Pondering the implications of an InBev-Anheuser-Busch merger

Should the merger ever materialise it would cement relations between Anheuser-Busch and InBev, particularly in Canada and the United States. According to reports in the local media, the deal would likely hasten a growing trend in Canada’s beer business: more emphasis on foreign brands at the expense of Canadian and Blue, which are in decline.

It will be remembered that a key rationale for the 2005 merger that created Molson Coors Brewing Co. was to push Coors Light in Canada. It had an 8 percent to 9 percent market share under a prior joint-venture between Molson Inc. and Adolph Coors Co. Post-merger its share rose to over 10 percent in Canada at the expense of other Molson brands. Budweiser is already the top-selling beer in Canada, with an 11.7 percent share in 2005 according to Euromonitor. If InBev and Anheuser-Busch were to merge, they could unleash the power of Budweiser in Canada.

You need not be a clairvoyant to predict that the brands you’ll see a lot more of in the next few years in Canada are Heineken, Stella Artois, Bud, Bud Light and Coors Light. Canadian and Blue had 8.9 percent and 7.6 percent market shares, respectively, in 2005.

"It’s almost as though what were once the mainstream brands are about to become regional brands to Canada. I don’t think you’ll see as much emphasis on advertising spending as you will on the U.S. brands, which will receive global support,” Ken Wong, a professor of marketing and strategy at the Queen’s University School of Business in Kingston, Ontario, was quoted as saying.