Ecuador: Craft brewers raise doubts about AB InBev/SABMiller Merger

Ecuador’s Association of Beer makers, an industry group representing around 40 small-scale craft brewers, has raised concerns over the market conditions should an on-going merger between beer giants AB InBev (operating in Ecuador as Ambev) and SAB Miller (Cervecería Nacional). The global merger was recently given the go-ahead by Ecuador’s market regulator, the SCPM.

The merger was authorized pending 11 compromises, among which stand out the requirement to allow a third major player into the market, who may generate competitive pressure through further sales of assets, an obligation to license the Brahma brand, as well as allowing access to the merged entity’s distribution network.

The industry group’s numbers show that the Pilsener (41%), Pilsener Light (35%) and Club (20.5%) brands together represent over 97.5% of the market. Imported beers and other local brewers hold the remaining 2.5%, leaving a mere 0.052% of market share for craft beers. Regarding concerns over a possible monopoly, Daniel Cedeño Intendent for the Merger Control and Research office at the SCPM, commented that the agency will keep watch on the merger, ensuring that “it won’t generate any kind of unilateral practices, that is, any price-fixing or squeezing the supply, which can only happen when abusing monopoly powers.”

Full Content: América Economía

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