Beer Monopoly: Justice Department Sues to Stop Anheuser Busch From Having Beer Monopoly in the U.S.

A lawsuit has just been filed by the Justice Department seeking to block Anheuser-Busch InBev's merger with Group Modelo, a top Mexican beer company.

Atlantic Wire reported that the assistant attorney general who is in charge of the Department of Justice's Antitrust Dvision, Bill Baer, said in a statement that the DOJ will sue. Suing will prevent the $20.1 billion deal to happen that could be detrimental to the U.S. beer market.

The statement said according to The Atlantic Wire:

"If ABI fully owned and controlled Modelo, ABI would be able to increase beer prices to American consumers. This lawsuit seeks to prevent ABI from eliminating Modelo as an important competitive force in the beer industry."

The New York Times reported that the action "is in an industry that previous administrations had allowed waves of consolidation. Anheuser-Busch InBev; the acquisitive SABMiller, which is one of MillerCoors's parents; and Grupo Modelo have 72 percent of the $80 billion American beer market, giving them enormous power over pricing."

The biggest beer makers in the market, Anheuser who brews Budweiser and Stella, has raised prices every year as well as MillerCoors.

"Even small price increases could lead to significant harm," Baer said to The New York Times.

The two sides will continue to try and come to a settlement. Last summer Anheuser bought 50 percent that it didn't already own of Modelo, which was a deal that would give it full control of Corona, which is the top imported beer brand in the U.S.

"In this case, there are pretty significant synergies," said Harry Schuhmacher, the editor of Beer Business Daily to The New York Times. "Anheuser can afford to overpay for Modelo and is eager to."

The lawsuit is the first action that has occurred with Baer in power who took over as President Obama's antitrust lawyer early this year. Baer has previously worked at the Federal Trade Commission and at the law firm Arnold and Porter.

If Anheuser took over Modelo, they would have control nationally and in markets like Texas, California and New York, reports The New York Times.

"Obviously, beer is different from most other goods and services because there are significant public health issues relating to alcohol," said Sandeep Vaheesan, who is special counsel at the American Antitrust Institute, to The New York Times. "But an antitrust analysis looks strictly at promoting competitive prices, product innovation and consumer choice, and this deal thwarts those objectives."