitoring Trustee has led both oversight over both this Consent Order and a previous ABI-Grupo Modelo Consent Order with many similar issues. When the decree expires, that oversight ends, and so does the decree’s explicit federal prohibition on ABI retaliating against a distributor who raises a complaint. A distributor with a concern would need to bring it to DOJ staff directly, with greater reason to fear retaliation and less formal protection against it. To restrain ABI, the department would likely have to open a new investigation and bring a new case.
The result is that the safeguards end and the burden shifts back to regulators and stakeholders to prove harm after it occurs in an already concentrated market.
Credit where it is due, and a note of caution
The DOJ deserves credit here. Ten years after the merger, the beer market remains concentrated but has gradually become more competitive and innovative, in significant part because of the decree. The department identified the competitive harm, wrote rules to address it, and protected the independent middle tier so that competition could develop. This is a case of antitrust enforcement working as intended, and it is worth acknowledging as such. Similarly, the FTC recently noted in a speech that the goal of the FTC is to enable consumer choice. The protections of the DOJ Consent Order provide helpful examples for both the FTC and DOJ as well as state antitrust authorities interested in supporting consumer choice via independent distribution.
That success now needs to be maintained. The DOJ, the FTC, and the states should monitor ABI closely as the decree winds down and be prepared to act if the company treats expiration as license to resume the conduct the decree prohibited: penalizing distributors for carrying rivals, cutting off new brands’ access to market, or acquiring or partnering with distributors to control what reaches consumers—the consumer choice the decree was built to preserve. The DOJ and FTC should also point to this decree as a model: as evidence that prohibiting vertical foreclosure and protecting independent distribution keeps markets open for new entrants and for consumers.
The once-bright lines between the beer and wine-and-spirits tiers are now blurring. The recent collapse of Republic National Distributing Company, the previously second largest national wine and spirits wholesaler, the entry of ABI into spirits with Cutwater and Nutrl, other alcohol and non-alcohol suppliers entering the beer distribution game, large traditional wine and spirits wholesalers acquisitions of legacy beer distributors, and traditional beer distributors seeking to sell spirits are some of the myriad of issues for the next ten years. Despite these changing issues, the need for the independent beer distribution system to be open to serve all suppliers and retailers remains.
Competition in the beer market had a decade of additional federal antitrust oversight, and it produced results. An independent, resilient distribution network is the mechanism that connects consumer demand to what is actually available for sale, and it is worth protecting.
Cheers to the DOJ for getting this one right. Now keep watching.