The Department of Justice has announced that it is requiring Anheuser-Busch InBev SA/NV (ABI), its wholly-owned subsidiary Anheuser-Busch Companies LLC (AB Companies), and Craft Brew Alliance Inc. (CBA) to divest CBA’s entire Kona brand business in the state of Hawaii and to license the Kona brand in Hawaii to another entity. This is required in order for the Anheuser-Busch Companies to acquire the remaining shares of Craft Brew Alliance.
The new owner would be PV Brewing Partners, LLC. The DOJ says the proposed settlement will maintain competition in the beer industry in Hawaii benefitting consumers.
According to CraftBrew.com, on June 10, 2020 Craft Brew Alliance decided to sell the Kona Brewing operations to PV Brewing, as a way to address regulatory concerns. PV Brewing is a firm formed by David Peacock and VantEdge Partners, an investment firm based in Kansas City. The purchase would include the new 30,000-square-foot Kona brewery and canning operation, which is scheduled to open this year.
The Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the Eastern District of Missouri to block the $220 million proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit.
According to the department’s complaint, AB Companies’ acquisition of CBA likely would substantially lessen head-to-head competition in Hawaii between ABI brands, such as Stella Artois and Michelob Ultra, and CBA’s Kona brand. If the transaction was allowed to proceed, ABI and CBA would have a combined share of approximately 41 percent in the moderately concentrated Hawaii beer market.
Under the terms of the proposed settlement, ABI and CBA must divest CBA’s entire Kona Hawaii business — Kona Brewery LLC — to PV Brewing Partners or to an alternative purchaser approved by the United States.
ABI is a corporation organized and existing under the laws of Belgium, with its headquarters in Leuven, Belgium. ABI is already a minority shareholder in CBA. ABI proposes to acquire 100 percent ownership of CBA through AB Companies, a Delaware limited liability company that currently holds a minority ownership stake in CBA. ABI owns numerous major beer brands sold in the United States, including in Hawaii. These brands include Bud Light, Budweiser, Busch Light, Natural Light, Michelob Ultra, Stella Artois, and Golden Road.
CBA is a corporation organized and existing under the laws of Washington, with its headquarters in Portland, Oregon. CBA owns several beer brands sold in the United States, including Widmer Brothers, Omission, Redhook, and Kona, a brand that originated in Hawaii and is especially popular in that state.
Click here for the Justice Department release.
